Terry McCrann: New Commonwealth Bank chief Matt Comyn’s first day in the job likely to be his best
NEW Commonwealth Bank CEO Matt Comyn struck the right note with his apology, but the bad news is, it’s likely to be his easiest day in the job, writes Terry McCrann.
Terry McCrann
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NEW Commonwealth Bank CEO Matt Comyn has struck exactly the right note with his combination of the ‘we done wrong’ apology and a robust statement of how the CBA got much more right for customers.
What was particularly effective was his stress on the way the ‘wrongdoers/wrongdoing’ let down all the others — again, the overwhelming majority of — CBA staff, as well as customers. The ‘bad stuff’ was all just as much an exercise in bad banking as bad behaviour.
Unfortunately, good and important and even potentially effective as the message was, it was also the easiest thing Comyn is ever going to have to do as CEO.
To explain: it’s not quite the same for Comyn (or indeed, necessarily for any new CEO) that their subsequent career trajectory will always also follow that of ‘successful’ politicians.
For pollies, decidedly, non-gender specific, who reach either the nation’s or a state’s top job — either by winning an election or what these days seems to be the more normal route, toppling the incumbent — it is, it always is, inevitably and irresistibly all downhill from that moment of triumph.
It’s also become the case that such said — by then — ex-pollie now gets to ‘live on’ as a commentator or (snappy) host on Sky News. But I digress.
As I was saying, it’s not quite the same inevitability for Comyn: that yesterday he was finally on top of the mountain he’s been climbing relentlessly for more than 20 years, and from such a peak there’s only one way to go.
But staying there effectively and successfully is going to be tough. This is not a great time to become CEO of a major bank, even a lilywhite spotless bank (if there’s such a beast, I suggest not?).
Putting aside the ‘regulatory issues’, these are extremely challenging operational and strategic times for banks and especially our Big Four.
The Big Four have been riding one big wave — very ‘easy’ (easy to do and with very low default rates) residential property lending. It’s enabled them not to have to rely on the much more problematic lending to business that most of the other banks in most of the rest of the world have to do to try to make money.
They’ve also been riding a smaller wave — the explosion in the wealth and investment management business courtesy of the $2 trillion-plus superannuation pot which was Treasurer Paul Keating’s great ‘gift to the nation’.
Both of those waves are now receding — receding very fast for the banks in the case of the latter. And they are doing so just as the digital disruption — which up until now has been great for bank profits, and especially for the CBA — is building into a bank profit-wreaking tsunami.
Then add on those ‘regulatory issues’: for all banks, a trio of regulators (Austrac, APRA. ACCC) getting suddenly all hairy-chested plus a once-in-a-three quarter century Royal Commission, that has most definitely not been set in motion to do the banks a favour. This means that for starters Comyn has to structure a similar ‘two-level’ intersection with the regulators and the RC: ‘fessing up to wrongdoing but also robustly arguing the CBA ‘we done right’ story.
Austrac and those 50,000-plus (and indeed, plus again) breaches is both the first big cab off the Comyn-CBA rank and an exact profile of the challenge.
The overwhelming majority of the breaches — all but a couple of hundred and of that ‘couple of hundred’ only perhaps a dozen or two of serious money-laundering or terrorism funding failures — are the reporting stuff-up with the ‘intelligent’ ATM deposits.
WHY CBA'S OPTIONS WERE LIMITED
As I’ve written from the start CBA is done for all money on these breaches. It should cost it — in my judgment — around $500 million. But it’s also fixed the problem; absent a system meltdown these breaches won’t happen again.
It’s the other Austrac stuff that needs to be the focus — both now by CEO Comyn and the regulators. He needs to be open and tough: confessing and fighting as both the facts and the CBA best-interest require.
Then there are the — now two — class actions. They are not life-threatening but they will have to be dealt with. Again, the best mix is concession and robust rejection.
Add it all up and he can’t do what so appeals to new CEOs: draw a line under the past and write off as much bad news as you can, so that at least for a while you can actually appear to be going uphill from the supposed peak.
Sorry Matt, but the odds are that yesterday was the best day in the rest of your working life.
CRICKET FACES THE MONEY SHOT
CRICKET Australia would arguably be well advised to grab the money from Ten and Nine and run.
Our colleague Darren Davidson at The Australian reports that the two networks have offered $900 million for the cricket broadcast rights.
CA had previously ‘seen off’ Nine which currently has — most of the — broadcast rights (not the Big Bash) and didn’t rush to embrace Foxtel’s offer for the pay-TV rights, which Foxtel then withdrew.
All the major sports have operated on the expectation that the money they get from broadcasters should just keep rising relentlessly.
This has been helped by the explosion in new access points — from the old world of ‘just’ free-to-air TV, the arrival of Foxtel pay-TV, and now mobile and fixed broadband streaming.
Everybody has to adjust to these new realities, especially in the new world of the NBN and 5G mobile.
There’s scope for getting more money from a wider range of players. But there’s also the risk of undermining the core broadcast values and the critical role played by Foxtel.
How the NBN has delivered just in time
The NBN has delivered, and it has done so in what can only be described as the ultimate — the hit-the-ground running immediate — stress test, rites Terry McCrann.
Sydney airport the wrong place at the wrong time
Sydney Airport has some of the sweetest acreage in Australia but when passengers numbers have dwindled from 9 million in the March quarter to 400,000 in the June quarter, that doesn’t count for much, writes Terry McCrann.