Country’s largest mortgage lender muscles out Woolworths, Telstra, to retain top spot
BrandFinance has released its annual list of the most valuable and strongest brands in Australia and while the results are far from shocking, some of the rationale behind its rankings could raise some eyebrows.
Commonwealth Bank retained its spot as Australia’s most-valuable brand at $16 billion, representing a 2% year-on-year increase.
BrandFinance attributed this performance to “steady revenue expectations and continued strength in its core lending business”.
Growth in market capitalisation has been driven by strong home loan demand, with the bank recording a 6% increase in its total home lending, it added.
Furthermore, Commonwealth Bank “has reduced its reliance on mortgage brokers, strengthening in-house loan origination to protect margins and reinforce long-term brand resilience in a competitive banking environment”.
Is it a fair insinuation that CBA’s perceived pivot away from the broker channel and renewed emphasis on proprietary home loans has increased the bank’s brand value?
‘Brand value’, it should be said, is less black-and-white than, say, market value – it seeks to determine the financial worth of a business’ trademarks and intellectual property. It effectively seeks to place a monetary value on the name on the tin, rather than the contents of the tin.
In the context of CBA, its name, signage, recognisable yellow logo and other identifiers of the banking products has a present value of $16 billion, at least according to BrandFinance. Given CBA’s domineering presence in the Australian banking space, where it is responsible for a quarter of all new home loans, it is unsurprising to see it top the list.
When it comes to brand strength – which gives a better picture of what consumers actually think about a company – CBA comes in at number eight, below Australia Post, Bunnings, Woolworths, K Mart, Qantas, NRMA and Coles.
While CBA’s leading position in the brand value leagues has coincided with a revitalised commitment to proprietary home loans, BrandFinance may be falling for the correlation = causation fallacy.
True, without broker commissions to pay, in-house home loans theoretically come with fewer overheads. There is at least some internally derived data to suggest that in-house mortgages lead to higher margins. CBA, for instance, has previously suggested that broker-originated home loans are “20-30% less profitable than proprietary”.
But many other factors must be taken into consideration.
Research has shown that broker-introduced home loans prove to be sticky with low arrears rates.
Analysis from market-leading trail book marketplace TrailBlazer Finance shows that the average arrears rate of brokered loans remained exceptionally low at 0.54% in the 2025 financial year. While this was up from 0.38% in the 2024 financial year, this was from a low starting point and indicative of tough macroeconomic conditions for homeowners.
Credit: TrailBlazer Finance, The Finance Broking Intelligence Report
David Bailey, chief executive of mortgage aggregator AFG, meanwhile, highlighted how brokers provide a conduit to banking products that might elsewise be unavailable.
“Bank distribution has contracted massively,” said Bailey. “From more than 6,500 branches in 2007 to less than 3,800 today across all ADIs, cost-cutting closed doors – literally. As banks scaled back, brokers stepped forward.”
Bailey also highlighted that complaints to the Australian Financial Complaints Authority (AFCA) represent less than 1% of all banking and finance complaints; “a staggering outcome when brokers now facilitate more than three-quarters of home loans.”
The broking industry, added Bailey, “grew because brokers showed up for customers when complexity surged, when policies tightened, and when the pandemic created uncertainty. Australians turned to the people who would sit beside them, explain their options and advocate for them”.
CBA itself has often discussed the virtues of the broking industry.
Speaking to MPA last April, then recently recruited general manager of third-party banking Baber Zaka said he intended to clear up some misconceptions about CBA’s relationship with brokers.
“Talking to a lot of brokers out there, there is an idea that CBA doesn’t want to grow in the broker channel,” said Zaka, continuing: “That is definitely not the case… We want to do great in all our channels, and we want to grow in our broker channel as well.”
So is it really fair to suggest that brokered home loans lead to brand value deterioration? Surely more evidence is required first.
Big banks go in-house
CBA is certainly not the only banking major to increase its investment in in-house mortgages.
ANZ chief executive Nuno Matos has proprietary mortgage lending as a pillar of the bank’s redemption arc, having told shareholders last November that he hopes to “significantly strengthen our proprietary origination, both in retail and in commercial”.
That same month, NAB boss Andrew Irvine claimed that bolstering proprietary home lending is working in the bank’s favour.
