Happy is not a word either the head of the Commonwealth Bank or Westpac would use to describe their reaction to the final report of the financial services royal commission.
That’s despite claims by some commentators that commissioner Kenneth Hayne’s 76 recommendations were actually a win for the banks, letting them off lightly for the widespread misconduct he exposed.
Commonwealth Bank boss Matt Comyn and Westpac chief executive Brian Hartzer have dismissed the sentiment while being grilled by federal politicians about their bank’s responses to the landmark inquiry.
“It certainly hasn’t felt like that,” Mr Comyn told the House of Representatives economics committee in Canberra on Friday.
“It’s been an extremely difficult and confronting process, which has identified a number of failures and issues where we’ve badly let down our customers and our broader stakeholders.
“We’re very determined to fix that and to implement this substantial work.”
Mr Comyn said he believes the recommendations are “appropriate” but did not want to speak to why bank shares jumped after they were released.
“Obviously they are fundamentally driven by supply and demand.”
Asked whether he was happy with the inquiry’s final report, Westpac chief executive Brian Hartzer issued a resounding no.
“Happy is not a word that I would associate at all with the royal commission process,” he said.
“The recommendations in the end were sensible and balanced.”
Both bosses, who are the first bank CEOs to face the economics committee since the royal commission wrapped up, said their response to the inquiry is well under way.
Releasing a progress update, Mr Comyn said the Commonwealth Bank is trying to ensure it is ready to comply with recommendations that first require action by government, regulators and industry bodies.
Mr Hartzer said there are 53 recommendations that require action by Westpac, with 25 already complete or underway.
But he stressed the bank is committed to regularly reviewing its compliance, which could reveal problems not yet known about.
“We may still uncover more issues to fix, but we’re determined to make the changes that we need,” he said.
Mr Comyn said complaints about the Commonwealth Bank have spiked on the back of the royal commission, with 990 currently before the Australian Financial Complaints Authority.
Westpac said it has resolved 500 long-dated complaints since July, with about 200 remaining – most of which are before AFCA for review.
In the past financial year, CBA had spent about $1.4 billion on remediation, including refunds and administration.
Westpac spent $380 million, up from $169 million the previous year.
Neither boss is under any illusions, either, about how much work lay ahead of them to improve their processes and win back customer trust.
“I see that as an enormous amount of work that needs to get done,” Mr Comyn said.
ANZ and NAB executives are due to face the committee later in the month.
NAB chairman Ken Henry and chief executive Andrew Thorburn resigned after the bank was singled out as the worst of the big four.