- Entertainment: Despite a recent Commonwealth Bank survey showing around half of retail customers say they’re spending less on entertainment, Mr Comyn said that “[if] you go out to pubs, clubs, restaurants… all of our customer base has seen probably the best trading conditions they've seen, right around the country.” He cited one customer, a major hospitality group, that paid back tens of millions of dollars of additional debt before they expected to, because conditions are “so robust”.
- Travel and accommodation: “A number of groups that we bank into different parts of the country, into regional Australia, they'd still say they've got some of the best forward bookings that they've seen,” said Mr Comyn.
- Construction: He said there are still challenges in this sector, but that a number of its 2022 issues are likely to ease in 2023 — including input prices, labour shortages and cost of labour, and wet weather on the east coast.
- Retail: While there’s a slight “softening” at the high end of the retail sector, and some mass market fashion retailers are holding more inventory than they’d prefer, Mr Comyn said that retailers overall are “much more confident about the year ahead because they felt that there's a bit more pressure coming off”.
But despite the strong conditions, Mr Comyn said that, to judge by the findings from the business and consumer survey, “you'd actually think we're in the middle of a pretty significant economic shock — which we aren't.”
AFR columnist James Thomson, who led the conversation, asked about this “discrepancy” between business/consumer sentiment and the relatively robust economic conditions. Mr Comyn said that, while conditions are strong at the aggregate level, at the individual level, every customer “is facing a very challenging set of circumstances”.
“People are expecting more interest rate rises,” he said, adding that households are only feeling about 50 percent of the impact of the increases so far.
“I think a lot of customers are prepared, but it’s still challenging for many people… ‘I'm having to rethink my expenditure, maybe some of the things I would have otherwise like to do, I'm not able to do, or I can't plan,’” said Mr Comyn. “That's where you see people purportedly making different decisions about what they're going to be doing, where they'll be cutting back spending, intentions either they have changed and or they're going to change in the next 30 days. We still see that there's a lag effect there.”
Mr Comyn said that, despite customer concerns about the rate cycle and the cost of living, calls to CBA’s financial assistance solutions team are currently about 20-25 percent below their pre-Covid levels.
Having listened to several of these calls, Mr Comyn said they tend to be not from customers experiencing major changes to their circumstances – such as job loss or illness — but from those who are feeling “overcommitted”.
“One of the calls [was from a] single mother, was trying to get extra hours, was trying to cut back, wanted some support, wanting some assistance over the next few months in terms of a reduced repayment,” he said. “[She] was very, very grateful — became quite emotional on the call for that help.”
Mr Comyn said the job of the Commonwealth Bank is to “provide this support for our customers to get through the more challenging times and, of course, to continue to facilitate both economic growth and financial stability.”
“It's a really important time, and we have the opportunity like we did in Covid, hopefully, to really distinguish ourselves,” he said.
The AFR Business Summit ran in Sydney from 7-8 March, 2023.