By Byron Kaye and Paulina Duran
SYDNEY (Reuters) – No. 2 Australian lender Westpac Banking Corp <WBC.AX> said on Friday it had been “too slow” to resolve customer complaints and had created an executive role to handle them, as the country’s financial sector responds to revelations of serious misconduct.
Australia’s biggest money managers have seen their shares pounded by a barrage of damaging allegations since February, when a Royal Commission inquiry began exposing their abuse of market power and contempt of customers.
Among other flagrant abuses spanning the entire industry, the inquiry heard that Westpac had given a bonus to an employee for work he did with a retired couple who lost their home as a result of following his advice.
“It’s clear that in a number of instances we have been too slow in resolving genuine customer issues,” Westpac Group Chief Executive Officer Brian Hartzer said in a statement.
“This is not good enough. Customers have a right to expect fair, timely, and effective resolution if they believe they have a concern or complaint.”
The bank promoted its corporate affairs manager, Carolyn McCann, to a new role of “group executive, customer and corporate relations”, a move it said would ensure any customer issues “stay front and center” at the bank.
The inquiry switches focus next week from financial planning to banks’ treatment of small businesses.
SHAME ON YOU
No. 4 lender National Australia Bank Ltd <NAB.AX> also went on the publicity offensive, with CEO Andrew Thorburn telling CNBC the inquiry had made him “ashamed to be a banker”.
“I don’t know whether it is truly representative, I don’t believe it is, of what really happens at a bank, nevertheless it is true, we need to be accountable for that and we need to fix it,” Thorburn told the network.
NAB is expected to face questions about its market-leading business loan book when the inquiry resumes next week.
Executives have already told the inquiry NAB handed cash in envelopes to non-staff people for introducing home loan customers, a possible violation of responsible lending rules. [nL3N1R51ZN ]
“They’ve not only broken internal policies, they’ve broken the law, it’s like they’ve committed fraud and they need to be punished, found and punished and held accountable,” Thorburn said.
The Australian government has pledged to boost the powers of the corporate watchdog, double maximum prison terms and massively increase financial penalties for corporate crime in light of the wrongdoing exposed by the inquiry.
Several senior executives at wealth manager AMP Ltd <AMP.AX> and Commonwealth Bank of Australia <CBA.AX> have lost their jobs as boards across the industry attempt to rebuild public trust.
(Reporting by Byron Kaye and Paulina Duran in SYDNEY, Aaron Saldanha in BENGALRU; Editing by Stephen Coates)