Commonwealth Bank chief executive Ian Narev has hidden behind “competitive sensitivity” in order to refuse to tell a parliamentary committee how much money his institution makes on housing loans and credit cards.
Neither would he commit to appearing before the hearing again later this year if asked to, after Labor MPs made it clear they had more questions than the committee’s short timeframe of three hours allowed them to ask.
The first session of Malcolm Turnbull’s hearings into the banking sector did little to quell the appetite for a full-blown royal commission, keeping the issue alive much to the chagrin of the Prime Minister.
Mr Narev and his bank’s chief risk officer David Cohen appeared before the Standing Committee on Economics in the lower house on Tuesday afternoon – the only appearance required of the CBA during the three-day hearings in Canberra.
While Mr Narev insisted they had come in a spirit of openness, he refused to tell the committee how big his bank’s returns were on home loans and credit cards.
“We don’t disclose the returns on equity by individual products,” he said in response to questioning from Labor MP Pat Conroy.
“In highly competitive markets, you don’t want these individual aspects of product profitability disclosed to your competitors.”
Conceding only that home loans accounted for just over half of the bank’s balance sheet, the CEO offered little more.
When Mr Conroy persisted, committee chairman Liberal MP David Coleman stepped in to save the CEO, calling a tea break after saying the committee could determine later if it still required an answer to the question.
Mr Conroy, who offered to take a shorter break if it meant he could keep asking questions, described the proceeding as a “farce” because he was cut off.
Fellow Labor MP Matt Thistlethwaite grilled the bank largely on the CommInsure scandal – where the CBA’s insurance arm appears to have gone to extraordinarily questionable lengths to deny claims – and said he had two days’ worth of questions for the CBA.
But in trying to secure a commitment from Mr Narev to contribute to hearings again before Christmas, the CEO refused, saying only that it was a matter for the committee chair.
Mr Coleman said the committee would consider it.
Mr Turnbull wants the banking issue off his agenda and will not be overjoyed at the prospect of the economics committee reconvening with the banks beyond this week.
But even less desirable for the Prime Minister is a royal commission into the banks, which Labor is calling for.
The opposition renewed its push for a royal commission, citing the first session of the hearings as evidence that little ground will be covered by the parliamentary committee.
The idea, put up by Liberal MPs, of a banking tribunal was better received by the CBA boss, who said the industry would expect to have a role in funding the “one stop shop” for banking complaints.
But Labor insists a tribunal is just another way for the government and the banks to avoid a royal commission.
What the hearing did uncover was that no one in the CBA had lost a job over CommInsure’s unethical refusal to pay out on some life insurance policies or its rejection of insurance claims for some terminally ill customers.
Mr Narev apologised to victims of the scandal: “I’ve said before how sorry I am for the pain we’ve caused them. I say so again.”
He conceded more incidents of “poor customer outcomes” may be unearthed by investigations underway.
“There will undoubtedly be more announcements of compensation due to customers, which will include some significant monetary amounts.
“Critics will paint these as signs of ongoing problems. Actually they are signs of how serious we are about fairness.”
Mr Narev confirmed he earned more than $2.5 million in performance pay (total remuneration $12.3 million) but that it shouldn’t be regarded as bonus salary.
“This is performance-related remuneration.”
He also confirmed that former Liberal party director Brian Loughnane is consulting for the CBA.