Three of the big four have reported this week, and they all had a lot to say about property prices and mortgages in Australia. Straight from the top, here’s what we heard from each CEO during bank reporting season.
Westpac updated the market on its third quarter on Monday, Commonwealth Bank delivered its full-year result on Wednesday, and ANZ reported its third quarter yesterday.
It’s worth noting straight away that the three are not directly comparable: CBA’s result is a full 12 months to 30 June. Westpac’s and ANZ’s are three-month trading updates covering the same quarter-end. Where they’re similar, however, is in how they identified similar pressures in the economy right now. Higher interest rates, a potential stall in the mortgage market, and battered household budgets.
Each of the three put a number on how far home loan applications have fallen since the May Budget. Westpac said 20%. CBA said 15%. ANZ said 12%. While they’re not quite measuring exactly the same thing, the observations are all noteable.
Commonwealth Bank (ASX:CBA)
CBA reported cash net profit after tax of $10.9 million for the year to 30 June 2026, up 7%. Statutory net profit was up 8%. Operating expenses rose 6% to $13.7 million, putting the cost-to-income ratio at 45.5%. The board declared a final dividend of $2.70 per share fully franked, taking the full-year payout to $5.05, up 4%. Home loan balances – an Aussie bank’s bread-and-butter – grew $41 billion to $749 billion.
Despite modest increases, CBA shares fell 0.7% on results day, followed by a further 2.2% to $169.00 in the next session. That’s a fall of 2.8% across the two days.
On household stress
Arrears rose across CBA’s consumer books: Home loans more than 90 days behind reached 0.73%, up 10 basis points on the prior half. Personal loan arrears hit 1.72%, up 31 basis points, and credit card arrears 0.73%, up 7 basis points. Loan impairment expense rose 9% to $788 million, and the bank provided more than 147,000 tailored payment arrangements over the year. Chief financial officer Alan Docherty put the arrears figure against a longer run of history, and against a much lower cash rate:
Some of that increase is seasonal. However, there are clearly pockets of customer stress given cost of living pressures and higher interest rates. If we take a longer view, our current mortgage arrears are only five basis points higher than pre-COVID levels, at which time the cash rate was approximately 300 basis points lower.
CEO Comyn said the number of home loan customers in hardship rose over the past six months but remains 15% below its recent peak. The portfolio’s dynamic loan-to-value ratio was 40.71%, and 84.8% of home loan customers were ahead of their scheduled repayments. CBA holds total provisions of $6.5 billion, $2.7 billion above its central economic scenario.
On the housing market
CBA says the fall in loan applications has already found a floor, and it has put a number on the fall in prices:
There has been a lot of interest in home loan application volumes. We have seen application levels decrease by 15% since May, but subsequently have stabilised. National dwelling prices have fallen by approximately 2.8% since their March 2026 peak, having increased nearly 70% in the past seven years.
The bank assumes the cash rate stays on hold for the rest of this year, followed by a couple of cuts during 2027, which the bank expects would bring buyers back. CFO Docherty told analysts that low single-digit moves in house prices barely register in the bank’s loan loss modelling, and that unemployment matters far more.
Comyn argued the property prices debate is the wrong one to be having:
There is understandably a lot of focus on short-term movements in house prices, given they represent a large share of household wealth. But Australia’s deeper housing challenge is our inability to build enough homes quickly and affordably.
On the mortgage price war
Analysts on the results call asked Comyn if cheaper wholesale funding has opened a price war in home lending. In his answer he referred to Westpac’s update two days earlier, and ruled out chasing volume:
When you have got the five largest players, one presumably wanting to continue to grow well above, all of the others wanting to probably be there or thereabouts on system, and obviously noticed the comments from Westpac. Underlying that, if the question is: Is there a change in our strategy where we are going to be preferencing volume over margin and risk-adjusted returns? No.
On artificial intelligence
CBA held investment in tech at $2.4 million, up 6%, and will keep it at $2.4 billion next year, which is a modest cut in real terms. Docherty said the AI programme is about to cross over from cost to payback, with gross benefits doubling from $200 million to more than $400 million:
We expect the gross benefits to exceed the level of investment in the next financial year. At the moment, we’re still in, I’d describe it, as the investment phase. So we’re investing a little more than the benefits that we’re realising through 2025 and 2026. We see that the inflection occurring during the next financial year.
So what does it get for the billions in investment? The bank moved its core banking system to the cloud during the year. Its Companion assistant has been adopted by a third of the customers given access, half of their queries covering spending and saving, and virtual messaging now handles 86% of conversations end to end. CBA has begun using agentic AI in business lending, including a first controlled end-to-end business loan pilot. It also ran a national AI, cybersecurity and digital capability initiative with OpenAI aimed at one million small businesses, and spent more than $1 billion on fraud, scams, cyber threats and financial crime.
Comyn used the results to argue that AI platforms moving into financial services should carry the same obligations that banks do:
Similar financial activities and risks should attract equivalent customer protections and obligations, whether they are delivered by a regulated bank or through an AI platform.
On the Australian economy
Comyn closed on the economy, and on what he says the country cannot rely on:
The economy remains resilient, and we should be optimistic about Australia’s long-term potential. But existing wealth does not guarantee future living standards. It depends on our ability to invest, adapt, and build the capabilities required for the future.
He said the external environment is now more demanding and less predictable, with growth slowing and geopolitical risks elevated.
Westpac (ASX:WBC)
Westpac’s third-quarter update covered the three months to 30 June 2026. Statutory net profit was $1.8 billion, up 3% on the first-half quarterly average, and net profit was up 2%.
Credit impairment charges held at 10 basis points of average gross loans
Westpac shares closed at $37.93 on Friday 7 August, the session before the update, and at $35.70 on Monday, a fall of 5.9%. They closed at $35.69 on Tuesday.
On the mortgage market
Mortgage applications fell 11% over the quarter and are down a precipitous 20% since the May Budget for Westpac. Asked what was driving it, chief financial officer Nathan Goonan pointed to borrowers who cannot read where rates are heading, and said the market had stopped moving:
We’ve gone from a period, even if you just took our economic forecast, where we’re expecting 2 rate rises and now we’re potentially suggesting the next rate move is down. That type of uncertainty does particularly put the mortgage market into a bit of a suspended animation.
On rates versus the Budget
Westpac has separated the two forces acting on borrowers, and says rate hikes are doing at least as much work as the May Budget changes. Investors have pulled back harder than owner-occupiers:
Owner occupier is down 18% and investor down 26%, which I guess we probably draw some conclusion from that the rate impact is probably equal or potentially a bigger impact than anything that happened in the budget.
Chief executive Anthony Miller drew a line between households and businesses in the results announcement:
While many households are feeling the impact of cost of living pressures, businesses are investing and our customers have continued to show resilience.
Westpac expects housing credit growth to slow from 6.8% in FY26 to 4.7% in FY27, and business credit growth of about 8% this financial year.
On hardship and delinquencies
Westpac’s arrears moved in the same direction as CBA’s. Goonan gave the numbers alongside the same word Comyn used, resilient:
Households have been resilient in the face of higher interest rates and cost of living pressures. Mortgage delinquencies edged up one basis point to 58 basis points, and hardship balances rose five basis points.
Westpac said it would revise its economic forecasts after this week’s Reserve Bank meeting and feed them into its credit loss models. It reports its full-year result in November.
ANZ (ASX:ANZ)
ANZ reported cash profit of $1.90 billion for the three months to 30 June, up 1% on the first-half quarterly average. Statutory profit was $1.95 billion.
ANZ shares closed at $36.39 on Wednesday 12 August, the session before the update, and at $38.04 on Thursday, a rise of 4.5%. Just over 7 million shares traded, about 1.5 times the daily average. ANZ was the only one of the three banks whose shares rose on the day it reported.
On the mortgage market
ANZ went last of the three, and chief financial officer Farhan Faruqui addressed the other two head on before giving his own number:
There has been a lot of recent market commentary around home lending. In that context, ANZ’s mortgage application value in the third quarter was flat quarter on quarter, supported by our participation in the First Home Buyer’s Guarantee Scheme from late March. Excluding the impact of the scheme, application value declined 5% quarter on quarter and 12% since the changes in May.
Two things separate that from the Westpac and CBA figures, however. ANZ measures the dollar-value of applications where the other two counted them, and ANZ’s headline number is flat because the First Home Buyer’s Guarantee Scheme filled the hole. Take the scheme out and ANZ’s fall since May is 12%, against CBA’s 15% and Westpac’s 20%.
Chief executive Nuno Matos said the bank had brought its home lending back to the market rate of growth, and Faruqui was blunt about how much of ANZ’s strategy rests on it:
I want to be clear, our ANZ 2030 strategy is not over-indexed on mortgages. While mortgages remain an important relationship product, ANZ 2030 is focused on growing everyday banking to deepen customer relationships supported by ANZ’s distinctive and well-diversified portfolio.
On margins
Westpac said it was hard to see margins rising. Asked whether growing back to system in housing while competition intensifies would push ANZ’s margin down, Faruqui took the other side:
Overall, as I have said in the first half guidance, our second half NIM has a bias to the upside and we continue to maintain that position.
He conceded ground on the mortgage book itself, saying competition in home lending had risen over the past couple of months and that core margin in housing was “down a little bit” in July, with gains on deposits and the replicating portfolio offsetting it. ANZ has now collected 4 basis points of the 7 basis point replicating portfolio tailwind it flagged at the half, leaving about 3 to come over the next year.
On household stress
ANZ’s arrears moved the same way as the other two, from a different starting point. Australian housing loans more than 90 days past due rose to 86 basis points from 83, and the New Zealand book to 82 from 80.
Greater than 90 days past due housing loan exposures increased slightly in both Australia and New Zealand, but remained below levels seen this time last year.
Non-performing exposures held at 0.55% of total credit exposure. The collective provision balance rose to $4.48 billion, about $2 billion above ANZ’s base case scenario, and the individual provision charge fell to $65 million. Faruqui said portfolio performance remains in line with the past five years, while flagging that ANZ continues to watch geopolitical and macroeconomic conditions and their effect on Australia and New Zealand.
ANZ is also midway through a restructure. It has cut 84% of the 3,500 roles it announced in September 2025, and banked 73% of $875 million in gross cost savings targeted for this financial year. The bank held its guidance for full-year costs about 5% below last year’s $11.85 billion. ANZ’s financial year ends on 30 September.
This article does not take into account the investment objectives, financial situation or particular needs of any individual. It does not constitute formal advice. Past performance is not a reliable indicator of future performance.
