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CBA chief Comyn entangled in Aussie’s dramas
The Australian 12:00am March 19, 2018
Richard Gluyas
Commonwealth Bank’s hopes for a smooth leadership transition to Matt Comyn could be disrupted by the revelation that its incoming chief executive is CBA’s shareholder representative on the Aussie Home Loans board.
The news comes after a torrid week for Aussie in the financial services royal commission, which heard on Friday that the mortgage broker had failed an internal risk audit as recently as last December, and that a responsible lending policy had only been introduced two weeks ago.
Aussie failed to report to police four brokers who were eventually convicted, did not inform customers that their broker had been sacked for misconduct, and still lacked a team dedicated to tracking down fraud.
The internal risk assessment concluded: “Our findings stress the need for the group to strengthen its oversight of (Aussie) ... in short, (Aussie’s) risk culture needs to lift.”
CBA declined to comment yesterday on Mr Comyn’s involvement in Aussie.
However, it’s understood he will relinquish his role as a non-executive director when he becomes CBA chief executive on April 9.
Also, the bank’s ability to exert full control over the nation’s biggest mortgage broker was limited until last August, when Aussie founder John Symond sold his remaining 20 per cent stake.
In anticipation of a further week of bad news, Mr Comyn penned an email to retail banking staff on Friday afternoon, warning there would be cases examined where customers had been treated unfairly.
“In many cases, our actions have had a significant impact on the financial and emotional wellbeing of our customers. This is unacceptable,” Mr Comyn said.
“Where we have made mistakes we must and will take responsibility for them, we will make things right for our customers, and not repeat the same mistakes.
“We will exceed our regulatory and compliance obligations, and enhance the financial wellbeing of every single customer we serve.
“Together, we will make our bank better, and one we can all continue to be proud of.”
Still Mr Comyn’s role on the Aussie board could embroil him in further controversy after his retail banking division rolled out a network of misfiring intelligent deposit machines in 2012.
The IDMs, which were used by criminals to launder dirty cash, lie at the heart of Austrac’s sensational money-laundering allegations against CBA.
The financial intelligence agency took action against the bank in the Federal Court in August last year, alleging it had engaged in “serious and systemic noncompliance” with anti-money laundering and counter-terrorism financing laws.
The seriousness of the Austrac allegations, and Mr Comyn’s position as head of the retail bank, led to many calls for the appointment of an external successor to the current chief executive Ian Narev.
However, on January 29, CBA chair Catherine Livingstone anointed the 42 year-old Mr Comyn, saying he was best-placed to maintain the momentum of the business while making the necessary changes.
In the final week of hearings on consumer lending, beginning today, CBA will again feature in relation to add-on credit insurance for home loans, personal loans and credit cards.
It will also be targeted for unsuitable overdraft facilities and failure of automated systems.
The commission will hear from a CBA victim Irene Savidis.
In his note to staff, Mr Comyn expressed regret that CBA’s initial submissions had not met the commission’s expectations, with Aussie failing to complete, as requested, a separate, 50-page document outlining its misconduct. Instead, the CBA submission covered Aussie in eight paragraphs, and there were no misconduct admissions. “We will work to make sure this doesn’t happen again,” Mr Comyn said.