Australian bank CEOs tell of struggle to rebuild trust as complaints pour in
* First two bank CEOs to face parliament since Royal
* CBA expects to stop automatic fees in 10 days
* Banks inundated with complaints since inquiry began
(Adds comments from Westpac's CEO)
By Byron Kaye and Paulina Duran
SYDNEY, March 8 (Reuters) - Commonwealth Bank of Australia
, the country's biggest lender, said on Friday it will
stop automatically charging customers ongoing service fees in 10
days, admitting it had not yet been able to comply with a
regulatory order to do so.
Speaking at a regular parliamentary appearance, the CEOs of
CBA and Westpac Banking Corp also reported their banks
had received hundreds of new customer complaints in recent
Their comments suggest Australia's lenders are struggling to
regain trust from customers and end a practice known as "fees
for no service" which featured prominently among several
institutions at the year-long inquiry.
Matt Comyn, CBA's chief executive officer, said the bank was
overhauling its wealth management business so that customers
were only charged a fee at the time they received a service,
rather than automatically.
"Approximately 97 percent of those fees have been switched
off," he said, referring to charges that were billed
automatically. He added that 100 percent of the fees would be
switched off within 10 days.
The Australian Securities and Investment Commission told
CBA's wealth management subsidiary last month to stop
automatically taking fees because it had failed to comply with a
court order to fix wrongly levied charges.
Australian bank bosses must face regular questioning in
parliament. Comyn was the first to appear since the Royal
Commission inquiry delivered its final report last month with 76
recommendations for changes to finance sector rules.
Shares of Australia's biggest banks have risen since the
report was published on Feb. 4 amid relief that the inquiry's
recommendations left their market dominance largely unchecked,
although they are still off their pre-inquiry peaks.
Comyn dismissed suggestions the report had been soft on the
banks, saying it had been an "extremely difficult and
confronting process." However, when pressed, he said he had been
concerned the commission would recommend tougher lending laws.
CBA had spent A$1.4 billion ($983 million) in remediation
costs including administrative costs and compensating customers
for wrongdoing, the highest in its history, he said.
The bank had also been hit with about 5,500 new complaints
since the inquiry started, forcing it to hire dozens of extra
staff to take on the workload.
Appearing after Comyn, Westpac executives told lawmakers the
banking ombudsman had a backlog of about 800 customer complaint
cases related to Westpac.
The inquiry was a "very, very difficult experience," Westpac
Chief Executive Officer Brian Hartzer said.
"I think the recommendations in the end were sensible and
balanced and so in that sense I guess I had a positive reaction
to that," he said.
($1 = 1.4247 Australian dollars)
(Reporting by Byron Kaye and Paulina Duran in SYDNEY and Ambar
Warrick in BENGALURU; Editing by Stephen Coates)
First Published: 2019-03-08 02:59:12
Updated 2019-03-08 07:18:48
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