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Australia's Commonwealth Bank CEO says incentives played a part in bad culture
[SYDNEY] Incentives for the staff of No 1 Australian lender Commonwealth Bank of Australia had played a part in its unacceptable treatment of customers, the company's chief executive officer told Parliament on Thursday.
CBA boss Matt Comyn made the admission in the first questioning of a bank boss since a misconduct inquiry into the finance sector began airing accusations earlier this year of product misselling, fees for services not provided and fees taken from dead client accounts .
Australian bank bosses are required to face regular public questioning by the country's Parliament but Mr Comyn was the first to testify since the inquiry, called a Royal Commission, began hearings in February.
"Incentives have played a role in some of the issues that we are facing now, it's very hard to conclude otherwise," Mr Comyn said in Parliament.
However, he said that since July the bank has started cutting back incentives, ranging from those available to staff in branches to himself. In all, the bank has cut A$100 million (S$97.6 million) a year of incentives, he said.
"There may still be more work to do but there has been substantial reform to the way all staff inside our bank are paid," he said.
Asked why it had taken the Royal Commission to make the bank repair its culture, Mr Comyn said "I don't think there's an acceptable explanation... other than to say we have been too slow to get to the root cause (and) we haven't fixed the issues".
"We've worked a lot on improving the overall customer satisfaction, but we... haven't put enough time, effort and resource into making sure that we're fixing some of the causes that would lead to the most dissatisfied customer event," he added.
Most major Australian banks and the country's centre-right government, a traditional ally of the sector, had long opposed holding a royal commission. On Thursday, Mr Comyn said CBA now acknowledges it was wrong to oppose the inquiry.
Mr Comyn's Parliamentary questioning continues.