Comyn reveals conduct review

CBA chief executive Matt Comyn has revealed the company is trawling back over past governance.

CBA chief Matt Comyn. Picture: Kym Smith.

Commonwealth Bank chief executive Matt Comyn has revealed the company is trawling back over the governance in its wealth management business to determine whether there will be “further consequences” for management over its fees-for-no-service scandal.

Appearing before the House of Representatives economics committee in Canberra yesterday, Mr Comyn also revealed the bank had shut off continuing fee arrangements for 97 per cent of its financial advisers as part of a whole-of-business move to end the practice within the next 10 days.

On the day the final report for Kenneth Hayne’s royal commission was handed down, the corporate regulator banned CBA’s financial planning arm from charging ongoing service fees until further notice after an independent review — part of an enforceable undertaking — found the business had inadequate systems in place to protect its customers from the fees-for-no-service disaster.

CBA, the nation’s largest bank, also revealed it had spent $1.4 billion on customer remediation programs, refunds and administration of those programs over the past five years, a cost Mr Comyn said would ultimately be borne by shareholders.

Mr Comyn said management was now examining whether the conduct in the financial advice and wealth management business was “at the appropriate levels of accountability” for historical behaviour. More than 70 CBA employees have been interviewed as part of the Australian Securities & Investments Commission “close and continuing monitoring” program, where regulators are embedded in the business. Mr Comyn said some of those interviews would likely have related to enforcement matters.

Liberal MP Tim Wilson, the chairman of the committee, asked Mr Comyn whether there were “any nervous executives or anyone else in the CBA” after Mr Hayne referred several potential legal actions to ASIC and the Australian Prudential Regulation Authority.

“We’re looking back at our management of that issue and whether … there was new information that came to light,” Mr Comyn said, noting that any information could “determine further consequences throughout the year”.

CBA deputy chief executive David Cohen said the bank had 990 matters before the Australian Financial Complaints Authority.

Mr Comyn said he had personally overseen 30 customer remediation cases stemming from the royal commission, and had tapped Mr Cohen to implement the recommendations from Mr Hayne’s inquiry.

He said there were customer remediations which still required refunds to be paid.

“The vast majority of those are very small in value,” he said.

Mr Comyn, who took over from Ian Narev in the wake of the bank’s money-laundering scandal, said he had written to eight million customers and had received 14,000 responses so far.

Appearing before the same committee yesterday, Westpac chief executive Brian Hartzer revealed the bank still had about 200 long-dated customer complaints being dealt with through AFCA, but that it had resolved more than 500 complaints since July last year. The bank has 800 open matters with AFCA in total.

Mr Hartzer said of the 76 recommendations made by Mr Hayne in his final report for the banking royal commission, 53 were up to the sector to implement.

Westpac had “already completed or are already implementing 25 of those”, he said.

Mr Hartzer said he was not aware of any “specific” referrals for legal action against Westpac by the royal commission.

“Commissioner Hayne’s final report was a sad indictment on the financial services industry,” he said. “While we can’t roll back the clock, what my management team and I can do is to get on with implementing the recommendations that have come out of the royal commission — to make sure that this experience is a profound turning point for Westpac.”