RESPONDING to the banking royal commission will cost Bendigo and Adelaide Bank millions of dollars and was effectively a fishing expedition, chairman Robert Johanson said in Bendigo on Wednesday.
Mr Johanson was also dubious about the lessons the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry could offer given the vagueness of requests to banks for information.
He said Bendigo and Adelaide Bank had received a letter from the commission on December 15 that asked it “to identify any misconduct which occurred since January 1, 2008”.
Commissioner Kenneth Hayne also asked the bank to provide details on instances when it believed it had fallen below community expectations.
“You can imagine us thinking, where do we start?” Mr Johanson told guests at the Australian Institute of Company Directors lunch.
“The royal commission has been given this very broad brief of looking into the industry and what has been going on.
“Misconduct, so framed, is a pretty broad idea.
“It certainly includes breaches of regulation where we sent the wrong statement to the wrong person.
“It covers all sorts of procedural and process issues as well as the big misselling stuff that is really at the heart of this whole matter.
“What we are now seeing is the commissioner trying to get to the heart of the nature
of what’s gone on.
“It is a massive brief that one commissioner has got to come to grips with.
“How he is going to see across the framework of the whole industry, come up with interesting, useful stuff in the context of all these other things going on, and deal with the political pressure that is there, I think, is going to be a fascinating exercise.”
Mr Johanson said the current public trust challenges banks faced could be sourced back to the practice of paying people according to the volume of products they sold.
“Guess what happens, people get a bonus and do they really care who they sell it to?” he said.
“So it is remuneration structures that have been the trigger that has lead to a lot of what is now complained about.
“We got rid of commission-based incentives for sales staff about 15 years ago because you could just see what the problems would be.”
Mr Johanson said he believed the royal commission would clarify the responsibility banks have in the
– Sharon Kemp