CBA boss 'shocked' by planner scandal
Facing questions over the bank's failure to act on serious transgressions by planners that came to light in 2008, Mr Turner made his strongest comments yet on the scandal.
"What we did was shocking," he said at the bank's annual meeting on Friday.
"There's no excuse for giving bad advice, absolutely no excuse. We had the wrong people giving the advice and the business was structured wrongly, and remunerated wrongly, and the culture was wrong."
A BusinessDay investigation earlier this year exposed details of the scandal in CommBank's planning arm, including the alleged forging of signatures, the creation of unauthorised investment accounts and overcharging of fees.
Whistleblowers from the bank first contacted the Australian Securities and Investments Commission in 2008. One of the planners, Don Nguyen, was suspended for a month in the same year, but he was later promoted. In March 2011 Mr Nguyen was banned from working as a financial planner for seven years.
Mr Turner said the bank had been "slow" in acting on the information about the rogue planners, but said the board moved quickly once it knew of the scandal. "It was too slow in coming up through the organisation," he said.
"When we did find out about it and started to move with ASIC to investigate and take the action necessary to put it all right, we moved extremely fast," he said.
"In so far as the board is concerned we did all we possibly could, but I'm absolutely not denying that we got it wrong in the first place."
The bank has previously said it "deeply regrets" the poor advice that was provided by the staff and admitted there was a "sale-based" culture among some of its staff. Mr Turner said in the past three years this part of the bank had overhauled its pay structure, training and culture.
Mr Turner's comments came as the bank's board and management faced questions over legal complaints following its BankWest takeover of 2008, its environmental policies, and its preparedness for a housing meltdown.
But after a week in which the bank posted a 14 per cent lift in quarterly profit to $2.1 billion and its share price hit a new record high of $79.88, the protest vote was marginal. All resolutions passed easily.
It emerged this week that the bank will face a class action over allegations it unfairly terminated commercial loans after buying BankWest in 2008.
Critics say the bank had an incentive to see some of its customers default, but chief executive Ian Narev said it was "categorically wrong" to claim the bank put people into hardship for financial gain.
Mr Turner rejected a call for the bank to eliminate its exposure to the coal industry, and said the bank conducted tests to ensure it could handle an "Armageddon situation" in the economy.
Frequently Asked Questions about this Article…
The Commonwealth Bank financial planning scandal involved serious misconduct by rogue financial planners, including the forging of signatures, creation of unauthorized investment accounts, and overcharging of fees. The bank was criticized for being too slow to respond to these issues.
The Commonwealth Bank financial planning scandal involved serious misconduct by rogue financial planners, including the forging of signatures, creation of unauthorized investment accounts, and overcharging of fees. The bank was criticized for being too slow to respond to these issues.
The Commonwealth Bank chairman, David Turner, admitted that the bank was slow to act on the misconduct but stated that once the board was aware, they moved quickly with the Australian Securities and Investments Commission to investigate and rectify the situation.
The Commonwealth Bank chairman, David Turner, admitted that the bank was slow to act on the misconduct but stated that once the board was aware, they moved quickly with the Australian Securities and Investments Commission (ASIC) to investigate and address the issues.
Since the scandal, the Commonwealth Bank has overhauled its pay structure, training, and culture within its financial planning arm to prevent similar issues from occurring in the future.
Since the scandal, the Commonwealth Bank has overhauled its pay structure, training, and culture within its financial planning arm to prevent similar issues from occurring in the future.
Don Nguyen was one of the financial planners involved in the scandal. He was initially suspended for a month in 2008 but was later promoted. In 2011, he was banned from working as a financial planner for seven years.
Don Nguyen was one of the financial planners involved in the scandal. He was initially suspended for a month in 2008 but was later promoted. In 2011, he was banned from working as a financial planner for seven years.
The Commonwealth Bank faced legal complaints and a class action lawsuit over allegations of unfairly terminating commercial loans after acquiring BankWest in 2008. Despite these challenges, the bank reported a 14% increase in quarterly profit and a record high share price.
During the annual meeting, the bank's chairman acknowledged the mistakes made and expressed regret over the poor advice given by staff. Despite the scandal, all resolutions at the meeting passed easily, and the bank reported a 14% increase in quarterly profit.
Yes, the Commonwealth Bank faced questions regarding its environmental policies, particularly calls to eliminate its exposure to the coal industry, which the bank rejected.
Yes, the Commonwealth Bank is facing a class action lawsuit over allegations that it unfairly terminated commercial loans after acquiring BankWest in 2008.
Chairman David Turner acknowledged the bank's initial failures and expressed regret over the poor advice given by staff. He emphasized that the bank had taken steps to address the issues and improve its practices.
The Commonwealth Bank has faced criticism regarding its environmental policies, particularly its exposure to the coal industry. However, the chairman rejected calls to eliminate this exposure, stating that the bank conducts tests to ensure it can handle severe economic situations.
The scandal damaged the Commonwealth Bank's reputation, leading to increased scrutiny and legal challenges. However, the bank's financial performance remained strong, with a significant profit increase and high share prices.
Despite the scandal, the Commonwealth Bank posted a 14% increase in quarterly profit, reaching $2.1 billion, and its share price hit a record high of $79.88. This indicates that the financial performance has remained strong.
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