CBA drops small business products

THE Commonwealth Bank has dropped its small business debtor financing products, saying they pose too much risk for the bank.

THE Commonwealth Bank has dropped its small business debtor financing products, saying they pose too much risk for the bank.

Spokesman Steve Batten said the product had only attracted 400 customers nationally of the bank's 130,000 business clients.

"It is a really niche product and we felt there were other products that would offer a similar facility but with less risk,'' he said.

"We need to be able to provide products and services that are reliable and we need to constantly evaluate risk with regard to those products and services.''

He did not agree with suggestions that the bank's risk review was undertaken with a view to making the bank's profits less volatile.

"We undertake reviews of a number of our products and have to make sure it meets our risk appetite,'' he said.

Debtor financing allows businesses to sell their outstanding invoices to the bank at a discount, receiving ready cash and transferring the risk of non-payment to the bank.

The bank will instead promote its overdrafts, loans or trade facilities in the place of debtor financing, Mr Batten said.

The Commonwealth Bank reported a record preferred profit of $6.8 billion last week.