- Inside CBA CEO Matt Comyn's parliamentary confession
- By Chanticleer
- Contributed by: Greg ( 6 articles in 2018 )
From the moment he began to speak before the House of Representatives' standing committee on economics, Matthew Peter Comyn was in full mea culpa [my fault] mode.
Anything the chief executive of Commonwealth Bank of Australia could apologise for, he did.
The bank's misconduct. Its failure to promptly remediate customers. Its culture. Its remuneration structure. The way its board operated.
If he'd been asked to apologise for the sinking of the Titanic, the death of Phar Lap and Greg Chappell's decision to force his brother Trevor to deliver that famous underarm ball in 1981, he probably would have.
MPs had their chance to do their best impressions of Commissioner Kenneth Hayne or Rowena Orr, QC.
That's not to downplay the importance of Comyn fronting the Parliament and acknowledging CBA's role in a decade of misconduct that has shattered the trust of the community.
Comyn was the first big bank chief executive to speak publicly since Commissioner Kenneth Hayne delivered his searing interim report, in which he said the banks had collectively mistreated their customers, having been systematically blinded by greed.
So as a nation, we needed to hear Comyn admit there had been "failures of judgment, failures of process, failures of leadership and in some instances, greed".
Australians needed to hear Comyn say the bank had become complacent, blinded in part by its success and huge profits.
It needed to be put on the public record that the bank had underinvested in compliance, and that it had failed to act as promptly as it should have to fix problems and remediate customers affected.
How does Matt Comyn practically balance fixing the systemic and cultural problems in the bank and run the country's largest financial institution?
And it was, perhaps, most important of all to see Comyn concede he understood the scepticism with which his admissions, apologies and commitments to put things right will be met.
After all, it was Comyn who provided the most accurate answer to the committee's central question: Did CBA, its board and its management, really need a royal commission to force change?
"I don't think there's an acceptable explanation I can provide," he said.
And that, of course, is the big problem Comyn and his fellow Big Four chief executives face.
There is very little they can say to explain their behaviour, and not all that much they can say about how these issues will be fixed.
CBA's good steps?
Comyn, who was clearly and quite rightly, very well prepared and rehearsed, worked to sprinkle a few examples of what CBA is doing to fix things, including its independently audited response to the banking regulator's report into its culture, its decision (this week) to rebate grandfathered commissions, change remuneration processes and push to extend the government's Banking Executive Accountability Regime (known lovingly in the sector as The BEAR).
Comyn also pointed to the $850 million that had been "invested" on customer remediation in its wealth business, although Labor's Matt Keough questioned the use of this term, suggesting, rightly, that "remediation can be in no way an investment".
Comyn explained about $400 million had been spent on the administration of the customer remediation program, which adds evidence to the belief that the costs of these efforts will be very large.
These are all good steps, but as Comyn acknowledged, many of these measures are in their infancy. It will be years until we know their effectiveness.
In the meantime, Comyn can expect to make more than a few trips to Canberra to a light grilling at the hands of the nation's politicians.
MP's Orr moment
The MPs – whose excitement at the chance to do their best impression of Commissioner Hayne or Rowena Orr, QC, was probably inverse to Comyn's excitement at his moment on the national stage – tried hard to find some gotcha moments.
Labor's Matt Thistlethwaite probed on how the bank had investigated the tampering of accounts for young savers, trying valiantly to trace it back to Comyn's involvement – or lack thereof – in the investigation of this. It was mildly interesting, and perhaps illustrative of CBA's culture, but it was literally a nickel and dime issue, given the amounts involved.
Keough also tried to suggest CBA had tried to be tricky with the royal commission when it was first asked to provide information on examples of misconduct. It was an easy, but very minor, bit of point scoring. Surely there are bigger issues stemming from the royal commission than its administration?
The Liberal Party's Jason Falinski – who opened his questions by disclosing the CBA had repossessed his family's home when his parent's business collapsed – asked some interesting but very muddled questions on the lack of bank competition, particularly in the small business segment, where CBA's market share has decreased, and it has withdrawn from risky areas of the market such as factoring and invoice financing.
Falinski seemed to be suggesting CBA should feel bad about withdrawing from parts of this market, suggesting the factoring market – where interest rates can be as high as 40 per cent – should have been attractive to the bank.
Comyn correctly said there were some areas the bank did not want to play in, and it was not comfortable in segments where rates were that high.
Labor's Clare O'Neil made a poignant and important point about the personal trauma experienced by those who had been mistreated by the banks.
Comyn said he would "certainly acknowledge the hurt and the very difficult circumstances some of our customers" face but admitted to O'Neil he had seen less than 10 customers face-to-face.
O'Neil urged Comyn to get out and see more customers, and then named three or four customers who she felt had been badly treated; the format, of course, didn't allow for any of those case studies to be interrogated in detail.
It was a neat bit of point scoring, but also neatly illustrative of Comyn's dilemma.
How does he practically balance fixing the systemic and cultural problems in the bank, and do the hard work of meeting individual customers, and actually run Australia's biggest financial institution such that it delivers outcomes for customers, shareholders and the community?
If ever evidence was needed as to why it will take generations to rebuild trust in the banks, this is it.