Australia Banking: Comyn Shafts Narev for the Greater Good

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Euromoney, November 21 2018

“Temper your sense of justice.”

That phrase, you can already feel, is entering the Australian vernacular as a shorthand for the complacency of the big banks.

It came to light in the latest hearings of the Royal Commission into Australian banking conduct, during the testimony of Matt Comyn, the new chief executive of Commonwealth Bank of Australia.

Comyn used his testimony to explain how he had, in his previous job as head of retail, lobbied then chief executive Ian Narev in 2015 and 2016 to stop selling some of the products that would later land the bank in enormous trouble with the regulators and the public.

Comyn said he repeatedly asked Narev to stop selling consumer credit insurance, such as credit card insurance and loan protection insurance. Comyn argued that they were not good products and made such a tiny contribution to profitability that they were not worth doing.

The mis-selling of these products – often to people who were ineligible to make a claim in any case – is one of the things that dragged the bank into the mire and ultimately cost Narev his job.

CBA finally announced it would stop selling consumer credit insurance earlier this year, just before Comyn became chief executive.

The key meeting took place on May 28, 2015, and Comyn kept notes, which he presented to the Royal Commission this week. Curiously, the relevant page begins with the words “Gary Kasparov”, apparently a reference to the Russian chess champion having appeared at a CBA dinner.

The notes continue through Comyn’s views about the weakness of the products, before ending with those words: “Temper your sense of justice.”

This is what Comyn says Narev told him to do in the meeting.

Rowena Orr QC asked Comyn how he felt about that remark.

“I suspect I was slightly irritated by it,” Comyn said.

The outcome of all of this testimony is likely to have some significance for CBA, and for Comyn’s role at the helm.

While he has thrown his former chief executive under the bus, he has also made himself look like something of an internal crusader for best practice who was ignored, and therefore the right man to get the place back on course.

It is useful to him to tell the market that he was thwarted in his attempts, but that he tried.

There is a lot more work to do to rebuilding public trust in CBA, and Australian banking generally. But depicting departed leaders as bad guys is not a bad tactic.

“Do you feel that CBA has had the right leaders in the past?” Orr asked.

“No,” Comyn said.

“Do you feel that they have the right leaders now?”

“We will see. I hope so.”

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Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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