CBA total cleanout testament to Matt Comyn’s dedication to change

Commonwealth Bank CEO Matt Comyn. Picture: AAP

There is no greater measure of Matt Comyn’s determination to smash the corrosive culture in Commonwealth Bank than the total cleanout of the CBA executive leadership team he inherited from Ian Narev.

True, David Cohen is an exception, but even he has been reassigned from chief risk officer to deputy chief executive.

Comyn clearly sees his colleague as part of the solution rather than a contributor to the underlying problem.

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Adam Bennett will leave in January.

Business and private banking boss Adam Bennett, whose departure was announced on Wednesday, is in the same category.

However, by the time he leaves next January, 10 of the bank’s 12 group executives will be Comyn-era appointments, after Comyn himself was elevated to CEO in April last year from head of the retail bank.

Farewell to the era of Narev

There are two things to remember about the search for Narev’s successor.

The first is that the Catherine Livingstone-led board clearly felt that Comyn was the superior candidate to Ross McEwan, the main external contender and no slouch himself.

McEwan, who at the time was CEO of Royal Bank of Scotland, was subsequently picked up by National Australia Bank, which has also acknowledged a yawning gap between its public face and the kind of institution it aspires to be.

The second thing to remember is that the reservations about Comyn related to his position not only as an insider, but also as head of the retail division which hosted the disastrous rollout of CBA’s faulty intelligent deposit machines.

Commonwealth Bank chairman Catherine Livingstone (left) and CEO Matt Comyn (right). Picture: AAP

It was the bank’s poor response to the IDM fiasco that led to the $700m penalty imposed by Austrac.

Understandably, there were concerns that Comyn, in contrast to his assessment of Cohen, was part of the problem, and in no position to lead a cultural transformation.

While he’s only been in the job 18 months, events over the past two days suggest that CBA’s rebuild under Comyn is gaining some traction.

The cleanout of group executives from the Narev era is a largely symbolic milestone.

On Tuesday, though, CBA surprised investors with a strong first-quarter cash profit of $2.3bn, up 5 per cent excluding notable items.

As rival banks report volume constraints due to tighter regulation on lending, the nation’s biggest lender reported a 3.5 per cent increase in home lending, a 10.4 per cent gain in household deposits, and a 2.8 per cent rise in business lending compared to the June quarter.

CBA delivered a superior revenue performance, although it benefited from a full quarter of lower wholesale funding costs.

Margin pressure is also expected to be a feature of the half-year result in February due to a narrowing differential between pricing for existing and new loans — the so-called loyalty tax.

Despite this, and a natural reluctance to rely too much on a quarterly result, UBS analyst Jon Mott said it was a strong result and CBA was continuing to outperform its peers.

The other CBA executive departure, foreshadowed in this column late last month, was high-profile recruit Jason Yetton.

Jason Yetton. Picture: Hollie Adams

Yetton was hired in October last year to lead the intended demerger of the wealth management and mortgage broking businesses, NewCo.

Last March, however, CBA suspended preparations for the demerger to concentrate on customer remediation and implementation of recommendations from the Hayne royal commission.

Yetton’s exit is no surprise — he was performing a different role to the one envisaged when he was hired.

CBA said the exit from its aligned advice businesses was on track for completion by June next year.