Commonwealth Bank CEO admits to bank’s failures and greed during grilling in Canberra

THE Commonwealth Bank’s CEO has admitted to failures of judgement, process and leadership during a grilling from MPs, who also demanded to know how many people had been sacked in the wake of the banking royal commission.

COMMONWEALTH Bank chief Matt Comyn has faced a grilling by politicians in Canberra, where he admitted the bank had failed in terms of judgement and process as well as greed.

Mr Comyn was the first of the Big Four bank heads to be questioned before the House of Representatives committee on economics in a public hearing today.

Each will be quizzed about the “appalling behaviour” revealed at the royal commission into the banking sector.

The hearing is the first of three the committee is holding over the coming week to question the banking leaders.

Westpac’s Brian Hartzer was questioned later in the day.

ANZ chief executive Shayne Elliott will appear on Friday, while the National Australia Bank’s Andrew Thorburn will appear next week.

The hearing is being held less than two weeks after banking royal commissioner Kenneth Hayne QC delivered an interim report, blaming greed and the pursuit of profit for the widespread misconduct in the banking and financial services industries.

The Commonwealth Bank, ANZ, National Australia Bank and Westpac have all pledged to mitigate their failures.

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Matt Comyn, CEO of the Commonwealth Bank during a public hearing at Parliament House in Canberra. Picture: Gary Ramage

COMMBANK CEO ADMITS BANK’S FAILURES, GREED

Commonwealth Bank CEO Matt Comyn conceded the bank was too slow to fix customer service problems uncovered by the banking royal commission because it had become complacent.

“There have unfortunately been failures of judgment, failures of process, failures of leadership, and in some instances, greed,” Mr Comyn told the committee inquiry.

“We became complacent.”

Commonwealth Bank spent too long investing in making things right with customers who had experienced issues, without grappling enough with the deeper issue of why things went wrong.

“We have been too slow to get to the root cause,” he said.

Mr Comyn laid out the steps the bank has taken, including strengthening its lending processes and making it simpler for customers to choose products.

But he expects Australians will be sceptical and the bank has plenty of work to do to regain trust.

Deputy Chief Executive Officer David Cohen with the CEO of the Commonwealth Bank Matt Comyn, during a public hearing at Parliament House in Canberra. Picture Gary Ramage

“I accept that, and understand that, you will judge me and the Commonwealth Bank on our actions,” he said.

He told the hearing the bank will be implementing the Future of Financial Advice reform as it was “originally designed in full”.

He assured CBA will go back “as far as practical” when it comes to compensating customers.

The bank has spent $850 million on customer remediation, administration costs and improving its advice services.

Mr Comyn was also asked by Liberal MP and chair Tim Wilson about his remuneration.

He responded that only 30 per cent of his salary was linked to financial performance, almost half of what it has been in the past.

Mr Wilson also quizzed Mr Comyn about how CBA executives are being held accountable.

Mr Comyn said the board will receive monthly updates on misconduct. He was later asked whether anyone was fired as a result of the royal commission.

Mr Comyn told the hearing 41 employees had been sacked from the bank this year, and another nine had resigned amid investigations.

Labor’s Matt Keogh also asked CBA about it’s announcement that it will stop charging dead people.

“Do you really need the royal commission to tell you that?”

WESTPAC CHIEF HASN’T MET ANY VICTIMS

Westpac’s Brian Hartzer said he had spent half a day revisiting the bank’s culture and mission statement.

He was grilled about his previous comment that a royal commission into banking was not needed.

Westpac CEO Brian Hartzer speaking at the bank's half-year results in Sydney. Picture: Hollie Adams/The Australian

He told Labor MP Mr Thistlethwaite the inquiry had been a “valuable process.”

When asked how many victims he had met with personally, he responded by saying he met with customers “all the time.”

He admitted he had not met with any victims who made submissions to the royal commissions but he did watch videos of them give evidence.

Mr Hartzer was asked about a customer who walked into the Bank of Melbourne to increase their mortgage repayment and then walked away with a credit card with a $90,000 limit.

He said he did not know about the case but said cases like it should not happen.

Liberal MP Trevor Evans asked him how many people worked on complaints handling at Westpac - he said well over 100, possibly a couple of hundreds.

Westpac CEO Brian Hartzer will also face the committee. Picture: Hollie Adams/The Australian

The economics committee chair, Mr Wilson says the hearings are an important opportunity to scrutinise the chief executives.

He said it’s important to ensure the “appalling behaviour” revealed at the royal commission is not repeated, without inhibiting the contribution of the banks to the economy.

“This misconduct has either gone unpunished, or the consequences have not met the seriousness of what has occurred and must be addressed,” he said.

The hearings come after the Australian Banking Association on Wednesday revealed a new industry code aiming at clamping down on poor behaviour. It requires banks to stop charging dead people and to ensure they only extract fees from customers in exchange for services actually provided. The voluntary charter comes into force on July 1 next year.