Australia’s biggest bank says loan applications have dived by 15 per cent since May, as its CEO talks of tough times for Australians and the economy.

Revelations of CommBank’s lending slowdown come two days after a similar warning from Westpac, which reported a 20 per cent drop in borrower applications, as Australia’s finance sector feels the fallout from changes for property investors in the Federal Budget.

CBA’s loan warning came as it unveiled a $10.9 billion annual profit – a new record for any Australian bank.

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CEO Matt Comyn addressed investors and analysts shortly after the profit release, speaking repeatedly of challenges to the economy and everyday Australians.

Notably, he said growth in mortgage offsets has slowed, as more borrowers dip into savings to get by.

While 85 per cent of the bank’s mortgagees are ahead in repayments, the number falling into arrears has grown, particularly in the last six months.

The bank is currently providing hardship assistance to 147,000 borrowers. However, its number of “troubled loans” remains under one per cent.

Chief Financial Officer Alan Docherty said CommBank was watching its mortgage book closely. “There are clearly pockets of customer stress, given higher living costs and higher interest rates,” he said.

Comyn described the mortgage market as intensely competitive. “There’s a lot of pricing activity in the market, a little bit of a re-emergence in the prevalence of cashback (offers).”

However, he said CBA would not sacrifice stability and profits in the chase for new loans. The bank is Australia’s biggest lender and now writing 600 home loans each day.

CBA’s annual report highlights a focus on AI, with 80 per cent of its staff now using the technology each week.

The bank has opened an office in Silicon Valley to partner with AI developers as its seeks to deliver better customer service at greater speed. “We think we’re going to get a lot more done, given the velocity benefits,” said Docherty.

However, CBA noted AI was a double-edged sword and being weaponised by scammers, with the bank now spending a billion dollars a year to protect customers from increasingly sophisticated fraud. It’s sending 40,000 fraud alerts to customers each day.

CommBank is the nation’s biggest financial institution, with one in three Australians naming it as their primary bank. It now boasts 18.6-million customers, with the largest branch network in the land. The bank says its popular app is now recording more than 14-million log-ins each day.