Newcastle Herald By Clancy Yeates Wednesday August 14, 2013
Commonwealth Bank chief executive Ian Narev has responded for the first time to revelations that rogue financial planners within the bank engaged in serious misconduct five years ago.
Mr Narev said yesterday that a group of seven planners had let the bank down, and the lender now put a higher priority on enhancing customers' financial well-being than on making profits.
The bank's vision was to "secure and enhance the financial well-being" of customers, Mr Narev said, and "the moment we forget that, we put the institution in peril".
"It's not about profit, it's not about product, it's not about being the greatest company in the world," Mr Narev told a mortgage brokers conference in Sydney.
"What I told our team is that there were seven financial planners who let us down out of 50,000 people. It was five years ago and it's still a headline in the paper."
BusinessDay has previously reported the bank concealed financial improprieties by one of its top financial planners in the early days of the scandal.
The planner, Don Nguyen, controlled an estimated $300 million in investments on behalf of 1300 clients.
Nguyen joined the bank in 1999 and has since been banned from providing financial advice until 2018, allegedly forged signatures, created unauthorised investment accounts and overcharged fees.
Mr Narev said he had "some views on some aspects" of the media coverage of the episode but that was not the point, and he would not go into the specifics of the case.
"If you don't look after the financial well-being of customers, a) you've not just done the wrong thing by them, but b) it also harms the reputation of the institution," he said.
"We haven't and we'll never be perfect. We say where we do wrong we try and put it right, but the number one thing our people have to focus on is the interests of the customer."
He said there was "no sales result, no profit result, no award, no anything" which would excuse doing the wrong thing by customers.
Whistle-blowers from within the Commonwealth Bank alerted the Australian Securities and Investments Commission to the scandal in October 2008, but it took the corporate regulator 16 months to act on the information.
As a result of the scandal, ASIC's performance is now the subject of a Senate inquiry, which has the support of Labor, the Coalition and the Greens.