From Banking Day:
Compensation for “conduct” issues at Commonwealth Bank may reach A$100 million – more than ten times the level of compo already paid out.
Resolution of these and other industry reputations issues is so demanding of management time, it’s the principal work task of the bank’s chief executive and senior team.
David Turner, the bank’s chair, told the annual meeting in Perth the bank plans to have “refunds, plus interest, completed by mid-2017.”
Turner then dropped the bank’s veil on a long-shielded detail.
“It is a large number of refunds – valued at more then $100 million,” he said, adding that this was already provided for.
The most recent update on the bank’s Open Advice Review program, released a month ago, acknowledged “total compensation offered by the program since its commencement of $9.8 million.”
Narev did allude to a steep increase in costs before the House of Representatives’ Standing Committee on Economics a few days later. He said then: “Undoubtedly there will be more announcements on compensation owed to customers – some significant.”
Also significant, Narev informed the annual meeting, is the work time swallowed up this mitigating this years-old mess and the overlapping reform and reputation issues being considered at an industry level.
“These are projects on which my team spend most of their time,” Narev said.
The conduct issues were a major factor in shareholders’ decision to reject the bank’s remuneration report. Only 49.09 per cent of votes were cast in favour of the report.
But no royal commission needed!
