Commonwealth Bank of Australia Declares 5.09% Stake in Australian Finance Group, Surpassing Substantial Holder Threshold

Details of CBA’s 5.09% Relevant Interest in Australian Finance Group

Commonwealth Bank of Australia, one of the nation’s four major banks, formally notified Australian Finance Group Ltd on 15 July 2026 that it became a substantial holder by acquiring a relevant interest in 13,728,149 fully paid ordinary shares, representing 5.09% of total voting power. Under Australian corporate law, crossing the 5% relevant interest threshold triggers a requirement to lodge formal disclosure with both the company and the ASX within two business days.

The notice breaks down the shareholding into two categories: 281,201 shares (0.10% voting power) and 13,446,948 shares (4.98% voting power). Combined, these total 13,728,149 shares and the aggregate 5.09% voting power. This reflects the different capacities in which CBA’s group entities hold or control AFG shares, as outlined in the filing.

Composition of CBA’s Relevant Interest via Colonial First State and Avanteos Investments

CBA’s relevant interest largely arises through its control of Colonial First State Investments Limited (ACN 002 348 352) and Avanteos Investments Limited (ACN 096 259 979). According to paragraph 608(3)(a) of the Corporations Act 2001, CBA holds a relevant interest in securities controlled by entities where it has over 20% voting power. Since CBA and its related bodies corporate hold more than 20% voting power in both entities, CBA is attributed relevant interest in any AFG shares they hold or control.

The notice clarifies that while CBA is attributed this relevant interest for disclosure purposes, neither CBA nor its related bodies corporate are registered as the legal holders of these securities. CBA’s voting and disposal rights are accordingly qualified. This arrangement is typical in large financial groups where parent companies hold relevant interests through subsidiaries acting in trustee, custodial, or responsible entity roles.

Colonial First State Investments Limited’s Role in Over 13.4 Million AFG Shares

Colonial First State Investments Limited holds the largest portion of the disclosed relevant interest, with 13,446,948 fully paid ordinary shares in AFG. This interest arises from Colonial First State’s residual power to control voting and disposal rights as the responsible entity of managed investment schemes, which are managed by independent external managers rather than Colonial First State or its related bodies.

The notice states Colonial First State has authorized external managers to exercise voting and disposal powers, except where Colonial First State retains rights to terminate management agreements or intervene after termination. Additionally, Colonial First State holds a relevant interest in 36,915 shares as registered holder in a custodial capacity or as responsible entity of schemes it directly manages. This dual role is a key structural feature of the disclosure.

Avanteos Investments Limited’s Superannuation Trustee Interest in AFG Shares

Avanteos Investments Limited holds a relevant interest in 36,915 fully paid ordinary shares in AFG, arising from its role as a superannuation trustee under paragraphs 608(1)(b) and 608(1)(c) of the Corporations Act. In this capacity, Avanteos controls voting and disposal rights. The registered holder of these shares is Citicorp Nominees Pty Limited, a common custodian in Australian superannuation and managed funds.

This trustee capacity means Avanteos exercises investment discretion over these shares on behalf of fund members, consistent with standard disclosure practices for superannuation trustees holding listed equities.

CBA’s Direct Proprietary Interest and Borrowing Arrangement with Merrill Lynch

Separately, Commonwealth Bank of Australia holds a direct relevant interest in 244,286 fully paid ordinary shares in AFG in a proprietary capacity. These shares were borrowed from Merrill Lynch International, with The Bank of New York Mellon, Sydney Branch, recorded as the registered holder. The borrowing details are outlined in Annexure C of the filing.

Such securities borrowing is common among institutional investors for trading and risk management. Borrowed shares confer voting and disposal rights to the borrower during the borrowing period, creating relevant interest under the Corporations Act. The consideration paid for acquisitions in the four months prior to becoming a substantial holder is detailed in Annexure B.

Registered Holders Behind CBA’s Substantial Interest in AFG Shares

The filing lists registered holders underlying CBA’s relevant interest: 11,372,342 shares are registered to Citibank N.A. Hong Kong (linked to Colonial First State), 1,905,633 shares with Citicorp Nominees Pty Limited (Australia) for Colonial First State, and 168,973 shares with UBS Nominees Pty Ltd, also connected to Colonial First State. Additionally, 99,454 shares attributed to Colonial First State were borrowed from UBS AG under Agreement 1 (Annexure C). Avanteos’s 36,915 shares are registered with Citicorp Nominees Pty Limited, and CBA’s 244,286 directly held shares are registered with The Bank of New York Mellon, Sydney Branch. This multi-custodian, multi-entity structure is typical for diversified financial groups operating across superannuation, managed funds, and proprietary investments.

Implications of Section 671B Filing for AFG’s Shareholder Register

The Form 603 lodged by CBA is a statutory notice under Section 671B of the Corporations Act 2001, requiring entities crossing the 5% relevant interest threshold in a listed company to notify the company and ASX within two business days. The trigger date is 15 July 2026, when CBA’s group entities surpassed this threshold in Australian Finance Group.

This development is significant for AFG’s corporate governance and shareholder monitoring. As a major player in the Australian mortgage broking sector, the disclosure that a leading Australian bank holds a 5.09% relevant interest—primarily through managed funds and superannuation vehicles rather than direct strategic investment—is closely watched by investors. Any future changes of 1% or more in CBA’s stake will trigger further substantial holding notices.

Overview of Australian Finance Group’s Role in the Australian Mortgage Industry

Australian Finance Group Ltd (ASX:AFG) is a prominent Australian financial services company specializing in mortgage broking aggregation. As one of the country’s largest mortgage aggregators, AFG provides brokers access to a broad range of home loan products from multiple lenders. Its business model focuses on aggregating loan volumes from its broker network and generating revenue through trail commissions and upfront fees from loan settlements. AFG also offers proprietary mortgage products under the AFG Home Loans brand, adding a lending dimension to its aggregation services.

AFG’s market position exposes it to macroeconomic factors such as residential property activity, Reserve Bank of Australia interest rate decisions, and regulatory policies affecting mortgage broking and financial advice. As a listed company, AFG is subject to continuous disclosure rules, with substantial holder notices like CBA’s forming part of the transparency framework governing Australian listed entities. The immediate impact of this substantial holder notice on AFG’s share price was not evident at the time of this report.