Commonwealth Bank checking for ‘further consequences’ from wealth scandals

CBA is checking for “further consequences” from the Hayne inquiry, after paying out $1.4bn for wronged customers.

Matt Comyn appears before the parliamentary committee. Pic: 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.

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 last five years, which Mr Comyn said would be a cost ultimately borne by shareholders.

Appearing before the House of Representatives economics committee in Canberra today, Mr Comyn said the bank had looked at each of the individual cases before the financial services royal commission to see whether the conduct could have applied to CBA.

Mr Comyn said management was examining whether the conduct in the financial advice and wealth management business was “at the appropriate levels of accountability” for historical behaviour.

Liberal MP Tim Wilson, the chair of the committee, asked Mr Comyn whether there were “any nervous executives or anyone else in the CBA” after Commissioner Kenneth Hayne referred several potential legal actions to the Australian Securities and Investment Commission 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”.

He said the bank’s wealth management business had been overhauled after the fees-for-no-service scandal. “We no longer provide services on an ongoing basis. The whole administration (has been changed) so that a customer only pays for that service that occurs at the time,” Mr Comyn said.

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

He said there were a number of customer remediations which still required refunds to be paid to customers.

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

“We expect to be judged on our actions, not words.”

Mr Comyn admitted CBA’s management of non-financial risk was “simply not good enough”.

But he said that dealing with jilted customers since coming to the top job had enhanced his role as chief executive.

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.

“Harm can be done when financial institutions get it wrong - we can and we did miss the worst experiences of our customers,” he said.

Mr Comyn said CBA was taking steps towards implementing all of Mr Hayne’s recommendations.

“Many of the recommendations require direct changes to our business and are already underway,” he said. “Some of the recommendations will require action by government, regulators and industry bodies before we can implement them. We will support this work and take steps where we can, so that once the regulatory framework is in place, we are ready to act.”

“We are implementing the royal commission recommendations transparently, and will issue regular updates on our progress.”

Westpac chief Brian Hartzer is due to appear before committee later today.