August 13, 2025 • 13 mins
What's next for Commonwealth Bank?
Yesterday, Commonwealth Bank reported a record $10.25b profit. But investors sold off the stock, driven by concerns over the outlook and expensive valuation.
Commonwealth Bank CEO Matt Comyn speaks to Nadine Blayney from Ausbiz.
Ausbiz is Australia's leading provider of live and on-demand video of the latest news in Australian business, markets, economy and startups. Sign up for free at ausbiz.com.au
Find out more: https://fearandgreed.com.au/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Welcome to Fear and Greed Q and A, where we
ask and answer questions about business, investing, economics, politics and more.
I'm Michael Thompson, and today what does the future hold
for Commonwealth Bank? Yesterday, Australia's largest company announced a ten
point twenty five billion dollar cash profit right on expectations
that investors sold off the bank driven by concerns over
CBA's expensive valuation and at share price closed more than
(00:28):
five percent lower. Matt Common, chief Executive of Commonwealth Bank,
spoke with Nadean Blaney at Osby's, which is Australia's leading
provider of live and on demand video of the latest
news in Australian business, markets, economy and startups. You can
sign up for free at Osby's dot com dot au.
Nadein started out by asking Matt Common about Commonwealth Bank's
share price.
Speaker 2 (00:52):
Well, as you might expect that trying not to spend
too much time on the share price is very hard
for me.
Speaker 3 (00:57):
Also to make the comparisons.
Speaker 2 (00:59):
I've been CEO for more than seven years at CBA
in more than twenty five years, so I understand CBA
very well. We focus on what we can control and
we know that over the long term, if we do
a great job serving our customers, we invest in our
technology and deliver our superior proposition to as many Australian
personal customers and business customers, then over the long term
(01:22):
the results will be good for our shareholders and that
will of course support the share price.
Speaker 4 (01:28):
Well, there is a well reported I guess you could
call it shift and culture going on at some of
your competitors right now as they look to gain market share. Obviously,
are competitive sources in Australia still strong.
Speaker 3 (01:40):
Yeah, absolutely.
Speaker 2 (01:40):
I think the competitive intensity across a lot of sectors,
but in banking in particular in the last few years,
so definitely you see a lot of competition for people.
Obviously for customers. I think that's good news for customers
though as well. Our healthy and competitive market puts pressure
on margins and you've seen that in the bank industry
now over many years. There we're all competing aggressively for
(02:06):
new and to retain existing customers and also for talent
across the market. But I mean that's an environment that
we're used to and we know how important it will
be to just think long term, attract and retain great people,
have them highly engaged and motivated to serve our customers
really well and make sure we provide the best overall
(02:26):
outcomes for all of our stakeholders over the long term.
Speaker 4 (02:30):
So McQuary is now a serious mortgage competitor and it
doesn't have a single branch. I can only think that
that's possible because of advancements in tech today. Matt, you've
unveiled a partnership with open AI, Like, what exactly does
that mean for the bank?
Speaker 3 (02:48):
Well, look, a couple of things.
Speaker 2 (02:49):
I mean, we're proud to be the bank for all
Australians as the Commonwealth Bank I mean Macquarie, and they
are You're a serious competitor.
Speaker 3 (02:56):
They largely compete and seek.
Speaker 2 (02:59):
To attract a very particular type of customer, really a
metropolitan areas. So it's very much a digital only proposition. Obviously,
we have a broad customer base. We need to be
able to serve the needs of all Australians. I mean,
AI obviously is a technology that we see over the
long term is going to bring real potential opportunities and
(03:22):
certainly risks and threats. From our perspective, we know it's
important to build capability both internally with our people and
use that capability to deliver great experiences for our customers
and also to protect our customers and keep them and
their money and their information safe.
Speaker 3 (03:39):
There's a small number of.
Speaker 2 (03:40):
Globally leading companies, one of which is open Ai. We
announced a multi year partnership with them. We've already got
a partnership and a small equity investment in anthrop It,
which is another of the large language model research companies
based in the US. And again, I think it's all
about building capability at CBA, but this is also part
(04:01):
of an important I think national debate and discussion because
this sort of technology I think we'll have significant implications
certainly over the long term, and we need to have
a very clear strategy in Australia and obviously across different
industries and specifically for US obviously the Commonwealth Bank.
Speaker 4 (04:19):
Yeah, And is that the edge that you believe will
take the Commonwealth Bank into the next phase, the next
phase of growth.
Speaker 2 (04:28):
Well, I think there's three things, at least three things
over the long term that have been really important. A
huge focus on our customers and our customer experience through
either satisfaction or we talk about MPs net promoter score
and advocacy. The second has been technology that really underpins
that experience, and then third just consistency of operational strategic
(04:50):
execution that really matters, as you'd expect of any owner,
basically a company delivering what they say they're going to
deliver and do that consistently over the long term. So
from a techno pology perspective, digital has been a big
part of our investments over a couple of decades really now,
and we know that the vast majority of Australians choose
to interact with their financial institution digitally. We get more
(05:14):
than ten million logins every day. AI and particularly generative
AI techniques or technologies that we're going to integrate into
both the digital experience as well as I think many
aspects of the way we serve our customers to further
and improve that customer experience.
Speaker 4 (05:32):
So when or how do you think you'll really reap
the rewards in terms of cost from AI and the
investments that you're making and have had made, Because there
is that conundrum in the market right now that you've
got to spend big to get there, but the promises
are still vague if we don't exactly know how it's
(05:54):
all going to play out in the long run. So
how do you balance those risks?
Speaker 2 (05:58):
That's absolutely right, A lot of uncertainty, a lot of
uncertainty about the potential and also just the timing of
the benefits and what's the nature of the benefits. Are
they going to be revenue? You mentioned costs or expenditure?
I mean, how are work and roles going to be created?
I mean, in every other cycle we've seen, even where
some tasks maybe are no longer as relevant as they were,
(06:20):
when greater automation comes in, new roles also emerge. What
we do know though, is that companies and countries that
are growing create jobs. That's an important part of it.
I mean for us, i'd say the benefits, even though
we're sort of using it right across the organization, are
relatively small in the scheme of the sorts of investments
that we make on an annual basis.
Speaker 3 (06:42):
But I think when you're running a company and you.
Speaker 2 (06:45):
Have to be prepared to take risks, and I think
the cost maybe of being late to a technology like
that is greater than even if we try some things
then they fail.
Speaker 3 (06:56):
I think it's important to keep.
Speaker 2 (06:59):
Learning by doing and being clear about what your outcomes are.
Speaker 3 (07:02):
You know, we're.
Speaker 2 (07:03):
Trying and using some of these technologies in a range
of different ways to keep our customers safe and fraud,
support our relationship managers, deliver a better banking experience, to
help our thousands of software engineers develop more software and
deploy that safely to all of our systems.
Speaker 4 (07:19):
Now you mentioned Australia there, Matt, this economic roundtable that's
coming up being held by the government and many stakeholders.
Ahead of that, you put out some I think what's
been seen as pretty bald ideas in your submission, including
major tax reform. So in your view, what happens to
Australia if there is failure at the policy level to
(07:42):
implement perhaps not all of your ideas, but you know,
economic reforms.
Speaker 2 (07:49):
Yeah, I've been Firstly, we welcome the government's focus on
economic reform and productivity. These are really important and challenging topics.
It wasn't an electoral commitment, so I think they really
should be congratulated for creating the space and the dialogue
to be able to contribute to this discussion. From on
our part, we seek to contribute constructively both the head
(08:12):
of the roundtable and during it and perhaps also beyond
that on behalf of the more than ten million personal
customers that we serve in Australia and more than a
million business customers. I mean, it's very clear that if
a country that can boost productivity and it's output per capita,
it underpins improvements in living standards, increases in real wages
(08:33):
and lead leads to greater prosperity for future generations. It
is not an easy question or challenge, and many of
there reform ideas that I think will be tabled and
hopefully contemplated. There are always trade offs and risks and
costs and trying to get that balance right obviously, and
those decisions is a matter for government, and obviously I
(08:57):
think there's a role, as I said, to contribute to
that debate and discussion and hopefully to try to advocate
and help we recognize that reform and convincing the broader
electorate that some of these changes may be necessary and
are in the collective long term interest. That's hard and
(09:17):
so when it's going to take work, and I think
it's really important that as many people as possible try
to get in behind that and support, you know, a
greater policy ambition. So that Australia continue to be, you know,
a country that outperforms economically as well as being obviously
a wonderful, safe and secure place to live.
Speaker 4 (09:37):
Yeah, well here's that. Back to the bank itself though, Matt. Look,
the consensus is that growth is limited. So where where
does meaningful future growth come from?
Speaker 2 (09:47):
In your few well, I mean a lot of it
will come from what we were just talking about, and
we're effectively highly leveraged to the underlying performance of the
Australian economy. So you know, greater GDP growth, greater credit growth,
greater and BET, greater jobs growth, skills, they're all very
positive structural tailings for the Commonwealth Bank. I mean, we
(10:07):
have a very strong retail bank, We've really grown our
business bank across the last twelve months, all of our
business units have performed well, so I mean we see
opportunities for growth across all of those areas. Obviously, trying
to differentiate ourselves from a technology and customer proposition is
really important, but I mean the macro picture for Australia
(10:28):
is really important to us, as it is for many
or all Australians, and so we're very concentrated on Australia
and hence why we're so committed to doing what we
can to support greater economic growth and prosperity.
Speaker 4 (10:43):
Is there no ambitions to go offshore?
Speaker 2 (10:46):
No, I mean we have some offshore operations which predominantly
support Australian customers.
Speaker 3 (10:51):
You know, we do have international clients in a range
of sectors.
Speaker 2 (10:56):
But I'd say the proportion of financial institution us that
try to scale offshore into a market which is highly
competitive as Australia is as a very shortlist of financial
institutions who go on to deliver a value of creative strategy.
So we're going to try and stick to what we
hope we're good at and try and get better at that,
(11:18):
look for opportunities that make sense to grow and not
sort of stray into areas where we don't have any
sort of competitive advantage or operating experience.
Speaker 4 (11:28):
Now, just quickly the tilt to business banking. Are you
pleased with how that's going? Is it growing fast enough
for you? Are you gaining market share fast enough? Yeah?
Speaker 2 (11:36):
I think the team have done a very good job
over the last five years in growing right across the
board main bank relationships. They grew almost two percentage points
in the last twelve months. Very strong deposit growth, lending
growth actually, I mean right across the board, all of
our key priority segments. So look, we're very pleased with
(11:56):
the growth that's been achieved. I mean, I think you've
always got to reconsider each year depending on what the
market circumstances are in terms of what risks are there
and also what sort of margins are available. But at
this stage where we're very comfortable, we believe that the
year ahead will be another good year for our business.
Speaker 3 (12:15):
Bank.
Speaker 4 (12:16):
Now, Matt, you mentioned that you've been at the Helm
for more than seven years, I think almost eight years
through extraordinary times post Royal commission through COVID, you know,
the dizzy and share price appreciation. I'd love to know
what it's been like to be, you know, the head
of the most expensive bank in the world is it's
been called. But how much longer will you be at it?
(12:38):
Are there are there succession plans at the bank?
Speaker 2 (12:40):
Well, part of the role of any company is, certainly
the board of any company is to think about succession.
You're going to start thinking about succession from from day one.
From my perspective, you know, I feel privileged to be
able to lead the Commonwealth Bank on a one hundred
percent focused on doing that certainly for the foreseeable future,
and if there's any change to that, we'll of course
(13:02):
be sure to notify the ax.
Speaker 1 (13:07):
That was Commonwealth Banks CEO Matt Common speaking to Nadine
Blaney at Osby's. Go to Osby's dot com dot au
for more info. I'm Michael Thompson and this is Beer
and Greed Q and a
Welcome to Fear and Greed Q and A, where we
ask and answer questions about business, investing, economics, politics and more.
I'm Michael Thompson, and today what does the future hold
for Commonwealth Bank? Yesterday, Australia's largest company announced a ten
point twenty five billion dollar cash profit right on expectations
that investors sold off the bank driven by concerns over
CBA's expensive valuation and at share price closed more than
(00:28):
five percent lower. Matt Common, chief Executive of Commonwealth Bank,
spoke with Nadean Blaney at Osby's, which is Australia's leading
provider of live and on demand video of the latest
news in Australian business, markets, economy and startups. You can
sign up for free at Osby's dot com dot au.
Nadein started out by asking Matt Common about Commonwealth Bank's
share price.
Speaker 2 (00:52):
Well, as you might expect that trying not to spend
too much time on the share price is very hard
for me.
Speaker 3 (00:57):
Also to make the comparisons.
Speaker 2 (00:59):
I've been CEO for more than seven years at CBA
in more than twenty five years, so I understand CBA
very well. We focus on what we can control and
we know that over the long term, if we do
a great job serving our customers, we invest in our
technology and deliver our superior proposition to as many Australian
personal customers and business customers, then over the long term
(01:22):
the results will be good for our shareholders and that
will of course support the share price.
Speaker 4 (01:28):
Well, there is a well reported I guess you could
call it shift and culture going on at some of
your competitors right now as they look to gain market share. Obviously,
are competitive sources in Australia still strong.
Speaker 3 (01:40):
Yeah, absolutely.
Speaker 2 (01:40):
I think the competitive intensity across a lot of sectors,
but in banking in particular in the last few years,
so definitely you see a lot of competition for people.
Obviously for customers. I think that's good news for customers
though as well. Our healthy and competitive market puts pressure
on margins and you've seen that in the bank industry
now over many years. There we're all competing aggressively for
(02:06):
new and to retain existing customers and also for talent
across the market. But I mean that's an environment that
we're used to and we know how important it will
be to just think long term, attract and retain great people,
have them highly engaged and motivated to serve our customers
really well and make sure we provide the best overall
(02:26):
outcomes for all of our stakeholders over the long term.
Speaker 4 (02:30):
So McQuary is now a serious mortgage competitor and it
doesn't have a single branch. I can only think that
that's possible because of advancements in tech today. Matt, you've
unveiled a partnership with open AI, Like, what exactly does
that mean for the bank?
Speaker 3 (02:48):
Well, look, a couple of things.
Speaker 2 (02:49):
I mean, we're proud to be the bank for all
Australians as the Commonwealth Bank I mean Macquarie, and they
are You're a serious competitor.
Speaker 3 (02:56):
They largely compete and seek.
Speaker 2 (02:59):
To attract a very particular type of customer, really a
metropolitan areas. So it's very much a digital only proposition. Obviously,
we have a broad customer base. We need to be
able to serve the needs of all Australians. I mean,
AI obviously is a technology that we see over the
long term is going to bring real potential opportunities and
(03:22):
certainly risks and threats. From our perspective, we know it's
important to build capability both internally with our people and
use that capability to deliver great experiences for our customers
and also to protect our customers and keep them and
their money and their information safe.
Speaker 3 (03:39):
There's a small number of.
Speaker 2 (03:40):
Globally leading companies, one of which is open Ai. We
announced a multi year partnership with them. We've already got
a partnership and a small equity investment in anthrop It,
which is another of the large language model research companies
based in the US. And again, I think it's all
about building capability at CBA, but this is also part
(04:01):
of an important I think national debate and discussion because
this sort of technology I think we'll have significant implications
certainly over the long term, and we need to have
a very clear strategy in Australia and obviously across different
industries and specifically for US obviously the Commonwealth Bank.
Speaker 4 (04:19):
Yeah, And is that the edge that you believe will
take the Commonwealth Bank into the next phase, the next
phase of growth.
Speaker 2 (04:28):
Well, I think there's three things, at least three things
over the long term that have been really important. A
huge focus on our customers and our customer experience through
either satisfaction or we talk about MPs net promoter score
and advocacy. The second has been technology that really underpins
that experience, and then third just consistency of operational strategic
(04:50):
execution that really matters, as you'd expect of any owner,
basically a company delivering what they say they're going to
deliver and do that consistently over the long term. So
from a techno pology perspective, digital has been a big
part of our investments over a couple of decades really now,
and we know that the vast majority of Australians choose
to interact with their financial institution digitally. We get more
(05:14):
than ten million logins every day. AI and particularly generative
AI techniques or technologies that we're going to integrate into
both the digital experience as well as I think many
aspects of the way we serve our customers to further
and improve that customer experience.
Speaker 4 (05:32):
So when or how do you think you'll really reap
the rewards in terms of cost from AI and the
investments that you're making and have had made, Because there
is that conundrum in the market right now that you've
got to spend big to get there, but the promises
are still vague if we don't exactly know how it's
(05:54):
all going to play out in the long run. So
how do you balance those risks?
Speaker 2 (05:58):
That's absolutely right, A lot of uncertainty, a lot of
uncertainty about the potential and also just the timing of
the benefits and what's the nature of the benefits. Are
they going to be revenue? You mentioned costs or expenditure?
I mean, how are work and roles going to be created?
I mean, in every other cycle we've seen, even where
some tasks maybe are no longer as relevant as they were,
(06:20):
when greater automation comes in, new roles also emerge. What
we do know though, is that companies and countries that
are growing create jobs. That's an important part of it.
I mean for us, i'd say the benefits, even though
we're sort of using it right across the organization, are
relatively small in the scheme of the sorts of investments
that we make on an annual basis.
Speaker 3 (06:42):
But I think when you're running a company and you.
Speaker 2 (06:45):
Have to be prepared to take risks, and I think
the cost maybe of being late to a technology like
that is greater than even if we try some things
then they fail.
Speaker 3 (06:56):
I think it's important to keep.
Speaker 2 (06:59):
Learning by doing and being clear about what your outcomes are.
Speaker 3 (07:02):
You know, we're.
Speaker 2 (07:03):
Trying and using some of these technologies in a range
of different ways to keep our customers safe and fraud,
support our relationship managers, deliver a better banking experience, to
help our thousands of software engineers develop more software and
deploy that safely to all of our systems.
Speaker 4 (07:19):
Now you mentioned Australia there, Matt, this economic roundtable that's
coming up being held by the government and many stakeholders.
Ahead of that, you put out some I think what's
been seen as pretty bald ideas in your submission, including
major tax reform. So in your view, what happens to
Australia if there is failure at the policy level to
(07:42):
implement perhaps not all of your ideas, but you know,
economic reforms.
Speaker 2 (07:49):
Yeah, I've been Firstly, we welcome the government's focus on
economic reform and productivity. These are really important and challenging topics.
It wasn't an electoral commitment, so I think they really
should be congratulated for creating the space and the dialogue
to be able to contribute to this discussion. From on
our part, we seek to contribute constructively both the head
(08:12):
of the roundtable and during it and perhaps also beyond
that on behalf of the more than ten million personal
customers that we serve in Australia and more than a
million business customers. I mean, it's very clear that if
a country that can boost productivity and it's output per capita,
it underpins improvements in living standards, increases in real wages
(08:33):
and lead leads to greater prosperity for future generations. It
is not an easy question or challenge, and many of
there reform ideas that I think will be tabled and
hopefully contemplated. There are always trade offs and risks and
costs and trying to get that balance right obviously, and
those decisions is a matter for government, and obviously I
(08:57):
think there's a role, as I said, to contribute to
that debate and discussion and hopefully to try to advocate
and help we recognize that reform and convincing the broader
electorate that some of these changes may be necessary and
are in the collective long term interest. That's hard and
(09:17):
so when it's going to take work, and I think
it's really important that as many people as possible try
to get in behind that and support, you know, a
greater policy ambition. So that Australia continue to be, you know,
a country that outperforms economically as well as being obviously
a wonderful, safe and secure place to live.
Speaker 4 (09:37):
Yeah, well here's that. Back to the bank itself though, Matt. Look,
the consensus is that growth is limited. So where where
does meaningful future growth come from?
Speaker 2 (09:47):
In your few well, I mean a lot of it
will come from what we were just talking about, and
we're effectively highly leveraged to the underlying performance of the
Australian economy. So you know, greater GDP growth, greater credit growth,
greater and BET, greater jobs growth, skills, they're all very
positive structural tailings for the Commonwealth Bank. I mean, we
(10:07):
have a very strong retail bank, We've really grown our
business bank across the last twelve months, all of our
business units have performed well, so I mean we see
opportunities for growth across all of those areas. Obviously, trying
to differentiate ourselves from a technology and customer proposition is
really important, but I mean the macro picture for Australia
(10:28):
is really important to us, as it is for many
or all Australians, and so we're very concentrated on Australia
and hence why we're so committed to doing what we
can to support greater economic growth and prosperity.
Speaker 4 (10:43):
Is there no ambitions to go offshore?
Speaker 2 (10:46):
No, I mean we have some offshore operations which predominantly
support Australian customers.
Speaker 3 (10:51):
You know, we do have international clients in a range
of sectors.
Speaker 2 (10:56):
But I'd say the proportion of financial institution us that
try to scale offshore into a market which is highly
competitive as Australia is as a very shortlist of financial
institutions who go on to deliver a value of creative strategy.
So we're going to try and stick to what we
hope we're good at and try and get better at that,
(11:18):
look for opportunities that make sense to grow and not
sort of stray into areas where we don't have any
sort of competitive advantage or operating experience.
Speaker 4 (11:28):
Now, just quickly the tilt to business banking. Are you
pleased with how that's going? Is it growing fast enough
for you? Are you gaining market share fast enough? Yeah?
Speaker 2 (11:36):
I think the team have done a very good job
over the last five years in growing right across the
board main bank relationships. They grew almost two percentage points
in the last twelve months. Very strong deposit growth, lending
growth actually, I mean right across the board, all of
our key priority segments. So look, we're very pleased with
(11:56):
the growth that's been achieved. I mean, I think you've
always got to reconsider each year depending on what the
market circumstances are in terms of what risks are there
and also what sort of margins are available. But at
this stage where we're very comfortable, we believe that the
year ahead will be another good year for our business.
Speaker 3 (12:15):
Bank.
Speaker 4 (12:16):
Now, Matt, you mentioned that you've been at the Helm
for more than seven years, I think almost eight years
through extraordinary times post Royal commission through COVID, you know,
the dizzy and share price appreciation. I'd love to know
what it's been like to be, you know, the head
of the most expensive bank in the world is it's
been called. But how much longer will you be at it?
(12:38):
Are there are there succession plans at the bank?
Speaker 2 (12:40):
Well, part of the role of any company is, certainly
the board of any company is to think about succession.
You're going to start thinking about succession from from day one.
From my perspective, you know, I feel privileged to be
able to lead the Commonwealth Bank on a one hundred
percent focused on doing that certainly for the foreseeable future,
and if there's any change to that, we'll of course
(13:02):
be sure to notify the ax.
Speaker 1 (13:07):
That was Commonwealth Banks CEO Matt Common speaking to Nadine
Blaney at Osby's. Go to Osby's dot com dot au
for more info. I'm Michael Thompson and this is Beer
and Greed Q and a
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