“Lower interest rates are a feature globally, and the local cash rate has fallen 75 basis points since May. This low rate environment creates challenges for our customers and for financial institutions,” Mr Comyn said.
In home loans, where CBA has the largest share in the market, Mr Comyn highlighted better conditions and said the bank had posted loan growth that was 30 per cent faster than the market.
“On housing, falling rates have contributed to a turnaround in some established housing markets. House prices are now rising in Sydney and Melbourne after having fallen for 18 months, and there are encouraging signs that the market has stabilised,” Mr Comyn said.
“Home lending to our customers has grown 30 per cent faster than market growth. This means that we have lent $92 billion to our home loan customers in the last year. There remains an abundance of housing credit available,” he said.
The government this week ordered a competition inquiry into mortgage pricing, and Ms Livingstone said this would allow it to explain the complex balancing act that went into into interest rate decisions.
“We think that will be a very valuable exercise in terms of giving us and the banks more broadly the opportunity to explain the processes,” she said.
In her prepared speech, Ms Livingstone outlined the range of changes unveiled at CBA in recent years, following a run of scandals and the royal commission.
These include CBA’s divestment of wealth management operations, higher investment in financial crimes compliance following a money laundering scandal in 2017, board renewal, and a re-vamp of how bankers are paid.
“The progress being made on divestments, together with prudent management of the business, and our balance sheet, in the current macroeconomic environment, will continue to support the delivery of sustainable returns for shareholders over the long-term,” Ms Livingstone said.
Asked about the royal commission and its impact on the bank’s lending, Ms Livingstone said the inquiry had been a “sobering” experience for the country’s biggest bank.
Mr Comyn, who has been CEO for 18 months at CBA, has made regaining customers’ trust in the banking giant his top priority, with a plan to simplify the bank. He pointed to fee cuts, new types of customer alerts, and changes to benefit rural customers, but said this was “just the beginning.”
“I recognise there is still much more to do to become a simpler, better bank, but I hope you are starting to see and experience some of the changes we’ve made,” he said to shareholders.
Banks have been attacked for failing to pass on the latest cut in official interest rates to borrowers in full, but lenders have defended the move by saying their margins are being squeezed because it is getting harder to cut deposit costs by the same amount.
Clancy Yeates is a business reporter.