John Dagge Herald Sun September 29, 2012
THE Commonwealth Bank and National Australia Bank have been forced to reclassify almost $13 billion in home and business loans after making an embarrassing reporting blunder.
The errors, declared to the Australian Prudential Regulation Authority, involved the pair incorrectly classifying household loans as business loans.
CBA accounted for the bulk, incorrectly labelling $9 billion of loans made to households as business lending in the 14 months to July.
It has also reclassified up to $1 billion in deposits that were listed as belonging to households. The funds are now classed as deposits from businesses.
NAB has also run foul of APRA's rules, classifying $3.9 billion of business lending to 5000 customers as household lending in the two years to August.
The bank has now reduced its personal lending book by $2.8 billion, household lending by $700 million and revolving credit by $300 million.
The errors were discovered during reviews by both banks and reported in yesterday's monthly banking data drop by APRA.
The revisions follow a $28.8 billion housing-loan book error announced by Westpac in January.
Australia's second largest bank recorded loans belonging to owner-occupiers when they had been used for investment purposes.
APRA requires the market be informed about revisions of $100 million or more that amount to at least 10 per cent of values previously published.
Commonwealth Bank spokesman Bryan Fitzgerald said the bank had not made a mistake, but rather found itself "out of line" with standard industry reporting.
"There is no impact to the bank's bottom line as the loans did not change."
A NAB spokeswoman said the reclassification did not change the risk profile of the bank's lending book.
"If they were making big revisions to their audited statements it would be more worrying."