CBA CEO Matt Comyn sounds alarm on soaring home loans and interest rates, urges government to rein in big tech

Commonwealth Bank of Australia chief executive Matt Comyn has warned Australians are taking on too much mortgage debt and should prepare themselves for no interest rate cuts over the next 12 months.

The banking chief also urged politicians to protect Australian sovereignty and push back against US technology giants competing in banking, media and internet services.

Mr Comyn told a parliamentary committee his bank’s home loan credit growth was around 6 per cent or more for investors over the most recent quarter, reflecting record prices in October.

“Obviously we benefit as an institution where housing credit is higher, but for long-term financial stability, for equality and access to the housing market... I think that’s probably pushing a higher level than regulators might be ultimately comfortable with,” he told the House of Representatives economics committee. “A more sustainable growth in housing credit would be below the current level.”

He said he did not expect interest rates to fall much further from their current level of 3.6 per cent, which could slow mortgage borrowing.

“It will be interesting to see whether there’s some moderation to the demand side of housing given there is, I think with good reason, much less confidence that (interest) rates will be reducing anytime soon,” he said.

Later in response to a question from MP Henry Pike, the member for Bowman, over the direction of rates, Mr Comyn said that interest rate forecasting is a difficult game. “But to answer your question directly. No, I don’t think a cash rate reduction in 2026 is likely,” he said.

The bank boss also talked around questions from MP Jerome Laxale, suggesting that young people who took mortgages using just a 5 per cent deposit would be, perhaps unfairly, subject to higher total interest payments over the life of a loan and more vulnerable to default.

“It’s true that the more you borrow, the more you’ll pay back,” said Mr Comyn. “But the reality is when you look at loss rates over multiple decades, it’s heavily causal to change in employment circumstances. Then secondarily it tends to be related to personal illness, and then thirdly relationship breakdowns can cause financial difficulty.”

Payments reform, pushing back against big tech

Mr Comyn also used the parliamentary session to again argue that lawmakers should challenge the rise of mega-cap US tech businesses that often pay little to zero tax on their revenues earned in Australia.

“It’s certainly not just limited to payments,” he said. “We see this in many industries, like the media and telcos. Netflix for example, I’m a subscriber, I can’t remember their total (Australian) revenue, I think it’s more than $10 billion but I don’t think they pay $1 of tax.

“As a point of principle in terms of the sovereignty of Australia, I have a clear view that the legal and regulatory playing field should be level, so that everyone participates and operates here by the same laws and makes certainly a proportionate and fair contribution.”

Currently, the Reserve Bank is looking at plans to ban the surcharging of consumers when they use cards to pay for goods and services in industries such as hospitality at the point of sale.

The proposed changes have left banks like CBA and their payments rivals Apple Pay, Visa, and Mastercard fighting in terms of who should wear any costs associated with lost fees from a fee ban.

“If you’re going to try and transfer $1 billion of revenue from a (payments) industry taking it solely from the domestic institutions and in a way that favours international I don’t think it’s consistent with some of the things I’ve touched on,” Mr Comyn said.

Fighting online crooks

Mr Comyn also said the bank was proud to spend $1 billion a year on fighting financial scams and to help protect customers from online crooks.

In total he estimated the bank’s fraud prevention systems save customers $100 million each year.

“Every 24 hours our customers require us to process 21 million payments,” he said. “We try to assess each one to predict whether they may be subject to scams, fraudulent or look suspicious.”

In the afternoon, Westpac’s chief executive Anthony Miller repeatedly slammed Facebook and Instagram owner Meta for failing to cut down on financial crime scams targeting Australians on its social media platforms.

“Meta made $16 billion in ad revenue globally (last year) as a result of ads for what were effectively just scams,” Mr Miller told the committee.

“When we’ve identified a scam through engaging with the customers we let the media platforms know, but it’s fair to say the response is not always where we would like it to be, and hence why we think it’s really important that everyone has a (regulatory) code they deliver on.”

Mr Miller also ripped into Meta for its failure to prevent mule account crime where individuals offer their bank accounts for sale to anyone who may want to use them often for criminal activities.

“If you go on, dare I say it Facebook, and look up bank accounts for sale...you’ll see the bank’s name, and the cost of that bank account,” said. “So that’s an illegal activity yet it’s allowed to prosper and when that bank account gets sold and we don’t know there’s a change but it’s now owned by a criminal.”

Definition of value destructive

CBA’s Mr Comyn also used his opening address to suggest regulatory rules that require banks to keep a fixed amount of idle capital in reserve to cover bad debts are too onerous, harming competition, and his bank’s own financial performance to the detriment of shareholders.

“Every time we make a loan, we have to set aside capital for expected and unexpected losses,” said Mr Comyn. “There’s only two sources for that (capital). You either have to generate profit as an institution, or you have to ask for that money from shareholders and investors.”

Mr Comyn also pointed to overseas banks pulling out of the home loan lending market in Australia as evidence that the profitability isn’t sufficient on loans due to the strictness of regulations requiring banks to keep capital as a buffer in reserve. While arguing that the bank doesn’t make a profit on 50 per cent of the retail customers it offers account services to.

”Returns across many financial institutions are sub cost of capital,” he said. “That’s the definition of value destructive. It’s also very hard for banks when they are not earning their cost of capital to be able to lend.”

As an example he added that current capital adequacy requirements enforced by banking regulator APRA mean CBA must hold $15,000 in idle capital in reserve against a a standard $500,000 home loan. If the loan becomes classified as at high risk of default then CBA needs to hold $100,000 in reserve against its $1 million value.

The more capital banks must hold idly in reserve, the lower their profitability as defined by key metrics such as return on equity.

CBA shares fetched $153.20 on Tuesday lunchtime and have now erased all their gains for 2025.