Error
  • JUser: :_load: Unable to load user with ID: 46
Menu
Cuzz Media

Cuzz Media

Cuzz Media is part of t...

NAB VICTIM

NAB VICTIM

In late 2008 we became vi...

Banking In Australia Today

Banking In Australia Today

Visit Banking in Austra...

Donate Please

Donate Please

We need your support. ...

Prev Next

Bankwest says the financial crisis is to blame, not the bank

Cara Waters    Smart Company    13 August 2012

Bankwest has denied allegations that it unfairly called in millions of dollars' worth of commercial loans in the aftermath of the global financial crisis and has denied the bank was at fault.

The bank came under fire on Friday at a Senate inquiry and agreed to investigate claims it retained the tax benefits of newly developed properties that were forcibly sold when the bank reviewed its lending portfolio after it was bought by the Commonwealth Bank.

Nationals Senator John Williams told the inquiry he had received advice Bankwest had retained the GST components of a number of mortgages which covered new residential property developments that had been placed in receivership.

"I've received advice that this has been done right through your network; that you have held on to the GST collections," he said.

"I want you to see if this had happened; it should go to the Australian Tax Office. I think that it's very unAustralian."

Senator Williams said one case between Bankwest and an aggrieved customer had already been examined by a former judge.

Bankwest chief executive Rob De Luca told the hearing claims Bankwest called in loans to obtain a better price for the Commonwealth Bank were "simply not correct".

"The sale agreement did not influence the way in which Bankwest dealt with its customers."

De Luca also said claims made at the inquiry that valuations were "systematically decreased" were also incorrect. "It makes no sense that valuations or sales prices would be purposely lowered.

"These assets are relied on to meet the bank's debt and selling these assets for a lower price would often result in a greater loss for the bank." De Luca denied claims that Bankwest dealt with customers on a global basis.

"The bank worked with customers individually through any financial difficulty they were experiencing," he said.

"The Bankwest sale period coincided with the worst global economic downturn in 80 years.

"Unfortunately, some of our customers were in industries and sectors that were the most impacted."

De Luca told the Senate inquiry the majority of Bankwest customers who made submissions to the inquiry related to property investment and development transactions.

He said most of the customers' transactions were entered into between 2005 and 2007 and then encountered problems between 2008 and 2010.

"Their situation mirrors the broader property investment and development environment that went through an increase in activity, followed by a contraction in the cycle during those periods," De Luca said.

"It is important to note that during this period insolvencies for Bankwest customers have been in line with our overall market share." De Luca acknowledged that the situation of Bankwest customers who had lodged submissions with the inquiry was "unfortunate".

"Unfortunately, as we know, sometimes difficulties do arise, and it is in the bank's interests to assist customers if that occurs," he said.

"We maintain that the cause of the difficulties arose from a combination of economic factors, not through any inappropriate actions of the bank."

Geoff Shannon, leader of the lobby group Unhappy Banking, told SmartCompany that Bankwest was unable to answer many fundamental questions raised at the inquiry.

"[Bankwest] got hammered on GST, penalty interest and collusion allegations between banks and valuers. They could not answer whether there was a variation to the sharesale agreeement," Shannon said.

"They are just not in the real world."

Shannon said Bankwest should tender the share sale agreement in order to support its claim that the sale agreement did not influence the way in which Bankwest dealt with its customers.

"They need to prove that by tendering the share sale agreement that is the only way that issue is going to be resolved, they could not answer whether there was a variation or not," Shannon says.

Law firm Slater & Gordon is watching the inquiry closely to see if grounds are established for a class action against Bankwest.

Van Moulis, practice group leader at Slater & Gordon, told SmartCompany the law firm would await the outcome of the Senate inquiry as there were likely to be findings to assist a class action.

Moulis supports Shannon's call for the tendering of the share sale agreement.

"Bankwest said Shannon had misconstrued the contents of the contract but obviously if a copy could be produced we could all make up our minds to its significance," he says.

Last modified onTuesday, 28 May 2013 05:59

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

back to top

News

Major Topics

Helpful Resources

Socialize

About Us