CBA boss says heads will roll over financial planning scandal, but it won’t be his

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Updated

February 06, 2019 19:56:38

Matt Comyn has failed in his first big test to show that the Commonwealth Bank is cleaning up its act, in what he says is an “unacceptable failure” on the part of some bank staff.

Key points:

  • CBA failed to satisfy ASIC it had fixed fee-for-no-service financial planning problems despite having a year to do so
  • ASIC banned CBA from charging financial planning customers or taking on new clients until appropriate controls are put in place
  • Some CBA staff involved in the project’s failure have been stood down and CEO Matt Comyn said “heads will roll”

The bank failed to convince the regulator it had stopped charging fees for no service and Mr Comyn has indicated that heads may roll — but not his.

“Ultimately I am accountable for everything that happens inside the Commonwealth Bank but, for those people leading that project, clearly we haven’t delivered what we should have been and we will be doing a review and a number of those people have been stood down and there will be consequences that will flow from that,” Mr Comyn told The Business.

“In my mind it is a completely unacceptable failure … this is an area where there is absolutely no room for error.”

In a major embarrassment for the CEO, the bank failed to prove to ASIC it had adequate controls to stop clients being charged fees for no service and it promptly banned the bank from charging any more fees or taking on new clients until further notice.

Fees for no service was one of the biggest scandals to come out of the royal commission, and the Commonwealth Bank has had almost a year to improve its systems.

Deadline missed

The Commonwealth Bank was supposed to submit a report to ASIC on January 31 — prepared by its independent expert Ernst & Young — on whether it had taken “reasonable steps” to remediate overcharged customers.

However, it missed that deadline because the independent report raised concerns the measures taken fell short, and there was too great a risk of human error.

“Whilst there was progress … we wrote to the regulator informing them that we had failed, that doesn’t make it any better, that is the clear truth it is an unacceptable failure,” Mr Comyn said.

It is a significant black mark against the record of a CEO who told The Business last year that he would be personally accountable for cleaning up the bank.

“I expect to be judged on the actions that I implement,” he told the program in May following the release of the damning APRA report into the bank.

Those whose jobs are now on the line should not be surprised they are facing the chop.

“Consequences take multiple forms — one of those is financial and the ultimate is a loss of employment both my role and many others,” Mr Comyn warned.

Topics:

business-economics-and-finance,

company-news,

consumer-protection,

banking,

royal-commissions,

australia

First posted

February 06, 2019 19:05:30



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