CBA, Westpac reveal about $1b in compensation paid out so far


CBA chief executive Matt Comyn said his institution would eventually pay out $2.2 billion for problems going back to 2014. Already $600 million had been paid to customers, with another $600 million covering costs. Another $900 million was likely to be paid in compensation, with the bank employing more than 500 staff whose job was to deal with remediation issues.

Mr Comyn told the committee once it had paid out all the money it had set aside for compensation, it would have made payments to about 600,000 people.

Labor MP Andrew Leigh commented: “That’s a strikingly large share of the Australian population who have received some form of compensation payment for a mistake by your bank.”

Mr Comyn replied: “We are fortunate to serve 15 million customers and I accept the premise of that question, which is, none of that should have been necessary, and of course we want to work through those refunds as quickly as possible and make sure that it doesn’t re-occur.”

Outside the cost of paying back customers affected by the bank’s actions over recent years, Mr Comyn said it was responding to other issues by removing fees and providing “smart alerts and notifications” to help avoid fees and charges.

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Westpac managing director Brian Hartzer said there had been a lot of “soul searching” within his institution over the royal commission, adding he was “dismayed” by what had gone wrong.

The bank had paid $300 million in remediation to about 580,000 customers, with another half a million people likely to be compensated for the bank’s failings.

Total remediation would amount to $1.1 billion after tax.

Westpac plans to spend $800 million in the 2020 financial year to deal with regulatory and risk-related changes,  which was half of Westpac’s total investment budget.

Mr Hartzer said while there would always be some errors in an institution as large as Westpac, the aim was to keep them as low as possible.

“We have made a substantial investment in a new complaints system which will enhance our ability to manage complaints and identify root causes,” he said.

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