But fund manager Australian Ethical, which filed the climate motion with activist group Market Forces, argued CBA’s policies still allowed it to lend to companies supporting new high-emission business.

“This bank’s support for business-as-usual is inconsistent with the bank’s commitments to align their lending with net zero by 2050,” Australian Ethical head of ethics research Stuart Palmer said.

CBA is Australia’s largest bank, holding one in four mortgages. In recent months, investors have in worried that the banking giant and its rivals will face a rising tide of bad loans due to rising rates.

Responding to a question about the risk to CBA’s mortgage customers, O’Malley signalled a key focus would be on customers rolling off fixed-rate loans who were facing a sharp repayment shock.

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O’Malley said the bank was already engaging with customers who were facing sharply higher repayments, citing the experience during the pandemic, when lenders worked with regulators to allow mass deferral of mortgage payments.

“We again have to be cognisant that many customers will find it incredibly challenging, particularly as you said, they roll off fixed-rate loans into variable-rate loans,” said O’Malley, in his first AGM as chairman of the bank.

“There’s a whole lot of processes we follow before we even provide a loan to mitigate that, but the lesson that was reinforced to us during the pandemic was proactive engagement with customers, and that proactive engagement is occurring today.”

O’Malley said the bank had made significant progress this year in its strategic priorities, which included leadership on technology, selling off non-core business, supporting its staff, and improving its culture following a run of scandals in earlier years.

CBA shares rose 2.4 per cent to $96.29.