Documents

Questions on notice and questions in writing

 

Australia and New Zealand Banking Group Limited

Commonwealth Bank of Australia

National Australia Bank 

Westpac

 

National Australia Bank 

Q No. Member Question Hansard page
and Hearing date or
Written questions

Response

(Publication date)

NAB01QW  Wilson

Regarding principal and interest mortgages:  

(a) How many do you currently provide, and what is their total dollar value?  

(b) What is their percentage of your total mortgage products provided?  

(c) When the board decides to cut interest rates is the reduction automatically passed through to mortgage holders through lower repayments, or when the board decides to cut interest rates is the reduction in repayments only passed through on request of the holder with the gap paying off additional principal?  

(d) If the latter, how many mortgage holders have requested a reduction in repayments as a percentage of principal and interest mortgage holders?  

(e) For the last two rate cuts, what was the aggregate dollar value reduction in interest repayments compared to each previous month?

Written (PDF 569KB)

NAB02QW 

Wilson

Regarding interest-only mortgages:

(a) How many do you currently provide, and what is their nominalvalue?

(b) What is their percentage of your total mortgage products provided?

(c) For the last two rate cuts, what was the aggregate dollar value reduction in interest repayments compared to each previousmonth?

Written (PDF 535KB)

 

NAB03QW 

 

Wilson

Regarding interest-bearing deposits:

(a) How many deposits are currently held, and what is their aggregate value?

(b) For deposits held, what was their aggregate dollar value in each of the last six months?

(c) For interest payments, what was the dollar value paid in each of the last six months?

 

(d) What has been the reduction in interest payments resulting from   the last two interest rate cuts?
Written (PDF 553KB)

NAB04QW

Wilson

Over the past six months can you please outline for each month:

(a) The standard variable interest rate(s) for a principal and interest   mortgage

(b) The standard variable rate(s) for an interest only mortgage

(c) The standard fixed interest rate(s) for a principal and interest        mortgage

(d) The standard fixed rate(s) for an interest only mortgage

(e) The interest rate(s) for term deposits

(f) The interest rate(s) for any other interest-bearing deposit products.

Written (PDF 597KB)
NAB05QW Wilson A copy of the bank’s payment term policy or policies Written  (PDF 2,370KB)
NAB06QW  Wilson

With reference to the bank’s payment term policy or policies that the bank applies to its suppliers of goods and services, and customers of its goods and services:

(a) whether they are consistent between the purchase and sale of goods and services?

(b) in reference to (a), if not, why not?

(c) in reference to (a), if not, will the bank bring them into consistency?

Written  (PDF 30KB)
NAB08QW Wilson

Whether the valuations on infrastructure investments finances by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?

Written (PDF 181KB)
NAB09QW Wilson

Whether the valuations on large commercial investments or like large commercial investments financed by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?


Written
(PDF 31KB)
NAB10QW Wilson  A copy of the bank’s model litigant standards applied to legal proceedings. Written (PDF 70KB)
NAB11QW Wilson How many class actions are you currently facing, and can you please provide a summary of each case brought against the bank? Written (PDF 38KB)
NAB12QW Leigh At the committee hearing, NAB told us that it had contacted all mortgage customers over the past 12 months, and offered them an opportunity to re-negotiate their loans. Has NAB conducted any analysis on the characteristics of customers that did and did not take up that invitation? In particular, has NAB any evidence that those who did not take up the invitation tended to have lower incomes, reside in more disadvantaged areas, or in other ways be more vulnerable than those who took up the invitation to re-negotiate the terms of their loan? Written (PDF 264KB)
NAB13QW Leigh During the hearing, we had an exchange about a prudential report prepared by EY for APRA. Is it correct that this report was watered down? Written  (PDF 34KB)
NAB14QON Mulino

Dr MULINO:  So one final brief topic in this first tranche of questions: have you undertaken any analysis in relation to how spending and saving behaviour has changed as a result of the first stage of tax cuts?
...

Dr MULINO:  Would you be able to provide some context for that on notice?

Mr Chronican:  Absolutely. I think Alan Oster, our economist, is happy to provide that type of analysis

Hansard p. 18-19

15 November 2019

(PDF 34KB)
NAB15QON Wilson

CHAIR:  Even if you have to take this on notice, looking at the data, there has been a change since the change in the APRA guidelines where you are able to lend more. As interest rates have gone down, has it stayed on a steady trajectory or has there been an adjustment on the average loan that is being taken for residential mortgages?

Mr Chronican:  I would need to answer that on notice.

Hansard p. 19

15 November 2019

(PDF 54KB)
NAB16QON Wilson

CHAIR:  How many people do you currently hire in the bank to deal with cybersecurity?
...

CHAIR:  But you don't know, or you can't give me the answer now, about how many people are employed in this space?

Mr Chronican:  No, but we're happy to provide that on notice.

Hansard p. 23

15 November 2019

(PDF 32KB)
NAB17QON Leigh

Dr LEIGH:  Would you undertake to provide to this committee the results of the 2019 staff survey, or a summary of those results, particularly going to the questions that we've discussed today?

Mr Chronican:  I see no reason why we would not do that; I'm happy to do that.

Hansard p. 25

15 November 2019

(PDF 32KB)

Attachment
(PDF 32KB)

NAB18QON Kelly

Mr CRAIG KELLY:  What's the exposure to metallurgical coal?

Mr Lennon:  I haven't got that with me.

Mr CRAIG KELLY:  Maybe you could take that question on notice.

Hansard p. 28

15 November 2019

(PDF 33KB)
NAB19QON Kelly

Mr CRAIG KELLY:  A final question: are you aware of the case of Tomcsanyi in Western Australia?

Mr Chronican:  No.

Mr CRAIG KELLY:  You made the comment that the bank is acting as model litigants. Perhaps you could take it on notice: do you believe that the bank's conduct in that case has met the definition of a model litigant?

Mr Chronican:  I'll find out.

Hansard p. 30

15 November 2019

(PDF 32KB)
NAB20QON Leigh CHAIR:  Just to build on that—noting that you're obviously very proud of the work that you do in that space and that you say that, when people fall into a position of stress, within 90 days they're back on their feet—has there been analysis that's been done looking at the risks of people relapsing into similar circumstances?

Hansard p. 32

15 November 2019

(PDF 41KB)
NAB21QW Wilson

Anti-money laundering:

(b) How many cases have you reported to AUSTRAC over the past decade?

(c) Of those cases, how many relate to:

(i) money laundering?

(ii) terrorist financing?

(iii) organised crime?

(iv) human trafficking?

(v) child exploitation?

(vi) crimes of a sexual nature?

(vii) other serious crimes not captured by (i) – (vi)?

(d) Can you please provide an update on your initiatives, including details of programs, staff numbers and financial resources toward initiatives to combat:

(i) money laundering?

(ii) terrorist financing?

(iii) organised crime?

(iv) human trafficking?

(v) child exploitation?

(vi) crimes of a sexual nature?

(vii) other serious crimes not captured by (i) – (vi)?


(e) How frequently have you reported to AUSTRAC on a scheduled basis over the past decade?

(f) Please outline the occasions you have reported to AUSTRAC on an ad hoc basis over the past decade?

(g) Over the past decade, how many AUSTRAC investigations into the bank have been:

(i) opened

(ii) completed with penalties

(iii) completed without penalties

(iv) abandoned


(h) How many fines have been paid to AUSTRAC over the past decade, and what were their values?

(i) Have any AUSTRAC notifications or investigations resulted in terminations of employment or other penalties for employees?

(j) Have any AUSTRAC notifications or investigations resulted in terminations of employment or other penalties for executives?

(k) What staff training is provided to assist anti-money laundering and other serious crime detection?

Written (PDF450KB)
NAB22QW Wilson

Merchant facilities and low cost routing:

(a) Do you provide merchant facilities, and if so, to how many customers?

(b) Would your small and medium business customers save money if they moved to low cost routing, and if so, do you actively encourage customers to switch?

(c) If so, how do you encourage small and medium business customers to switch to low cost routing?

(d) Do you think all small and medium business customers should be on low cost routing?

(e) What are the fee structures for different merchant services available, including low cost routing options?

(h) What number and share (percentage of total) of merchant services for all customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?


(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?

(i) What number and share (percentage of total) of merchant services for small and medium business customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?

(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?

Written (PDF606KB)
NAB23QW Wilson Interest rates:

(a) Regarding principal and interest mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(b) Regarding interest-only mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(c) Regarding interest-bearing deposits, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?
Written (PDF97KB)
NAB24QW Wilson Terminations for misconduct:

(a) How many employees does the bank have?

(b) How do you define employee misconduct?

(c) How many employees have been cautioned for misconduct over the past five years?

(d) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years?

(e) How many employees have been terminated for misconduct over the past five years?

(f) How many employees have been cautioned for misconduct over the past five years, as a share of all employees over that timeframe?

(g) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years, as a share of all employees over that timeframe?

(h) How many employees have been terminated for misconduct over the past five years, as a share of all employees over that timeframe?

(i) What are the processes available for whistle-blowers into misconduct within the bank?
Written (PDF145KB)
NAB25QW Wilson Of the twenty highest remunerated employees over the past decade, please provide the number whose total remuneration in a financial year (including all forms of remuneration, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF83KB)
NAB26QW Wilson Of the twenty highest incentive bonuses paid over the past decade, please provide the number that fall within these brackets? Written (PDF69KB)
NAB27QW Wilson Of the twenty highest performance bonuses paid over the past decade, please provide the number that fall within these brackets? Written (PDF82KB)
NAB28QW Wilson Of the twenty highest severance packages over the past decade, please provide the number whose total package (including all forms of accumulated severance package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF70KB)
NAB29QW Wilson Of the twenty highest termination payments over the past decade, please provide the number whose total package (including all forms of accumulated termination package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF85KB)
NAB30QW Wilson Of the twenty highest redundancy payments over the past decade, please provide the number whose total package (including all forms of accumulated redundancy package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF82KB)
NAB31QW Wilson International transfer of funds:

(a) What information does AUSTRAC require for reporting of the international transfer of funds?

(b) What data is required to be input for an international transfer of funds?

(c) What data is required to be input for the verification of an international transfer of funds?

(d) What difference is there between the data required for an international transfer of funds, and a verified international transfer of funds?

(e) What information do you provide to AUSTRAC for reporting of the international transfer of funds?

(f) Do you provide data for verified transactions to AUSTRAC?

(g) Do you provide data for unverified transactions to AUSTRAC?

(h) What difference is there between the data required for an international transfer of funds and the data required for AUSTRAC reporting?

(i) What difference is there between the data required for the verification of an international transfer of funds and the data required for AUSTRAC reporting?
Written (PDF97KB)
 NAB32QW Wilson Impact of Coronavirus:

(a) Has the bank completed any assessment or modelling of the potential impact of Coronavirus on the bank, or the Australian economy?

(b) If yes, can it please be provided?
Written

(PDF77KB)

 

(13 May 2020)

Attachment 1
(PDF91KB)

Attachment 2
(PDF501KB)

Attachment 3
(PDF298KB)

NAB33QW
Leigh
In January 2020, February 2020, March 2020, and April 2020 (to date):

(a) For each month, how many mortgage customers have requested to defer home loan repayments?

(b) For each month, what percentage of all home loan customers do those requesting deferrals account for?

(c) For each month, what is the average debt for home loan customers requesting repayment deferrals?

(d) For each month, what is the average debt for all home loan customers?
Written
(13 May 2020)
(PDF81KB)
NAB34QW
Leigh
Some banks have recently changed the default payment amount for mortgage holders, so that borrowers pay only the minimum amount.

(a) Have you done this?

(b) If so, how many borrowers does it affect?

(c) If not, why have you decided not to take this approach?
Written
(13 May 2020)
(PDF85KB)
NAB35QW
Leigh
On 31 March, the Australian Financial Review wrote that a branch manager at a big four bank was reported for berating staff who weren’t selling enough of the bank’s products, despite customer-facing employees being fearful of losing their jobs or catching the coronavirus.

(a) Did that report refer to NAB?

(b) If yes, what was done to discipline or counsel the manager?

(c) Have there been any other similar incidents in NAB branches?

(d) Have you since or previously issued directives to managers about appropriate targets and tactics for product sales?
Written
(13 May 2020)
(PDF117KB)
NAB36QW Leigh Implementation of Coronavirus SME Guarantee Scheme:

(a) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received in total?

(b) How many credit arrangements has your organisation approved through the Coronavirus SME Guarantee Scheme?

(c) In relation to the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities and not-for-profit entities?

(d) How many credit arrangements for charities and not-for-profit entities has your organisation approved through the Coronavirus SME Guarantee Scheme?

(e) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities registered with the ACNC?

(f) How many credit arrangements for charities registered with the ACNC has your organisation approved through the Coronavirus SME Guarantee Scheme?
Written (22 June2020)
(PDF404KB)
           
NAB37QW Leigh

In the months of March, April and May 2020—how many overdrafts or similar short term credit arrangements (other than those initiated through the Coronavirus SME Guarantee Scheme) has your organisation set up with each of the following overlapping populations:

(a) charities and not-for-profit entities;

(b) ACNC registered charities; and

(c) SMEs.

Written (22 June2020)
(PDF407KB)
NAB38QW Wilson

Westpac has publicly stated that it will defer repayments on credit cards for COVID-19 affected customers (Westpac Freezes Credit Card Charges for COVID-19 hit customers, The Age, 24 April 2020). Therefore, can you please advise:

(a) What processes do you have in place to identify credit card customers who have been impacted by the COVID-19 pandemic?

(b) How many credit card customers have requested deferrals of repayments related to the COVID-19 pandemic?

(c) How many credit card customers have you identified as impacted by the COVID 19 pandemic?

(d) For those credit card customers that you have identified as impacted by the COVID-19 pandemic:

(i) What is the accumulated value of the credit card debt?

(ii) What is the average value of the credit card debt?

(iii) What is the accumulated value of the credit card limit?

(iv) What is the average value of the credit card limit?

(v) What is the accumulated value of the credit card monthly repayments?

(vi) What is the average value of the credit card monthly repayments?

(e) What deferral options are available for credit card customers that you have identified as impacted by the COVID-19 pandemic?

 (i) If none, do you intend on doing so?

Written (22 June2020)
(PDF606KB)
NAB39QW Bandt In December 2017, NAB stated it will "no longer finance new thermal coal mining projects." However, since making that statement NAB has reportedly provided funds to the largest pure play coal mining companies on the ASX, New Hope Group and Whitehaven Coal, both of which are currently pursuing new thermal coal mining projects. The funds provided to New Hope were explicitly for the purpose of (among other things) funding New Acland Stage 3, a new thermal coal mining project.

Further, NAB funded Coronado Global Resources at least twice since October 2018, on both occasions supporting Coronado to expand or extend the life of the Curragh coal mine which has a significant thermal component and supplies the Stanwell coal-fired power station. Shortly after lending to Coronado in October 2018, the company stated it had extended — by a decade, to 2038 — its contract to supply thermal coal to the Stanwell coal-fired power station, a decision that was “expected to materially extend mine life until around 2038.” In September 2019, NAB refinanced that loan and at the same time provided additional debt intended to expand the Curragh coal mine.

(a) Can NAB explain how these loans are consistent with its ban on financing new thermal coal mining projects?

(b) What assurances can NAB provide that none of the funds loaned to Whitehaven in February have been or will be used to fund new thermal coal mining projects?
Written (3 July 2020)
(PDF416KB)
NAB40QW Wilson

Merchant services and low cost routing:

(a) In terms of your Point of Sale (POS) strategic merchant services:

(i) What is the total number of your POS strategic merchant services customers?

(ii) What is the number of small and medium business customers?


(b) What number and share (percentage of total) of your total strategic merchant services customers and number and share of small and medium business merchant services customers:

(i) Use the Least Cost Routing (LCR) or Merchant Choice Routing (MRC) option for multi-network debit transactions?

(ii) Have a contract for the lowest cost routing option, when including all fees associated with the transaction including interchange and scheme fees?


(c) Is LCR or MCR on multi-network debit transactions offered to all customers as an opt-out option to ensure all get access to savings? If not:

(i) Why?

(ii) Considering that the Reserve Bank of Australia has advocated LCR since 2013, why have you not found a way provide this service and the associated cost savings to all of your merchant services customers?

(iii) Do you believe you are acting in your merchants’ best interests by not passing on possible savings?


(d) Are LCR or MCR services offered on all terminal types for multi-network debit transactions? If not:

(i) Which terminal types do not have LCR or MCR?

(ii) What percentage of your terminal fleet does this represent?

(iii) When do you plan to upgrade those terminal types that do not have LCR or MCR to enable those merchants with those terminal types to access LCR or MCR?


(e) Are LCR or MCR services offered on all pricing plans for multi-network debit transactions? If not:

(i) Which pricing plans do not have LCR or MCR as an option?

(ii) What percentage of your small and medium business merchant customers are on these plans?

(iii) Why?


(f) If you provided all your strategic and small and medium business POS merchant services customers access to the lowest cost scheme on all multi-network debit transactions, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?


(g) If you passed on at POS the lowest cost per transaction via dynamic routing to your merchants, based upon current and eftpos 1 July 2020 pricing, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?


(h) Are any additional fees or charges, such as terminal rental, added or increased for small and medium business merchant customers who elect to implement LCR or MCR?

(i) If so, why?

(ii) Do you increase the average eftpos transaction fee for customers who choose to use LCR or MCR compared to other plans? Why?

(iii) Does a customer’s choice to use LCR or MCR for debit transactions impact the fees you charge for credit transactions for any of your merchant customers? Why?

Written (30 July 2020)
(PDF450KB)
NAB42QW Wilson

For each provider, provide the following information based on the method of calculation for each merchant category type in your debit Acquiring portfolio:

(a) Contracted provider (e.g. Visa)

(b) Interchange fee (e.g. 0.04 per transaction)

(c) Scheme fee based on an $40 transaction (e.g. $0.01 per transaction for first twenty transactions, then $0.02 for every transaction thereafter)

(d) Acquirer costs and margin (e.g. 1 per cent of transaction)

(e) Any other cost (i.e. any fee not listed above)

(f) Any ‘profit’ or ‘premium’ charged in addition by the bank that is passed onto the merchant (i.e. any fee not listed above)

(g) What is the total retail cost charged to merchant customers for each merchant category and each debit scheme, not including volume incentive payments for the following transactions:

(i) $5

(ii) $20

(iii) $40

(iv) $100

(v) $1,000


(h) What is the total Acquiring wholesale cost for each merchant category and each debit scheme, not including volume incentive payments for the following transactions?

(i) $5

(ii) $20

(iii) $40

(iv) $100

(v) $1,000

Written (30 July 2020)
(PDF402KB)
NAB43QW Wilson Eftpos:

(a) Do you intend to pass on savings from the eftpos interchange wholesale repricing for routed multi-network debit card transactions that is being introduced on 1 July? If so, how much of the 2 cent reduction per transaction will be passed on?

(b) When do you intend to turn on all eftpos digital messages?

(c) Have you turned on at least the low risk transactions such as card on file and D&W that were technically available in 2018? If not, why?

(d) Do you believe turning on digital for eftpos will create more price competition and place issuer income at risk? If so, is this one of the reasons you have been slow to launch eftpos digital?

(e) Do you think you are acting in your merchants’ best interests by not turning on eftpos digital transactions sooner?
Written (30 July 2020)
(PDF408KB)
NAB44QW Wilson In the context of an exchange that occurred during the House of Representatives’ Standing Committee on Economics’ hearing with the Reserve Bank Governor and the Member for Mackellar on 14 August 2020:

Mr FALINSKI: And I congratulate you for drawing attention to something that people have deliberately ignored for too long, but while we're on the point of bad regulations and unintended consequences, we, the federal parliament, introduced not long ago responsible lending obligations, which essentially have the principle that the lender is responsible for decisions that the borrower makes. Is it your evidence to this committee and to the parliament that that law is not having any impact on credit creation and lending to small business and to those enterprises that are taking a risk in starting new enterprises?

Mr Lowe: That's not my evidence. I think it is having an effect. Just to go back to the legislation the parliament passed, which at a very high level is eminently reasonable, it says that, when extending credit, the loan can't be unsuitable—who could argue with that?—and in making the loan you've got to take reasonable steps that the borrower can repay. Well, who could disagree with those two broad principles? I find it very hard to disagree with them. What has happened is that those principles have turned into hundreds of pages of guidance. Once the compliance people, the lawyers, the regulators and the media get involved, these high-level principles put in law get turned into a lot of guidance, because people don't want to offend these kinds of regulatory requirements.

Mr FALINSKI: Can I humbly put it to you that you're being very generous. Wasn't it the interpretation of the courts, until the recent ASIC v Westpac case, that what this actually did was put the obligations back on lenders to understand absolutely and completely the capacity of borrowers to service a loan? That's why it turned into hundreds of pages and, when this was tested before the courts, especially the lower courts, that's what they found. I guess that's why we say the principle makes sense but the unintended consequence was that it restricted lending in the Australian capital markets.

Mr Lowe: I agree with you. I think the principles in the legislation are sound, but I think the way we've translated those principles into reality needs looking at again. If we can't do that properly, maybe we need to look at the legislation. We can't have a world in which, if a borrower can't repay the loan, it's always the bank's fault. On a portfolio basis, we want banks to make some loans that actually go bad, because if a bank never makes a loan that goes bad it means it's not extending enough credit. The pendulum has probably swung a bit too far to blaming the bank if a loan goes bad, because the bank didn't understand the customer; if it had done proper due diligence—this is the mindset of some—the bank would never have made the loan. So some of the banks have had this mindset, 'Well, we can't make loans that go bad.' I would have to say, though, that in the past three or four months I've heard fewer concerns from the banks about the responsible lending laws. ASIC introduced new guidance. Institutions are gradually coming to grips with those.

Mr FALINSKI: That might be because, under the extraordinary powers we granted the Treasurer, he has given them relief from RLOs.

(a) Can you advise whether the Governor of the Reserve Bank of Australia’s views reflect that of your institution?

(b) Do you agree with the principles established in legislation on responsible lending obligations? If not, which principles and why?

(c) Are there any principles in the legislation that you believe could be amended or replaced that would better enable the bank to provide credit?

(d) Do you agree with ASIC’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(e) Are there any sections in ASIC’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(f) Do you agree with APRA’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(g) Are there any sections in APRA’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(h) Have there been any unintended consequences resulting from the rulings of courts or tribunals that have applied strict interpretations of responsible lending obligations?

(i) Have there been any decisions of courts or tribunals, such as AFCA, that you have chosen to appeal? If so, please provide details.

(j) Have you removed any products as a result of responsible lending obligations?

(k) Since 2008, what debt products have you removed from your product list as a result of responsible lending obligations?
Written (14 April 2021)
(PDF166KB)
NAB45QW Wilson

(a) Have you completed a cost estimation of the impact of implementing responsible lending obligations for:

(i) Your institution? If so, please provide this estimation.

(ii) Your customers? If so, please provide this estimation.

(b) Since the exemption from the responsible lending obligations for small and medium enterprises has been in place:

(i) Have you adjusted your internal processes to assess credit approvals?

(ii) What impact has the exemption had on the bank’s capacity to lend?

(iii) If the exemption has had no effect, why?

(c) Have you seen small and medium enterprises turn to other lines of credit during the coronavirus pandemic? If so, why?

Written (14 April 2021)
(PDF125KB)
NAB46QW Wilson

(a) Do you have any case studies highlighting where responsible lending obligations are inhibiting the provision of credit to individuals, households, or small and medium enterprises? If so, can you provide them to the committee?

(b) Have you estimated the cost of applying the responsible lending obligations? Has it increased the fees and charges for customers? If so, please provide information on how much the average and median fees and charges to customers have increased for the following products:

(i) new mortgages;

(ii) refinancing internal mortgages;

(iii) refinancing transferred mortgages;

(iv) new small and medium enterprise credit;

(v) refinancing and/or rollover internal small and medium enterprise credit; and

(vi) refinancing and/or rollover external small and medium enterprise credit.

(c) Have you estimated the impact of applying the responsible lending obligations on the amount of processing time required from the receipt of an application to approval? Has the required processing time increased? If so, please provide information on how much the average and median processing times have increased for the following products:

(i) new mortgages;

(ii) refinancing internal mortgages;

(iii) refinancing transferred mortgages;

(iv) new small and medium enterprise credit;

(v) refinancing and/or rollover internal small and medium enterprise credit; and

(vi) refinancing and/or rollover external small and medium enterprise credit.

Written (14 April 2021)
(PDF112KB)
NAB47QW Wilson Please complete the below table (see following page) for:

(a) new mortgages;

(b) refinancing of internal mortgages;

(c) refinancing of transferred mortgages;

(c) new small and medium enterprise credit;

(d) refinancing and/or rollover of internal small and medium enterprise credit;

(e) refinancing and/or rollover of transferred small and medium enterprise credit?
Written (14 April 2021)
(PDF87KB)
NAB48QON Wilson CHAIR: ... Just going on to a few things around culture in the organisation, in light of the issues at QBE and AMP, how many nondisclosure agreements related to sexual harassment does NAB have?

Mr McEwan: Over the last three years, we have had nine nondisclosure agreements, and the majority of those were actually at the request of the complainant.

CHAIR: Right, so nine in total. Are they all related to issues of sexual harassment?

Mr McEwan: Those are the nine related to nondisclosure related to sexual harassment.

CHAIR: And how many of them were requested by the individual who was aggrieved?

Mr McEwan: There were five.

CHAIR: So the other four were at the request of the bank?

Mr McEwan: Or just an agreement as part of the settlement at the end of it. But five were at the request of the complainant.

CHAIR: So when we asked a similar question of ANZ and CBA last week, they said 'zero'. When we asked it of Westpac this morning, they said they would have to go away and find out, and you've got nine. That suggests something troublesome at the bank in policies, procedures, practice and culture. Do you want to give a reflection on that and what you're doing about it?

Mr McEwan: I don't think it's a reflection of our current policies and procedures at all. I think they are quite robust, and we've been spending some time recently having a good look at those and reporting to the board not only on these cases but also what are our reflections about the policies and procedures. We have been developing a very strong culture in the organisation of speaking up so that people actually do take action, and we want to hear about it. So, yes, I am concerned that one case of sexual harassment in this bank is one too many but I don't think it's a case of the policies and procedures not working. We are always open to having them better but we're making sure that these issues are brought forward and that people feel safe about bringing them forward. One the issues around five of our cases wanting to remain confidential was they wanted the issue dealt with but they didn't want it internally or externally made public. They wanted it addressed, and I think that's a very good sign.

CHAIR: I accept part of that but I'm not sure I accept it in totality. Can I just ask then on a matter of the geographic spread of the nine, how many occurred in Melbourne, how many occurred in Sydney, how many occurred in Brisbane or are they all in one location? Are they the same people? I haven't forgotten about other places either. I'm trying to say: what is the geographic spread of them?

Mr McEwan: I don't have those.

Mr Dooley: I don't have those with me. I can find out.

CHAIR: I think it would be helpful because obviously if they're all located in a single location or mostly in a single location, it does raise issues of culture perhaps in localised offices, including, I accept, that part of it can be that the localised culture might be to bring things forwards versus it being an issue specifically with the bank. So I appreciate if you would bring that to our attention.

Mr McEwan: We'll take that on notice.
Hansard p. 33
11 September 2020
(2 October 2020)
(PDF139KB)
NAB49QON Wilson CHAIR: How many people from Australia do you have in Hong Kong and Beijing?

Mr McEwan: From Australia—

Mr Dooley: In Beijing, I think, there are one or two. It's a very, very small office. Hong Kong is more substantial. I think, from memory, there would be—and this is approximate—in the order of 20 out of 120. We can come back to you with specifics.

Mr McEwan: About 20 per cent of our staff in the Hong Kong office are Australian, and it would be similar in Singapore. The rest are locals.
Hansard p. 35
11 September 2020
(2 October 2020)
(PDF114KB)
NAB50QON Wilson CHAIR: What's the superannuation contribution that NAB pays their staff?

Mr McEwan: Ten per cent.

CHAIR: So not 9.5 per cent, the legal level?

Mr McEwan: No, it's at 10 per cent.

CHAIR: Okay. So when super is paid by NAB it's paid on what basis? How frequently?

Mr McEwan: Fortnightly.

CHAIR: When it's paid from the NAB payroll system through to the Plum system, how long does it take to transfer? So let's say it's paid on the 14th and the 1st of the month or thereabouts, on what date can it be seen and identified in individuals' accounts in the Plum system?

Mr McEwan: Shaun, are you aware of the actual details of that?

Mr Dooley: No, I'm not aware of the actual days lapsed, but it's something we can certainly investigate and come back to the committee on. There's no undue delay; I just couldn't tell you exactly how many days.

CHAIR: There's no intermediate clearing house in between?

Mr Dooley: Not that I'm aware of.

Mr McEwan: Not that I'm aware of, but we will come back to you on it.
Hansard p. 35, 11 September 2020 (2 October 2020)
(PDF111KB)
NAB51QON Wilson CHAIR: How many staff just default to the fund versus how many actually check or choose an alternative option?

CHAIR: I don't have that detail here with me. We will have to come back to you on that.

CHAIR: Okay. I'd appreciate that very much.

Mr McEwan: Just so we can get the right details to you, what are you—

CHAIR: I'm happy to put these further questions on notice, but the principal thing I'm interested in across the entire super system is the extent to which money that Australian workers are owed is paid into their superannuation accounts and the delay that's occurring. Is it going straight in? We heard yesterday that Cbus has a clearing house. It isn't clear how long money sits in that clearing house, what happens to the money that isn't allocated to an account and whether that money is used and then accrues interest at that point. I want to make sure that money is going straight into people's accounts and it's being used for that purpose and the interest that's accruing is going to the people whose money it is. That is the primary interest. You have you own systems, so I'm interested in yours as well.
Hansard p. 35-36
11 September 2020

(2 October 2020)
(PDF114KB)

NAB52QON Falinski Mr FALINSKI: …Mr McEwan, do you have a diversity policy at NAB?

Mr McEwan: Yes, we do. We have a diversity and inclusion policy at NAB.

Mr FALINSKI: Does that include promotion on the basis of merit?

Mr McEwan: Yes, it does.

Mr FALINSKI: Would it be possible for you to furnish the committee with that policy, on confidential basis if needs be?

Mr McEwan: Absolutely. It was actually at the board this last week, so I'm very well aware that we do have one.
Hansard pp. 41
11 September 2020

(2 October 2020)
(PDF109KB)

Attachment
(PDF1,461KB)

NAB53QON Simmonds Mr SIMMONDS: …I share your passion for ensuring that we can find a way to live and work better with COVID. Just to extend the theme that you were talking about in your opening statement: has the bank done any modelling around the economic impact of internal border closures at the moment?

Mr McEwan: We haven't, but the impact you're seeing on the border closures flows through into our economic numbers, which show a minus 7.8 per cent GDP drop this year. The only thing we can do is say: if the borders opened tomorrow, what would that do? Of course it would mean the loss was less, but to what extent I don't know. We'd have to get our economics team to run that through. If you want, I'm happy to get Alan Oster's team to see if they can run that through: if, for example, the borders stayed closed till March of next year, what the impact would be on what we were hoping would be a lift in GDP. I think you'd find it would be reasonably severe.

Mr Dooley: I think it's important to recognise that all of our economies are interdependent, so any restriction on that interdependency is going to be negative on the economy and a delay in opening up the borders will show our economic recovery. It certainly would take a couple of percentage points off GDP and it would increase the unemployment rate as well.

Mr McEwan: I'm happy for the committee to see if Alan Oster, our chief economist, could give you some numbers—if, for example, the borders didn't open up as anticipated at the end of this year, what that impact would be on next year's GDP.

Mr SIMMONDS: I'd be grateful for both scenarios, if you wouldn't mind providing it to the committee.
Hansard pp. 44-45 11 September 2020 (2 October 2020)
(PDF130KB)
NAB54QON Simmonds Mr SIMMONDS: ... What are you finding, anecdotally, on the ground? Are you seeing more people approaching you, in terms of deferral and hardship grounds, from Queensland, for example, where the borders are closed? Are you seeing more hardship cases from particular industries, like tourism, which are particularly impacted by border closures?

Mr McEwan: First off, the hardest impact has been Victoria, not just border closures but big parts of the economy closed down. That's where we're seeing the greatest drop-off. We've got the numbers on Queensland, that we're very happy to furnish for you, on what we're seeing by way of deferrals. By having the economy open we are seeing customers starting to come off deferral but not to the extent—Victoria is coming off at a lot lower rate than in Queensland, for example, where Victoria is both closed down and border closed. So it's that staged approach.
Hansard p. 45
11 September 2020
(2 October 2020)
(PDF112KB)
NAB55QON Simmonds Mr SIMMONDS: …I'll switch to a slightly different topic that I'm concerned about, which is the recent Banking Association commentary around people using bank transactions as a de facto messaging service, particularly around domestic abuse cases, and as a form of coercion and control. Have you taken steps within your bank to anticipate or identify the extent of the problem?

Mr McEwan: Firstly, we believe we understand the extent of the problem. We're working with the industry to get a plan that we can all work on to stop this. At the moment, we're not in a position to intervene ourselves at this point, but we need to be. We're working with the industry to get an approach to this and a model that we can all operate on to help customers out.

Mr SIMMONDS: What do you mean when you say you're not in a position to intervene? Is it that the regulatory framework isn't there?

Mr McEwan: No, just from our own systems perspective—

Mr SIMMONDS: Right.

Mr McEwan: and that we want to be in that position, but, right now, we're not.

Mr SIMMONDS: So you can identify where somebody is using particular words, for example, and therefore you can quantify it. But surely you can then take action against the individual
customers, could you not, to prevent them from continuing as a customer, for example?

Mr Dooley: We're working through this issue very carefully. There's definitely an issue. There are millions of transactions occurring every day, and we need to ensure that the solution that we develop enables us to deal with that in an effective way. We've formed a working group. We're looking at what's required to be done in terms of both our approach and our systems, and we're looking to implement a solution to that. But we're in the face of reviewing and investigating the issue. It's definitely an issue and it's one that we want to be able to address.

Mr SIMMONDS: I like it if perhaps you had a viewpoint, but, in terms of the Australian parliament, are there the appropriate regulations, legislation or criminal offences in place that would allow you to take appropriate action when you identify these kinds of cases, particularly if it is vile and ongoing abuse?

Mr Dooley: Yes, I think that's a good question, and it's one that certainly the Australian Banking Association has formed a working group which we and the other banks are involved in. I think that working group will look at those very issues that you've highlighted, to see whether recommendations can be made to improve the legislative support for what we need to do to clearly protect—

Mr SIMMONDS: Okay. I understand the Banking Association will have a view about this, but do you as an organisation have a view about what more needs to be done?

Mr McEwan: From the perspective of our specific bank, we need to put ourselves in a position to actually block out these payments while this sort of commentary is put beside them, and at the moment we're just not in that position, but we need to get ourselves there. That's what Shaun says we're working on.

Mr SIMMONDS: Good. I agree. Have you got a time frame for when you think you'll be in that position with the upgrade currently underway or something?

Mr McEwan: I'm trying to defer this because we see it as a serious issue, but across multiple payment structures we need to find a way of blocking them. You can probably do one, but you can't do the probably 50 that come in and out of the organisation through different pipes. We need find a solution across those to block them out, and we don't have that at the moment.

Mr SIMMONDS: You said you were able to quantify. Do you have a number that you can provide the committee about the extent of it within customers in the bank?

Mr McEwan: I haven't got that. We can see if we can find that number and come back to you. I haven't got that number with me here. I think one of the other banks has done quite a bit of work on what they've seen. We've started that process, and our view was to work with the industry on it so we've got a unified way of doing it. I don't have a solution today.

Mr SIMMONDS: Okay. I would appreciate it if you could take it on notice and furnish the committee with any further information you can provide as your organisation progresses to deal with the matter.
Hansard pp. 46-47
11 September 2020
(2 October 2020)
(PDF133KB)
NAB56QON Bandt Mr BANDT: I guess I'm thinking specifically about an instance. I appreciate and understand the commitment that's been made with respect to phasing out your exposure to existing mines and the time frame for how that might happen. I'm talking about the specific commitment that you've made around not financing new thermal coal mining projects. Moving from a general question to a more specific question—without identifying any clients, because I imagine you'd be reluctant to do so—have you been involved this year in refinancing for any of your clients where one of the clients or one of the client's subsidiary companies wants to engage in new thermal coalmining in Australia?

Mr Dooley: We have refinanced some of our clients' facilities this year, so the answer to your question is yes. Some of their activities will include coal—some will be metallurgical and some will be thermal. The notion of a refinancing is actually an extension of an existing commitment, and part of our—

Mr BANDT: Sorry to interrupt, but I'm not talking about refinancing with respect to existing mines; I'm talking about refinancing where there's a new coalmine being proposed. Have you done that?

Mr Dooley: I'd have to understand the particular circumstance to be able to answer that question.

Mr BANDT: There's an instance where Whitehaven Coal is proposing to establish the Vickery coalmine, and from that mine there will be thermal coal extracted. It's my understanding that NAB participated in the refinancing of Whitehaven earlier this year in a context where part of the reason they're seeking that refinancing is to open up a new thermal coalmine. So I'm asking: what does your policy actually mean? If it's easy to just circumvent it by saying, 'We're refinancing a group, and if one company in that groups wants to open up a new coalmine then there's nothing we can do about that,' doesn't that suggest there's a big hole in the policy?

Mr McEwan: Can we take the example on notice? My understanding was that it was just a straight-out refinancing, a rolling over of existing funding, and it wasn't to do with any new funding or new facilities. I'd have to check on that, but my understanding was that it was just a straight-out refinancing of existing funding.

Mr BANDT: Yes, if you could, because it might be that you're continuing the existing arrangements you have with the company but that part of the reason the company wants that refinancing is so that it can engage in the opening up of new mines. If that's part of the reason for the refinancing then it would seem to me to be inconsistent with your stated policy from December 2017. So if you could take that on notice I'd appreciate it.

Mr McEwan: Yes, thank you. Can I just reiterate our policy: 50 per cent down by 2028 and out by 2035. So I wouldn't be expecting us to be doing any new new or looking to fund any new coalmining of a thermal nature.
Hansard pp. 48-49 11 September 2020 Responses to
questions 56 - 57

(2 October 2020)
(PDF141KB)
NAB57QON  Bandt Mr BANDT: You can take it on notice with expect to Whitehaven. I also asked you some questions on notice previously about New Hope Coal and Coronado Global Resources, and the answer you provided, with respect, didn't answer the question directly. I'll ask it again, and maybe you'll need to take it on notice again. I don't understand how these loans are consistent with a ban on financing new thermal coalmining projects, when you have companies that are talking about new or expansion at a time when you're saying that you want to contract. If you can respond to either of those two now, that would be great, but you can take them on notice if you need to.

Mr McEwan: I'll have to take those on notice, but I go back to our policy. I'd find it strange to be doing new and new new when we're coming out and working into that position with our customers as well. I could see it if we were funding them for other alternative sources of energy as they themselves transition. But we'll certainly take that on notice.
Hansard p. 49
11 September 2020
NAB58QON Hammond Ms HAMMOND: In your opening address which, as the Chair said, was great, you talked about things that now need to happen to reboot our economy and to get the country going again. You mentioned borders and, if I recall correctly, you mentioned red tape, investing in digital and in manufacturing. Getting rid of red tape is a pet area of mine so I was obviously delighted by the fact that you identified that. What is the red tape? What is the impact of red tape on the economy from your point of view?

Mr McEwan: We've just done a report on SME and how to get SMEs hiring more people and getting them going. There were five features that came out of that report. It's actually a pretty easy read and if you don't have time to read the whole thing just read the case studies for the examples.

Ms HAMMOND: It's online, isn't it?
Mr McEwan: They give you a real insight into what a medium-small business does all day. For example, if they wanted to take somebody new on board, it's about 18 hours of their time because of all of the payroll-type activities and the things they have to think of from an employment perspective and the like. Our question is how could we simplify that? There's another little example of an IGA store—I think they employ 24 people; they have a student working 14 hours total in the week, but they're paid five different pay rates—

Ms HAMMOND: Yes, I've got an IGA—

Mr McEwan: [inaudible] pay rate down, but I am saying, 'Hey, come on. Can we just get one rate for 14 hours?' I'm not trying to take any money off anybody, but you can imagine the complexity that we've built into these places. Another one we had was let's get them paid quicker because the payment owed to a small business is their lifeblood. Maybe we should be forcing people to pay not in 30 days, but back into 20. As a business, we try and do every payment to a small business in 20 days, not in the 30 days. We're pretty good at this now, but it's been a discipline that's important. There are some really good examples in there about what could kickstart a small business area. We just need them to take on another employee and we need the confidence to do that and the simplicity of it. It's all very well for a big business like us: we've got people who can deal with the complexity, but if you're running five people, and want to take on the sixth and it's 18 hours, I'm not too sure you're going to be happy.

Ms HAMMOND: There's so much that you've just said there that I'd love to follow-up on. As a big business that can invest a lot, you have actually—and it's been raised earlier—come a cropper because of IR laws, the awards and the EA, and the complexity. So if you can come a cropper with that, in the IGA example that you've just highlighted, of course they're going to run afoul of it at some point in time. I did want to pick up on that. That report is available online, is it?

Mr McEwan: Yes, it is. We're very happy to get that report to the committee.
Hansard p. 52
11 September 2020

(2 October 2020)
(PDF120KB)

Attachment
(PDF6,178KB)

NAB59QON Mulino Dr MULINO: Thanks for coming to give evidence today. I want to start with an issue that was reported late last year, which I asked a couple of questions of Mr Cronican about. It was the AML/CTF issues that were identified. This really follows on from some of the issues that Ms
Hammond was talking about in relation to some of the non-financial risks. I'm just curious as to what actions have been undertaken following on from the identification of those issues?

Mr McEwan: We've got a major program here, running through the organisation, on anti-money laundering and knowing your customer. I assume you're talking about those issues.

Dr MULINO: Yes.

Mr McEwan: We've had a program running for a couple of years. We've got about 1,000 people now who are working on this part of the organisation to pick up on the point that Ms Hammond talked about: payments going in and out of the system and identifying what looks strange. We've been doing work on making sure we know in detail who our customers are and what activities they're involved in so that we can start detecting. We still have a lot to do. We've made very good progress, in my mind, but we still have a lot to do, and we need to be very open with the committee on that. But we have a program that we've shared with AUSTRAC. We've taken them through all the milestones we believe we'll achieve. It comes through a committee on this every month. It comes up to the board at the board meetings, and we do report regularly through into AUSTRAC on progress. This is to me a vital issue of keeping Australia safe and stopping parties that shouldn't be operating in the Australian marketplace operating here. So we don't see this as just 'we need to do this to stay out of trouble'. We need to make Australia safe, and that's the basis we've gone into it on as well. But there is lots of work still to do.

Dr MULINO: Are you able to identify how many extra staff and also how much extra investment in IT has been undertaken in the last six and 12 months? You might need to take that on notice.

Mr McEwan: I can give you an example. We can probably give you those numbers. If you look back, in 2018 we would have had about 200 staff in this area.

Mr Dooley: In the front line, and then a much smaller number on the subline.

Mr McEwan: A smaller number in the back. Right now, in our centralised area for looking after these areas, there's 1,000 staff, and now, on a remediation program, we're actually putting in another 200 to speed up the remediation and get our data into a much, much better shape. But our core numbers, not just in our front line but in our core operating parts of the bank, are about 1,000 colleagues working on this.
Hansard p. 53
11 September 2020
(2 October 2020)
(PDF118KB)
NAB60QON Mulino Dr MULINO: …Can I ask you this on notice? You're saying that you're going to be touching base with a lot of your SME clients and I think residential mortgage holders in another three months. I suspect you'll be having a lot of discussions in between. It would be really useful to get any kind of quantitative or qualitative update that you can provide on the sectoral and geographic breakdowns and, in particular, hotspots as to where there are particular concerns. Some of this will be obvious, like tourism in regional areas where people aren't allowed to travel, aviation and some parts of retail, but it would be interesting to get the breakdown given your breadth of business contact.

Mr McEwan: Very happy to do so.
Hansard p. 55
11 September 2020
(2 October 2020)
(PDF117KB)
NAB61QW Wilson The following exchange took place during the public hearing with the Commonwealth Bank and the Committee on 4 September 2020. Could you outline any data NAB holds in regards to young mortgage holders and assistance from family members?

Ms HAMMOND: To what extent do you seek personal guarantees, particularly from young people, from family members or from others as a condition of providing people with loans?

Mr Comyn: I couldn't give you the specific proportion in terms of the number of home loans that we'd make where someone would offer a guarantee. Guarantees are a high-risk area from the bank's perspective. There have been examples in the past where people don't adequately understand the risks of providing the guarantee. We've definitely improved the process, the controls and the checks in place. Unfortunately, sometimes that can manifest itself where perhaps a parent may not have fully understood the documentation their child was providing to them and they don't understand the recourse that's available to an institution when you do provide a guarantee. I'd be happy to look into the exact numbers. I suspect it has reduced, and it's been an area of real focus for us and I think the broader industry over the last several years.

CHAIR: Sorry, Ms Hammond, can I just interrupt and ask a follow-up question to that because it's contextually relevant? Does the CBA have any data on young home mortgage applicants who get financial assistance from parents or other family members to support their deposit?

Mr Comyn: We would, Chair. It would probably understate the actual numbers. Sometimes you see survey data where people would say what proportion of their homes are being supported by the bank of mum and dad often or family members. Applicants may—obviously, we'd prefer they didn't—disclose their savings as opposed to a gift, but I suspect that parents or family members are helping a substantial proportion of new borrowers in the market at least at some point.

CHAIR: The data suggests that it's always underreported but, on notice, could you get us that data; and, for the secretary, could we ask that of all of the four major banks?
Written (2 October 2020)
(PDF408KB)
NAB62QW
Falinski

In regards to Responsible Lending Obligations (RLO):
During your evidence on 11 September 2020, you indicated that RLOs are being managed by NAB and are not causing disruption to credit applications.

(a) In regards to your credit application process:

i. How did RLO change your credit application process?
ii. How much longer is your credit application form following implantation of RLO?
iii. What is your appeal process for customers when denied credit?
iv. What are the most common points of appeal?
v. How many more applications are refused now compared to prior to RLO being implemented?

(b) Have you, similar to that undertaken by Westpac for their case with ASIC, undertaken an analysis of credit impairment from cohorts both pre and post RLO?

i. If so, does this analysis show that impairment was higher post introduction of RLO?

(c) In regards to the number of staff working in this area:

i. How many people did NAB have working on RLO system changes?
ii. How many more people are now working in credit compliance area post RLO?
iii. What is the cost of these changes and ongoing increase in overheads?

(d) How has ASIC updated guidance changed NAB’s approach to RLO?

(e) APRA’s prudential guidance specifies information that banks must ask from consumers in order to comply with lending requirements.

i. Does NAB take the view that it must ask for all of this information, or most of it?

Does NAB need to be able to cite all the required documentation or is it satisfied with other forms of proof such as the customer’s word?

Written

(27 July 2021)
(PDF138KB)

NAB63QW Falinski

In regards to NAB’s use of proxy advisers:

(a) Does NAB engage or use proxy advisers?

i. If so, which advisers does NAB engage with and how?

ii. How are they remunerated?

iii. What advice do they provide?

iv. How does NAB use that advice?

v. Why does NAB believe that it needs to use Proxy Advisers?

vi. What process does NAB have in place to ensure there are no breaches of the corporations law?

vii. What policies, business practices or decisions have proxy advisers asked NAB to modify?

Written (8 October 2020)
(PDF76KB)
NAB64QW Leigh In the recent House Economics Committee hearing, you noted that your bank no longer sells credit card insurance.

(a) For customers who previously purchased credit card insurance, have you taken steps to identify those who were sold the product when they were not eligible to claim on it? (For example, insurance to cover job loss but the customer was unemployed or retired when they purchased the product)

(b) If credit card insurance customers purchased your product when they were not eligible to claim on the policy, have you refunded them the cost of the policy?
Written (13 October 2020)
(PDF405KB)
NAB65QW Leigh For your bank, please complete the table below relating to your bank’s branch and ATM coverage since 2000 as a point-in-time measure for each of the stated years. Written (13 October 2020)
(PDF424KB)
NAB66QON Falinski Mr FALINSKI: Sorry to interrupt, but I will get cut off. As a member of parliament, what are the two or three publicly available data points that I should be looking at, in your view?

Mr Dooley: The level of impaired customers in each of the portfolios—the 90 days past due—and what's happening in terms asset quality. What's happening in terms of risk weights is another indicator. You'll have good customers whose risk profile will change. That's reflected in how much capital we hold. Looking at what we call risk density—it's a very technical term, and I apologise for that—will show what's happening in terms of risk profile.

Mr FALINSKI: We will keep an eye on that. If it were possible for you to furnish the committee—even, again, on a confidential basis—with what levels you think we, as a committee, should be aware of, if numbers fall, that would be very helpful.
Hansard pp. 41-42
11 September 2020
(14 April 2021)
(PDF422KB)
NAB67QW Leigh

In July 2019, NAB contacted 13,000 customers about a data breach that had compromised their personal information. (NAB Media release - ‘NAB Apologises to customers for data breach, 26 July 2019)

In regards to this data breach:

(a) Which two data companies received the unauthorised data transfer?

(b) Does NAB expect recipients of its customers’ data to have their own protocols for ensuring any transfer has been authorised?

(c) Did NAB locate the failing, either within NAB itself or the data service companies, that allowed this unauthorised transfer to proceed?

(d) How did the unauthorised transfer proceed?

(e) NAB’s media release on this matter noted the customers’ information was uploaded without authorisation to the servers of the two data service companies. Please outline the normal authorisation path NAB follows for such transfers.

(f) Does NAB still use the data services of the two companies involved in the breach?

(g) Are the NAB staff involved in the breach still employed by NAB?

(h) Have data sharing protocols been changed as a result of this incident?

(i) How has NAB guaranteed this kind of unauthorised transfer cannot happen again?

Written (14 April 2021)
(PDF97KB)
NAB68QW Leigh

In the 26 July release, NAB noted that impacted accounts had been reviewed for suspicious activity ‘over and above our rigorous normal checks’.

(a) How many times, and at what intervals, were the impacted accounts again reviewed for suspicious activity ‘over and above’ the ‘rigorous normal checks’ that NAB maintains at all times?

(b) NAB offered to cover costs of independent fraud detection services and the reissuing of government documents for impacted customers:

(i) How many of the 13,000 impacted customers took up NAB’s offer?

(ii) What was the cost of this to NAB?

(iii) How was NAB’s offer to cover costs communicated to customers?

(c) How was NAB’s advice to impacted customers ‘that they do not need to take any action with their account‘ communicated to customers?

(i) Please provide a copy of the email and letter NAB sent to impacted customers.

(d) After this incident, did the Office of the Australian Information Commissioner issue any advice to NAB on meeting its obligations to customers in dealing with personal information?

Written

(14 April 2021)
(PDF126KB)

Attachment
(PDF282KB)

NAB70QW Wilson

Of the shareholdings in your bank, at your five most recent Annual General Meetings, what is:

(a) The total number of shares eligible to be exercised for voting?

(b) The total number of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) in total?

(c) The total percentage of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) the total percentage of all shareholdings exercised?

Written (23 December 2020)
(PDF344KB)
NAB71QW Wilson For each year over the last fifty years, what has been the share of lending the bank has provided to finance real estate? Written (4 February 2021)
(PDF147KB
NAB72QW Leigh In his sentencing remarks relating to Rosemary Rodgers criminal activities while Chief of Staff at NAB, Judge Paul Conlon noted: ‘I find it absolutely staggering that this fraud were not detected by some appropriate system of internal auditing by NAB’.

(a) Would NAB’s internal accountability and governance mechanisms have discovered this activity without the tip off of an external whistleblower?

(b) How were the accountability systems around NAB’s internal budgeting developed?

(c) Why did they fail?

(d) Have shareholders communicated similar feelings to those expressed by Judge Conlon to the Board and Executive?

(e) Are the Board and executive team satisfied that internal governance and accountability has been adequately prioritised in NAB’s corporate culture?

(f) Do NAB human resources protocols have any safeguards or ‘health checks’ to identify – both on entry and throughout a career – staff at risk of compromising fiscal rigour for personal gain?
Written (2 March 2021)
(PDF133KB)
NAB73QON Wilson CHAIR: Thank you. Let's get on to some of the issues you're seeing with small business and consumer behaviour. Firstly, what are you seeing as a consequence of the roll-off of JobKeeper? Some people predicted dire consequences. Yesterday we largely heard from the two banks that presented before this committee that it's had a marginal effect on consumer spending and confidence and also employment. But you obviously have access to earlier data. I know because your chief economist occasionally presents them at events in my electorate. What are you seeing?

Mr McEwan: I'm happy to table this for committee members after the session. We can give you the statistics at the end of February, broken down into each of the categories of employment across states, to show what were the business categories that were still using JobKeeper for support at the end of February. There was a slight drop-off in the usage of JobKeeper from January. From 3.67 per cent of the businesses, it reduced to 3.62 per cent of the businesses by the end of February. I don't, unfortunately, have the March stats of usage, but it was declining.

CHAIR: Is it possible we could get those on notice when they become available?

Mr McEwan: Yes, absolutely.
Hansard p. 3
16 April 2021
(27 May 2021)
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PDF133KB)
NAB74QON
Wilson CHAIR: You won't have the specifics—I'm sure it's different for individual businesses—but are you picking up any trends around the choices of small business to borrow and reinvest in their business or is it cash flow?

Mr McEwan: We are seeing a resurgence in areas like agriculture, which is having some very good times. I've got stats here on those, for example on equipment purchases in Australian businesses. Tractors are up by 146 per cent. Irrigation equipment is up 217 per cent. Earthmoving is up 133 per cent. Forklifts are up by 216 per cent. These are all productive activities. The interesting one, of course, is we are drinking a lot more coffee and coffee machines are up 155 per cent. There's something interesting going on there. You are seeing productive activity starting to happen.

...

Mr McEwan: I'm happy to give the committee other details of what we're seeing, but what we're also seeing—and we've talked about it being an uneven recovery—is that some businesses have done very well and therefore are paying down their loans much faster than we would have normally anticipated. So the growth in a bank's book may not be associated with what's happening here, in the sense that there's also a lot of pay-down happening. For example, those in the agriculture sector, as I raised in my opening comments, are paying down debts in good times, as they do, and there are other businesses doing exactly the same. So, whilst our lending applications, approvals and flow-through are very strong, there's a lot of cash in the system as people are paying down their debts as well.
Hansard pp. 4-5
16 April 2021
(27 May 2021)
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PDF111KB)
NAB75QON
Wilson CHAIR: So they were making repayments up until COVID, and then you've contacted them, with NAB Assist, moving off deferrals, which they've agreed to, and now they can't be contacted?

Mr Dooley: We've made contact and they're not responding.

Mr McEwan: Just to be clear: this group, pre COVID, were making payment; they went into deferral and have come out of deferral and they are not making payment, and they are—

CHAIR: Non-contactable?

Mr McEwan: non-contactable. And the majority of those are investors—lending for homes—which is an interesting position in itself.

CHAIR: How many people are these phantom investors?

Mr McEwan: Do you have the number there, Shaun?

Mr Dooley: There would be probably less than a thousand. I'd have to do the maths and come back to you, but it's—
Hansard p. 5
16 April 2021
(27 May 2021)
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PDF141KB)
NAB76QON
Wilson CHAIR: When you say 100 million a month, I think that number would shock a lot of people, including me. You obviously recognise that a lot of those examples are automated and repeat from essentially the same source. If you take that out in terms of scale and go back down to something more concrete, what's the number of repeated attacks? The point of origin is what I mean.

Mr Dooley: Yes. We'll probably have to take that on notice in terms of trying to understand whether they are coming from one source or multiple sources. I think the point is that we're under constant threat, as our customers are, from criminals using technology.
Hansard p. 8
16 April 2021
(27 May 2021)
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PDF111KB)
NAB77QON
Hammond Ms HAMMOND: You might need to take this on notice. What proportion of small and medium sized business loans are secured with mortgages over family homes?

Mr Dooley: I might have to take that one on notice and come back to you with the exact numbers.

Ms HAMMOND: Just off the top of your head, is it a regular practice?

Mr Dooley: I think many small business customers will secure their loans through some form of security. That could be a residential property. It could be a commercial property. It could be other forms of security.

Mr McEwan: You'll find it is quite a large number, and many use that security so that the lending is cheaper for them. It's their way of effective equity involvement in their business. We'll come back to you with that number, but you'll find it is quite a high number, particularly in the small and medium sized parts of the marketplace.
Hansard p. 23
16 April 2021
(27 May 2021)
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PDF88KB)
NAB78QON
Mulino Dr MULINO: The government has committed to tranche 2, and the FATF has recommended action in that space, as it has in other countries. So I think that, from a policy perspective, there's not a great controversy there, but it's yet to be enacted. Do you support enacting tranche 2?

Mr McEwan: Do you have a view on that one?

Mr Dooley: I think what we would say is that the environment which we're dealing with continues to get more and more challenging and complex. In any sort of complex situation, making the regulation and the law around that simpler for everyone is going to be a better outcome. In terms of the specific question on tranche 2 and FATF, we might have to come back to you on that on notice.

Dr MULINO: That would be appreciated.
Hansard p. 26
16 April 2021
(27 May 2021)
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PDF89KB)
NAB79QON
Leigh Dr LEIGH: Would you commit to sharing with the committee the share of NAB employees who say that they've experienced sexual harassment, as according to your survey?

Mr McEwan: Yes. I'm happy to give the committee the stats that we've had, and I'll just make sure that we get them over the right period of time. Right now, we've got two open sexual harassment cases, and in 2020 we had something like 20 complaints of sexual harassment investigated.

Dr LEIGH: But we know that those figures are going to be an underestimate of total experiences, because most sexual harassment isn't reported, so the figures from your survey I think would be very informative.
Hansard p. 28
16 April 2021
(27 May 2021)
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PDF92KB)
NAB80QW
Leigh

Consumer Data Right
(a) How many customers have requested that their data be shared with accredited data recipients through the Consumer Data Right regime?

(b) How long, on average, does it take for the bank to transfer data to accredited data recipients after it has been requested by customers?

(c) What strategies or processes has the bank implemented to overcome the following challenges with Consumer Data Right:

(i) The critical challenge of low consumer trust in the Consumer Data Right system;
(ii) Managing consent; in particular, balancing the need for consumers to understand what they are consenting to without being deterred by excessively complex procedures; and
(iii) The risk of data breaches.

Written (27 May 2021)
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PDF109KB)
NAB81QW
Leigh

Consumer credit insurance
(a) Does your bank sell consumer credit insurance? If so:

(i) Why?
(ii) Does your bank sell consumer credit insurance on home loans? If so, what is the cents in the dollar payout ratio?

(b) If your bank once sold consumer credit insurance products but has stopped selling these products, what has your bank done to remediate customers who paid for these products in the past?

Written (27 May 2021)
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PDF107KB)
NAB82QW
Leigh Remediation
(a) What processes are in place for situations where the bank has identified remediation commitments but cannot find or contact the person?

(b) What does the bank do with these funds?
Written (27 May 2021)
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PDF110KB)
NAB83QW
Leigh Branch closures
(a) How many branches will you have at the end of 2021?

(b) For the branch closures that have taken place or are scheduled to take place during 2020 and 2021, please provide the postcode of the branch and an indication of whether the location is regional, suburban or metropolitan.

(c) For the branch closures that have taken place in 2020 and 2021, were there other branches in the postcode that remained open?
Written (27 May 2021)
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PDF139KB)
NAB84QW
Leigh Business loans
(a) Are you required to follow responsible lending laws for loans that are predominantly for a business purpose?

(b) Is that requirement different if the family home is being used as security for the business loan?
Written (27 May 2021)
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PDF85KB)
NAB85QW
Leigh Lending practices and coercive control
(a) What elements of the loan application process are in place to identify and mitigate the risk that the bank is party to coercive control practices?

(b) Does the bank seek specific information from potential borrowers to identify signs of coercive control practices or financial abuse?
Written (27 May 2021)
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PDF108KB)
NAB86QW
Wilson For each financial year over the past decade, please outline the number and percentage of first home owner mortgages that:

(a) have a guarantor?

(b) have lenders mortgage insurance?
Written (27 May 2021)
(
PDF92KB)
NAB87QW
Wilson For each financial year over the past decade, please outline the number and percentage of first home owner mortgages at your bank that are used for:

(a) building new properties?

(b) purchasing established properties?
Written (27 May 2021)
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PDF91KB)
NAB88QW
Wilson What regulatory changes would be necessary to enable banks to lend to individuals with SMSFs, who are in the retirement phase, to allow them to seek credit for the purchase of assets (such as homes) or to address short-term cash flow issues?
Written (27 May 2021)
(
PDF85KB)
NAB89QW
Wilson At the last round of hearings your bank stated that it could devise a product that utilises superannuation as a form of security to enable Australians to purchase a first home. To do so, please advise what legislative change would be required to enable you to do so?
Written (27 May 2021)
(
PDF116KB)
NAB90QW
Wilson Pension Loans Scheme
The Pension Loans Scheme (PLS) is a Government scheme that allows older Australians, who own real estate in Australia, to get a voluntary non-taxable fortnightly loan from the Government to supplement their retirement income.

(a) Do you allow customers to use a property that has an existing mortgage or reverse mortgage with your bank as security for the PLS? If not, why?

(b) Do you allow the Government to lodge a caveat for the PLS against the title of a property that has an existing mortgage or reverse mortgage with your bank? If not, why?
Written (27 May 2021)
(
PDF106KB)
NAB91QW
Wilson

Home loan approval timeframes
For all home loan applications you have received in the quarter ending 31 March 2021 (regardless of whether the application was settled):

(a) What is the average and median time from receipt of application by the bank to final approval, for applications received directly through your branch network?

(b) What is the average and median time from receipt of application by the bank to final approval, for applications received through a mortgage broker?

(c) If there is a difference in average and median time from receipt by the bank to approval for applications received through the branch network compared to the those received through a mortgage broker:

(i) What is the reason for the difference?
(ii) How might this impact the competitiveness of mortgage brokers?
(iii) What is the bank doing to equalise the difference in times?

(d) Is an application received through the branch network processed differently from an application received through a mortgage broker? If so:

(i) What is the reason for the difference?
(ii) Is this difference informed by bank policy? If so, why?

Written (27 May 2021)
(
PDF164KB)
NAB93QW
Wilson

For the past five years, please advise:

(a) the number and percentage of total mortgages for principal places of residence that are:

(i) variable only
(ii) variable and fixed
(iii) fixed only

(b) the number and percentage of total mortgages for investment properties that are:

(i) variable only
(ii) variable and fixed
(iii) fixed only

Written (8 September 2021)
(PDF128KB)
NAB94QW
Wilson

Since March 2020, please advise:

(a) the number and percentage of new mortgages for principal places of residence that are:

(i) variable only
(ii) variable and fixed
(iii) fixed only

Written (8 September 2021)
(PDF122KB)
NAB95QW
Wilson

For mortgages that have been fixed since March 2020:

(a) what percentage of new mortgages for principal places of residence were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

(b) what percentage of existing mortgages for principal places of residence were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

(c) what percentage of new mortgages for investment properties were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

(d) what percentage of existing mortgages for investment properties were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

Written
(2 September 2021)
(PDF132KB)
NAB96QW
Wilson
(a) What percentage of total mortgages for principal places of residence are currently interest only?

(b) How many existing customers have chosen to switch to an interest only mortgage for their principal place of residence?
Written
(2 September 2021)
(PDF122KB)
NAB97QW
Wilson

Banking services in the Pacific Islands

(a) Please list the countries in the Pacific Islands where your bank currently provides banking services.

(i) Please outline what banking services are offered in each of these countries.

(b) Are there any countries in the Pacific Islands where your bank provided banking services in the past 5 years but no longer provides banking services?

(c) If you have stopped providing banking services to any Pacific Island country, please list the name of the country and for each country explain:

(i) the reason for ending banking services;

(ii) whether the cost of meeting Australian AML/CTF requirements contributed to your decision to stop providing banking services.

Written
(2 September 2021)
(PDF124KB)
NAB98QON
Leigh Dr LEIGH: I will finish with a final question: what share of your employees are currently based overseas?

Mr McEwan: It's a small level, because it will be our corporate institutional bank up in the US, the UK, soon to be in Europe, Asia—

Mr Dooley: And New Zealand of course.

Mr McEwan: Are you including or excluding New Zealand for that matter?

Dr LEIGH: If you don't have the information at your fingertips, I would be grateful for a breakdown of the global footprint.

Mr Dooley: Excluding New Zealand, the number of employees that we'd have offshore would be less than 500, or about that number. I could pretty much tell you by office, actually, if you want?

Mr McEwan: I think it would be best to get it to you on notice, Dr Leigh.

Mr Dooley: But, as a percentage of our 33,000 employees, it's pretty small.

Mr McEwan: It's pretty small. We'll get you that on notice, so we get you the actual detail.

Hansard p. 15

9 September 2021

(20 October 2021)
(PDF59KB)
NAB99QON
Hammond Ms HAMMOND: Linking that, then, to Dr Leigh's question about how many of the first home buyers might actually be using money from parents, you don't have that statistic, do you? It might not be at your level, but I know that your philosophy is also 'know your customer', so I'm assuming that, when mortgages are given to first home buyers, whoever is approving the mortgage would know where the deposit is coming from?

Mr McEwan: Yes, that's right. I just don't have that today with me. We'll see what detail we can get on whether we're capturing it. We have to capture it at the customer level, but then translate it into the overarching details that we have. I don't have that with me today, sorry.

Hansard p. 16

9 September 2021

(20 October 2021)
(PDF49KB)
NAB100QON
Mulino Dr MULINO: Given the time constraints, could I ask you to provide on notice some high-level stats in relation to, for example, increasing the investment in people—the headcount that's devoted to particular high-risk areas—and other areas of resources that you have devoted. As you say, KYC is one of the particular areas. I'm interested in a summary of how your investment of resources in this space is tracking over time.

Hansard p. 19

9 September 2021

(20 October 2021)
(PDF60KB)
NAB101QON
Simmonds Mr SIMMONDS: One of the things about going last, or close to last, is that quite a few topics have been covered already. Firstly, does the NAB have leave provisions for couples who suffer miscarriages?

Hansard p. 26

9 September 2021

(20 October 2021)
(PDF37KB)
NAB102QON
Simmonds Mr SIMMONDS: Can you give me some assurance? How many people have you actually debanked because of your processes? Have you got some figures around that?
Mr McEwan: Yes, we have, and we're happy to give those to you, on notice.

Hansard p. 27

9 September 2021

(20 October 2021)
(PDF40KB)
NAB103QW
Mulino Can a list detailing all dividends received by NAB from MLC over the past eight years please be provided, preferably in Microsoft Excel format if possible?
Written (20 October 2021)
(PDF124KB)
NAB104QW
Mulino What direct financial benefit did the members of superannuation funds managed by MLC gain from these dividend payments?
Written
(20 October 2021)
(PDF99KB)
NAB105QW
Mulino
With reference to NAB’s recent sale of MLC to IOOF, what criteria and process did NAB adopt to ensure the sale to IOOF would be in the best interests of members of MLC superannuation funds, before agreeing to proceed with that sale?
Written
(20 October 2021)
(PDF57KB)
NAB106QW
Mulino
What role did the revelations about IOOF’s culture and conduct exposed by the Hayne Royal Commission play in the criteria and process referred to in 3?
Written
(20 October 2021)
(PDF38KB)

 

Commonwealth Bank of Australia

Q No. Member Question Hansard page
and Hearing date
or Written questions

Response

(Publication date)

CBA1QW

Wilson

Regarding principal and interest mortgages:            

(a) How many do you currently provide, and what is their total dollar value?

(b) What is their percentage of your total mortgage products provided?

(c) When the board decides to cut interest rates is the reduction automatically passed through to mortgage holders through lowerrepayments, or when the board decides to cut interest rates is thereduction in repayments only passed through on request of theholder with the gap paying off additional principal?

(d) If the latter, how many mortgage holders have requested areduction in repayments as a percentage of principal and interestmortgage holders?

(e) For the last two rate cuts, what was the aggregate dollar valuereduction in interest repayments compared to each previous month?

Written           

(PDF 86KB)

CBA2QW

Wilson

Regarding interest-only mortgages:

(a) How many do you currently provide, and what is their nominalvalue?

(b) What is their percentage of your total mortgage products provided?

(c) For the last two rate cuts, what was the aggregate dollar valuereduction in interest repayments compared to each previousmonth?

Written (PDF 70KB)

CBA3QW

Wilson

Regarding interest-bearing deposits:

(a) How many deposits are currently held, and what is their aggregate value?

(b) For deposits held, what was their aggregate dollar value in each ofthe last six months?

(c) For interest payments, what was the dollar value paid in each of the last six months?

(d) What has been the reduction in interest payments resulting from the last two interest rate cuts?

Written (PDF 76KB)

CBA4QW

Wilson

Over the past six months can you please outline for each month:

(a) The standard variable interest rate(s) for a principal and interestmortgage

(b) The standard variable rate(s) for an interest only mortgage

(c) The standard fixed interest rate(s) for a principal and interestmortgage

(d)The standard fixed rate(s) for an interest only mortgage

(e) The interest rate(s) for term deposits

(f)The interest rate(s) for any other interest-bearing deposit products.

Written (PDF 201KB)

CBA5QON Wilson

CHAIR:  How many class actions are currently being taken against the CBA?

CHAIR: Could you do us a favour and put all those on notice?

Mr Cohen:  Certainly.

Hansard p. 34

8 November 2019

(PDF 58KB)
CBA6QON Wilson

CHAIR:  What time frame would that be?

Mr Comyn:  I believe it's over this financial year, but I'd need to double-check that for you.

CHAIR:  That would be good if you could do so. Since you have the technology, have the capacity, what is the rate of deployment so far as a share of the overall use of merchant facilities?

Mr Comyn:  I'm sorry, I'd have to take that on notice. I think we moved to lowest-cost routing about three or four months ago. I'd have to check and determine what proportion now are on that as a default option.

Hansard p. 35

8 November 2019

(PDF 62KB)
CBA7QON Falinski

Mr FALINSKI:  Mr Comyn, how much money would the Commonwealth Bank lend for the purposes of property development in the Australian marketplace?

CHAIR:  Mr Falinski has dropped off the line, but, Mr Comyn, you can still answer the question.

Mr Comyn:  I don't think I could give a precise answer. I think it would be in the order of $30 billion.

Mr Cohen:  Probably. We'd have to check to get the precise details.

Hansard p. 39

8 November 2019

(PDF 74KB)
CBA8QON Mulino

Dr MULINO:  Thanks for your previous answer. Just to clarify: was the 28 per cent you mentioned of the marginal additional dollars that would be spent, rather than a 28 per cent increase in spending per se?

Mr Comyn:  My recollection of the analysis that was done is that there was an examination of the expenditure across those accounts pre the tax change and an examination of the expenditure post the change, and the delta between the two was 28 per cent. That's an average; obviously there would have been some variation across that population.

Dr MULINO:  Are you able to share any of that analysis

Mr Comyn:  Yes.

Hansard p. 42

8 November 2019

(PDF 215KB)
CBA9QON Mulino

Dr MULINO:  Would you be able to provide a breakdown on notice of the key—[details of remediation by category]

Mr Comyn: Yes, we are very happy to. There would be some greater disclosure than I just gave in our full-year results, but I'm happy to provide it—no problem.

Hansard p. 42

8 November 2019

(PDF 65KB)
CBA10QW Mulino

Dr MULINO:  Are you aware of whether you've undertaken analysis in the past in relation to previous tranches of tax cuts, and whether the amount of spending out of this one differed?

Mr Comyn:  Not that I've seen, but I could certainly make inquiries.

Hansard p. 42

8 November 2019

(PDF 58KB)
CBA11QON Wilson

CHAIR:  This was raised with me by a constituent literally last night. They advised me that it's 30 days from the end of the month. If, for instance, an invoice were issued on 1 November, it wouldn't have to be paid until the end of December. Can I clarify whether that's accurate or will you report back to me on notice?

Mr Comyn:  That's not my understanding but I am very happy to clarify and report back/

Hansard p. 50

8 November 2019

(PDF 72KB)
CBA12QON Leigh

Dr LEIGH:  My trouble is that, unless I know the denominator, I don't really have a handle on the policy impact. If the denominator is $500 a month then you're getting an impact which is 28 per cent of $500, so that's in the order of about $100, and now we've got a marginal propensity to consume, out of a $1,000 tax refund, of about 0.1. If it's $3,000 then suddenly you've got one. Could you come back to us on that. It is pretty policy-relevant as we debate whether or not the middle-income tax cuts should be brought forward.

Mr Comyn:  That's not my understanding but I am very happy to clarify and report back.

Hansard p. 54

8 November 2019

(PDF 61KB)
CBA13QON Leigh

Dr LEIGH:  If you were to go onto the TransferWise website, they would tell you not the formula but the cost. The difference between the way in which they relate to their customers and the way you relate, as I understand it, is that you would say, 'Here's our flat fee, and here's the formula through which we calculate the exchange rate spread,' but you'd leave it up to the customer to do the maths, while they would say, 'If you want to transfer $1,000 across, it's going to cost you $27 to do the transaction.' That seems the appropriate level of transparency to provide in this instance.

Mr Comyn:  Certainly, in some of the ways that we serve customers, it's clear what the exchange rate is and what the fee is. I'm happy to take it on notice to go and have a look at that.

Hansard p. 58

8 November 2019

(PDF 248KB)
CBA14QW Wilson A copy of the bank’s payment term policy or policies. Written (PDF 74KB)
CBA15QW Wilson

With reference to the bank’s payment term policy or policies that the bank applies to its suppliers of goods and services, and customers of its goods and services:

(a) whether they are consistent between the purchase and sale of goods and services?

(b) in reference to (a), if not, why not?

(c) in reference to (a), if not, will the bank bring them into consistency?

Written (PDF 74KB)
CBA16QW Wilson

A copy of the valuation policies that the bank applies to:

(a) infrastructure investments.

(b) large commercial investments or like commercial investments, including definitions that lead to their classification as a large commercial or like commercial investments.

Written (PDF 91KB)
CBA17QW Wilson

Whether the valuations on infrastructure investments finances by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?

Written (PDF 83KB)
CBA18QW Wilson

Whether the valuations on large commercial investments or like large commercial investments financed by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?

Written (PDF 74KB)
CBA19QW Wilson A copy of the bank’s model litigant standards applied to legal proceedings? Written (PDF 380KB)
CBA20QW Wilson How many class actions are you currently facing, and can you please provide a summary of each case brought against the bank? Written (PDF 77KB)
CBA21QW Leigh

At the 15 November committee hearing, NAB told the Committee that over the last 12 months it has contacted all mortgage holders asking if they would like to review their home loan products.

Has your bank undertaken any similar proactive outreach to ensure your customers are happy with their products and aware of alternatives?

Written (PDF 401KB)
CBA22QW Leigh

Of existing customers who switch to better lending arrangements within your bank, could you share any broad data you have regarding the size of their loan (at the time of changing), the duration of their loan up to that point, their income bracket, their location, and their age?

Alternatively, could you indicate if the customers who change tend to share a particular demographic profile? If that information could be provided overall, but also separately depending on whether the customer changed their lending arrangements after unsolicited contact from the bank (after a rate change for example) or as a result of contact they initiated with the bank, it would be appreciated.

Written (PDF 420KB)
CBA23QW Wilson

Anti-money laundering:

(a) Can you please provide a copy of your anti-money laundering, or like, policy?

(b) How many cases have you reported to AUSTRAC over the past decade?

(d) Can you please provide an update on your initiatives, including details of programs, staff numbers and financial resources toward initiatives to combat:

(i) money laundering?

(ii) terrorist financing?

(iii) organised crime?

(iv) human trafficking?

(v) child exploitation?

(vi) crimes of a sexual nature?

(vii) other serious crimes not captured by (i) – (vi)?

(f) Please outline the occasions you have reported to AUSTRAC on an ad hoc basis over the past decade?

(g) Over the past decade, how many AUSTRAC investigations into the bank have been:

(i) opened

(ii) completed with penalties

(iii) completed without penalties

(iv) abandoned


(h) How many fines have been paid to AUSTRAC over the past decade, and what were their values?

(i) Have any AUSTRAC notifications or investigations resulted in terminations of employment or other penalties for employees?

(j) Have any AUSTRAC notifications or investigations resulted in terminations of employment or other penalties for executives?

(k) What staff training is provided to assist anti-money laundering and other serious crime detection?

Written (PDF 744KB)
CBA24QW Wilson

Merchant facilities and low cost routing:

(a) Do you provide merchant facilities, and if so, to how many customers?

(b) Would your small and medium business customers save money if they moved to low cost routing, and if so, do you actively encourage customers to switch?

(c) If so, how do you encourage small and medium business customers to switch to low cost routing?

(d) Do you think all small and medium business customers should be on low cost routing?

(e) What are the fee structures for different merchant services available, including low cost routing options?

(g) What is the annual revenue received from small and medium business merchant services over the past decade?

(h) What number and share (percentage of total) of merchant services for all customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?

(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?

(i) What number and share (percentage of total) of merchant services for small and medium business customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?

(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?        

Written (PDF 401KB)
CBA25QW Wilson Interest rates:

(a) Regarding principal and interest mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(b) Regarding interest-only mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(c) Regarding interest-bearing deposits, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?
Written (PDF 516KB)
CBA26QW Wilson Terminations for misconduct:

(a) How many employees does the bank have?

(b) How do you define employee misconduct?

(c) How many employees have been cautioned for misconduct over the past five years?

(d) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years?

(e) How many employees have been terminated for misconduct over the past five years?

(f) How many employees have been cautioned for misconduct over the past five years, as a share of all employees over that timeframe?

(g) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years, as a share of all employees over that timeframe?

(h) How many employees have been terminated for misconduct over the past five years, as a share of all employees over that timeframe?

(i) What are the processes available for whistle-blowers into misconduct within the bank?
Written

(8 April 2020)
(PDF 500KB)

CBA27QW Wilson Of the twenty highest remunerated employees over the past decade, please provide the number whose total remuneration in a financial year (including all forms of remuneration, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets?
Written

(8 April 2020)
(PDF 442KB)

CBA28QW
Wilson
Of the twenty highest incentive bonuses paid over the past decade, please provide the number that fall within these brackets?
Written

(8 April 2020)
(PDF 447KB)

CBA29QW
Wilson
Of the twenty highest performance bonuses paid over the past decade, please provide the number that fall within these brackets?
Written

(8 April 2020)
(PDF 440KB)

CBA30QW
Wilson
Of the twenty highest severance packages over the past decade, please provide the number whose total package (including all forms of accumulated severance package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets?
Written

(8 April 2020)
(PDF 440KB)

CBA31QW
Wilson Of the twenty highest termination payments over the past decade, please provide the number whose total package (including all forms of accumulated termination package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets?
Written

(8 April 2020)
(PDF 441KB)

CBA32QW
Wilson Of the twenty highest redundancy payments over the past decade, please provide the number whose total package (including all forms of accumulated redundancy package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets?
Written

(8 April 2020)
(PDF 440KB)

CBA33QW Wilson International transfer of funds:

(a) What information does AUSTRAC require for reporting of the international transfer of funds?

(b) What data is required to be input for an international transfer of funds?

(c) What data is required to be input for the verification of an international transfer of funds?

(d) What difference is there between the data required for an international transfer of funds, and a verified international transfer of funds?

(e) What information do you provide to AUSTRAC for reporting of the international transfer of funds?

(f) Do you provide data for verified transactions to AUSTRAC?

(g) Do you provide data for unverified transactions to AUSTRAC?

(h) What difference is there between the data required for an international transfer of funds and the data required for AUSTRAC reporting?

(i) What difference is there between the data required for the verification of an international transfer of funds and the data required for AUSTRAC reporting?
Written (PDF 488KB)
CBA34QW Wilson Impact of Coronavirus:

(a) Has the bank completed any assessment or modelling of the potential impact of Coronavirus on the bank, or the Australian economy?

(b) If yes, can it please be provided?
Written (PDF 383KB)
CBA35QW
Leigh In January 2020, February 2020, March 2020 and April 2020 (to date):

(a) For each month, how many mortgage customers have requested to defer home loan repayments?

(b) For each month, what percentage of all home loan customers do those requesting deferrals account for?

(c) For each month, what is the average debt for home loan customers requesting repayment deferrals?

(d) For each month, what is the average debt for all home loan customers?
Written

(13 May 2020)
(PDF 410KB)

CBA36QW
Leigh Some banks have recently changed the default payment amount for mortgage holders, so that borrowers pay only the minimum amount.

(a) Have you done this?

(b) If so, how many borrowers does it affect?

(c) If not, why have you decided not to take this approach?
Written

(13 May 2020)
(PDF 411KB)

CBA37QW
Leigh
On 31 March, the Australian Financial Review wrote that a branch manager at a big four bank was reported for berating staff who weren’t selling enough of the bank’s products, despite customer-facing employees being fearful of losing their jobs or catching the coronavirus.

(a) Did that report refer to CBA?

(b) If yes, what was done to discipline or counsel the manager?

(c) Have there been any other similar incidents in CBA branches?

(d) Have you since or previously issued directives to managers about appropriate targets and tactics for product sales?
Written

(13 May 2020)
(PDF 408KB)

CBA38QW Leigh Implementation of Coronavirus SME Guarantee Scheme:

(a) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received in total?

(b) How many credit arrangements has your organisation approved through the Coronavirus SME Guarantee Scheme?

(c) In relation to the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities and not-for-profit entities?

(d) How many credit arrangements for charities and not-for-profit entities has your organisation approved through the Coronavirus SME Guarantee Scheme?

(e) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities registered with the ACNC?

(f) How many credit arrangements for charities registered with the ACNC has your organisation approved through the Coronavirus SME Guarantee Scheme?
Written  

(22 June 2020)
(PDF 409KB)

CBA39QW Leigh In the months of March, April and May 2020—how many overdrafts or similar short term credit arrangements (other than those initiated through the Coronavirus SME Guarantee Scheme) has your organisation set up with each of the following overlapping populations:

(a) charities and not-for-profit entities;

(b) ACNC registered charities; and 
Written (22 June 2020)
(PDF 395KB)
CBA40QW Wilson

Westpac has publicly stated that it will defer repayments on credit cards for COVID-19 affected customers (Westpac Freezes Credit Card Charges for COVID-19 hit customers, The Age, 24 April 2020). Therefore, can you please advise:

(a) What processes do you have in place to identify credit card customers who have been impacted by the COVID-19 pandemic?

(b) How many credit card customers have requested deferrals of repayments related to the COVID-19 pandemic?

(c) How many credit card customers have you identified as impacted by the COVID 19 pandemic?

(d) For those credit card customers that you have identified as impacted by the COVID-19 pandemic:

(i) What is the accumulated value of the credit card debt?

(ii) What is the average value of the credit card debt?

(iii) What is the accumulated value of the credit card limit?

(iv) What is the average value of the credit card limit?

(v) What is the accumulated value of the credit card monthly repayments?

(vi) What is the average value of the credit card monthly repayments?

(e) What deferral options are available for credit card customers that you have identified as impacted by the COVID-19 pandemic?

 (i) If none, do you intend on doing so?

Written (22 June 2020)
(PDF339KB)
CBA41QW Bandt CBA has a loan to Adani Abbot Point Terminal (AAPT) maturing in November:

(a) Has CBA taken part or will it take part in any refinancing of AAPT?

(b) Considering AAPT plays an essential role in the development of the new Carmichael thermal coal mine, and the mine would not be viable without it, does CBA consider AAPT to be part of the Carmichael project?

(c) When looking at whether a project is in line with CBA’s policies, does CBA look at all relevant pieces of infrastructure that project requires to proceed?
Written (30 July 2020)
(PDF493KB)
CBA42QW Wilson

Merchant services and low cost routing:

(a) In terms of your Point of Sale (POS) strategic merchant services:

(i) What is the total number of your POS strategic merchant services customers?

(ii) What is the number of small and medium business customers?


(b) What number and share (percentage of total) of your total strategic merchant services customers and number and share of small and medium business merchant services customers:

(i) Use the Least Cost Routing (LCR) or Merchant Choice Routing (MRC) option for multi-network debit transactions?

(ii) Have a contract for the lowest cost routing option, when including all fees associated with the transaction including interchange and scheme fees?


(c) Is LCR or MCR on multi-network debit transactions offered to all customers as an opt-out option to ensure all get access to savings? If not:

 (i) Why?

(ii) Considering that the Reserve Bank of Australia has advocated LCR since 2013, why have you not found a way provide this service and the associated cost savings to all of your merchant services customers?

(iii) Do you believe you are acting in your merchants’ best interests by not passing on possible savings?


(d) Are LCR or MCR services offered on all terminal types for multi-network debit transactions? If not:

(i) Which terminal types do not have LCR or MCR?

(ii) What percentage of your terminal fleet does this represent?

(iii) When do you plan to upgrade those terminal types that do not have LCR or MCR to enable those merchants with those terminal types to access LCR or MCR?


(e) Are LCR or MCR services offered on all pricing plans for multi-network debit transactions? If not:

(i) Which pricing plans do not have LCR or MCR as an option?

(ii) What percentage of your small and medium business merchant customers are on these plans?

(iii) Why?


(f) If you provided all your strategic and small and medium business POS merchant services customers access to the lowest cost scheme on all multi-network debit transactions, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?


(g) If you passed on at POS the lowest cost per transaction via dynamic routing to your merchants, based upon current and eftpos 1 July 2020 pricing, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?


(h) Are any additional fees or charges, such as terminal rental, added or increased for small and medium business merchant customers who elect to implement LCR or MCR?

(i) If so, why?

 (ii) Do you increase the average eftpos transaction fee for customers who choose to use LCR or MCR compared to other plans? Why?

(iii) Does a customer’s choice to use LCR or MCR for debit transactions impact the fees you charge for credit transactions for any of your merchant customers? Why?

Written (30 July 2020)
(PDF453KB)
CBA43QW Wilson

Acquiring merchant facilities:

(a) Please provide details for debit transactions through your Acquiring merchant facilities for calendar year 2019 and calendar year 2020 (to date) including:

(i) The total number?

(ii) In dollar terms?

(iii) Total fees received by the bank?


(b) Please provide details for debit transactions through your Acquiring merchant facilities for financial year 2018/2019 and financial year 2019/2020 (to date):

(i) The total number?

(ii) In dollar terms?

(iii) Total fees received by the bank?


(c) Please outline the schemes that provide debit card payments services currently contracted by the bank, including:

(i) The name of the card payments service provider.

(ii) The length of their current contract.

(iii) How far through the contract the bank currently is.

(iv) How much of the contract remains.

(v) Whether the contract involves the provision of card payments with debit, credit or other products.

(vi) Whether the contract applies incentive payment arrangements based on volume of processed transactions or other performance criteria per payment type or as an aggregate volume.

(vii) Details of the ‘profit’ or ‘premium’ charged to the business between the cost of the transaction fees charged to the acquiring bank by various schemes, and the transaction fees charged to small and medium business customers by the acquiring bank, including interchange, scheme fees, acquirer margin and terminal rental.

Written (30 July 2020)
(PDF438KB)
CBA44QW Wilson

For each provider, provide the following information based on the method of calculation for each merchant category type in your debit Acquiring portfolio:

(a) Contracted provider (e.g. Visa)

(b) Interchange fee (e.g. 0.04 per transaction)

(c) Scheme fee based on an $40 transaction (e.g. $0.01 per transaction for first twenty transactions, then $0.02 for every transaction thereafter)

(d) Acquirer costs and margin (e.g. 1 per cent of transaction)

(e) Any other cost (i.e. any fee not listed above)

(f) Any ‘profit’ or ‘premium’ charged in addition by the bank that is passed onto the merchant (i.e. any fee not listed above)

(g) What is the total retail cost charged to merchant customers for each merchant category and each debit scheme, not including volume incentive payments for the following transactions:

(i) $5

(ii) $20

(iii) $40

(iv) $100

(v) $1,000


(h) What is the total Acquiring wholesale cost for each merchant category and each debit scheme, not including volume incentive payments for the following transactions?

(i) $5

(ii) $20

(iii) $40

(iv) $100

(v) $1,000

Written (30 July 2020)
(PDF412KB)
CBA45QW Wilson Eftpos:

(a) Do you intend to pass on savings from the eftpos interchange wholesale repricing for routed multi-network debit card transactions that is being introduced on 1 July? If so, how much of the 2 cent reduction per transaction will be passed on?

(b) When do you intend to turn on all eftpos digital messages?

(c) Have you turned on at least the low risk transactions such as card on file and D&W that were technically available in 2018? If not, why?

(d) Do you believe turning on digital for eftpos will create more price competition and place issuer income at risk? If so, is this one of the reasons you have been slow to launch eftpos digital?

(e) Do you think you are acting in your merchants’ best interests by not turning on eftpos digital transactions sooner?
Written (30 July 2020)
(PDF406KB)
CBA46QW Wilson

In the context of an exchange that occurred during the House of Representatives’ Standing Committee on Economics’ hearing with the Reserve Bank Governor and the Member for Mackellar on 14 August 2020:

Mr FALINSKI: And I congratulate you for drawing attention to something that people have deliberately ignored for too long, but while we're on the point of bad regulations and unintended consequences, we, the federal parliament, introduced not long ago responsible lending obligations, which essentially have the principle that the lender is responsible for decisions that the borrower makes. Is it your evidence to this committee and to the parliament that that law is not having any impact on credit creation and lending to small business and to those enterprises that are taking a risk in starting new enterprises?

Mr Lowe: That's not my evidence. I think it is having an effect. Just to go back to the legislation the parliament passed, which at a very high level is eminently reasonable, it says that, when extending credit, the loan can't be unsuitable—who could argue with that?—and in making the loan you've got to take reasonable steps that the borrower can repay. Well, who could disagree with those two broad principles? I find it very hard to disagree with them. What has happened is that those principles have turned into hundreds of pages of guidance. Once the compliance people, the lawyers, the regulators and the media get involved, these high-level principles put in law get turned into a lot of guidance, because people don't want to offend these kinds of regulatory requirements.

Mr FALINSKI: Can I humbly put it to you that you're being very generous. Wasn't it the interpretation of the courts, until the recent ASIC v Westpac case, that what this actually did was put the obligations back on lenders to understand absolutely and completely the capacity of borrowers to service a loan? That's why it turned into hundreds of pages and, when this was tested before the courts, especially the lower courts, that's what they found. I guess that's why we say the principle makes sense but the unintended consequence was that it restricted lending in the Australian capital markets.

Mr Lowe: I agree with you. I think the principles in the legislation are sound, but I think the way we've translated those principles into reality needs looking at again. If we can't do that properly, maybe we need to look at the legislation. We can't have a world in which, if a borrower can't repay the loan, it's always the bank's fault. On a portfolio basis, we want banks to make some loans that actually go bad, because if a bank never makes a loan that goes bad it means it's not extending enough credit. The pendulum has probably swung a bit too far to blaming the bank if a loan goes bad, because the bank didn't understand the customer; if it had done proper due diligence—this is the mindset of some—the bank would never have made the loan. So some of the banks have had this mindset, 'Well, we can't make loans that go bad.' I would have to say, though, that in the past three or four months I've heard fewer concerns from the banks about the responsible lending laws. ASIC introduced new guidance. Institutions are gradually coming to grips with those.

Mr FALINSKI: That might be because, under the extraordinary powers we granted the Treasurer, he has given them relief from RLOs.

(a) Can you advise whether the Governor of the Reserve Bank of Australia’s views reflect that of your institution?

(b) Do you agree with the principles established in legislation on responsible lending obligations? If not, which principles and why?

(c) Are there any principles in the legislation that you believe could be amended or replaced that would better enable the bank to provide credit?

(d) Do you agree with ASIC’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(e) Are there any sections in ASIC’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(f) Do you agree with APRA’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(g) Are there any sections in APRA’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(h) Have there been any unintended consequences resulting from the rulings of courts or tribunals that have applied strict interpretations of responsible lending obligations?

(i) Have there been any decisions of courts or tribunals, such as AFCA, that you have chosen to appeal? If so, please provide details.

(j) Have you removed any products as a result of responsible lending obligations?

(k) Since 2008, what debt products have you removed from your product list as a result of responsible lending obligations?

Written (27 October 2020)
(PDF109KB)
CBA47QW Wilson

(a) Have you completed a cost estimation of the impact of implementing responsible lending obligations for:

(i) Your institution? If so, please provide this estimation.

(ii) Your customers? If so, please provide this estimation.


(b) Since the exemption from the responsible lending obligations for small and medium enterprises has been in place:

(i) Have you adjusted your internal processes to assess credit approvals?

(ii) What impact has the exemption had on the bank’s capacity to lend?

(iii) If the exemption has had no effect, why?

(c) Have you seen small and medium enterprises turn to other lines of credit during the coronavirus pandemic? If so, why?

Written (27 October 2020)
(PDF404KB)
CBA48QW Wilson

(a) Do you have any case studies highlighting where responsible lending obligations are inhibiting the provision of credit to individuals, households, or small and medium enterprises? If so, can you provide them to the committee?

(b) Have you estimated the cost of applying the responsible lending obligations? Has it increased the fees and charges for customers? If so, please provide information on how much the average and median fees and charges to customers have increased for the following products:

(i) new mortgages;

(ii) refinancing internal mortgages;

(iii) refinancing transferred mortgages;

(iv) new small and medium enterprise credit;

(v) refinancing and/or rollover internal small and medium enterprise credit; and

(vi) refinancing and/or rollover external small and medium enterprise credit.

(c) Have you estimated the impact of applying the responsible lending obligations on the amount of processing time required from the receipt of an application to approval? Has the required processing time increased? If so, please provide information on how much the average and median processing times have increased for the following products:

(i) new mortgages;

(ii) refinancing internal mortgages;

(iii) refinancing transferred mortgages;

(iv) new small and medium enterprise credit;

(v) refinancing and/or rollover internal small and medium enterprise credit; and

(vi) refinancing and/or rollover external small and medium enterprise credit.

Written (27 October 2020)
(PDF79KB)
CBA48.AQW Wilson Please complete the below table (see following page) for:

(a) new mortgages;

(b) refinancing of internal mortgages;

(c) refinancing of transferred mortgages;

(c) new small and medium enterprise credit;

(d) refinancing and/or rollover of internal small and medium enterprise credit;

(e) refinancing and/or rollover of transferred small and medium enterprise credit?
Written (27 October 2020)
(PDF114KB)
CBA49QW Wilson CHAIR: What measures have the CBA taken for people who've had challenges with credit card debt as a consequence of loss of employment or reduced income throughout the COVID-19 pandemic?

Mr Comyn: A combination of measures from repayment deferrals, but far fewer in number on repayment deferrals for credit cards because they're a very different style of product. Of course, it's a revolving debt facility. A much larger number of customers were in what we would consider to be general hardship, which includes repayment deferrals but also includes a broader range of different outcomes as well.

CHAIR: But, in terms of actual measures you've taken, if somebody has come to the bank and said, 'I have a problem with credit card debt because I have lost my job,' or, 'I have gone from being employed on this salary now to JobKeeper,' have there been clear pathways available to people? What volume of people have come to the bank and raised those issues and have had assistance provided either to move into a different product to manage their debt or to freeze the debt, which is, for instance, what happened in the case of Westpac—they provided pathways for doing so?

Mr Comyn: A combination of things. Particularly during the period of March, April and May, we took steps for customers who hadn't made their minimum repayment. We didn't charge them any interest in the future period. We made sure they weren't penalised for that. In terms of the context of customers who would be on repayment deferrals or who had been on repayment deferrals, that number would be in the thousands. For customers who had gone into financial hardship support, which includes deferrals and a range of other options that you're alluding to, that number would be in the tens of thousands. I couldn't give you the specific number, but I'd be able to.

CHAIR: Could you get us the specific numbers on notice?

Mr Comyn: Sure.
Hansard p.33
4 September 2020
(1 October 2020)
(PDF412KB)
CBA50QON Wilson CHAIR: Alright. I look forward to getting that data. Thank you; that's useful. Banks are obviously going to be a critical part of economic recovery, particularly around SME lending and SME facilities that you have available and backed up by the government. Why is it that you chose to defer the loans of your small business customers on an opt-out basis at the start of the pandemic?

Mr Comyn: Firstly, that was prior to the announcement of JobKeeper. But, in effect, what we were trying to do was make sure that we could reach as many customers as possible and put them in a position such that they could have their repayment deferred from their April repayment, and then, of course, we contacted all of those customers to let them know what we had done, and it made it easy for them to opt back out of that.

CHAIR: In terms of the volume of SME lending under the facility, how many SME customers have actually onboarded recently?

Mr Comyn: From the SME loan guarantees—

CHAIR: Yes.

Mr Comyn: or repayments?

CHAIR: Guarantees.

Mr Comyn: There was $850 million of lending, which is about 50 per cent. I think the average loan size, because it's mostly working capital—many of the customers that we funded were wanting to participate in JobKeeper and needed the funds to be able to pay their employees—was about $85,000. Again, I don't have the specifics, but it will be in that order.

CHAIR: Sorry, say that again.

Mr Comyn: $850 million. The average loan size was $85,000. I know we messaged about 250,000 customers to let them know about the SME loan guarantee scheme. We had approximately 750 people working over the Anzac Day weekend fulfilling requests for customers. So it's certainly in the tens of thousands.

CHAIR: How many have applied versus the number that have been approved?

Mr Comyn: I'd have to get you the exact numbers. Overall, I think the decisioning rate was reasonably high and, I'd say, appropriate given the circumstances. The rate is quite low—it's about 4½ per cent. There certainly would have been some customers that were declined, but, given the circumstances in March and April and the need for customers to be able to pay their employees and then be able to participate in JobKeeper, we certainly tried to facilitate as many of those as we could.
Hansard p.33
4 September 2020
(1 October 2020)
(PDF412KB)
CBA51QON Wilson CHAIR: Going back to the question I asked before about insolvency: you said that there were extra resources, essentially, dedicated to that team. What dollar figure are we talking about?

Mr Comyn: Specifically in terms of business insolvency?

CHAIR: Yes.

Mr Comyn: I couldn't give you the specifics. It would be small. It's a relatively small team in the context of our operation. We've got more than a thousand dealing with customers who need financial assistance in home lending. It would be much, much smaller than that in our business and corporate teams.

CHAIR: Would you say it's a 10or 20 per cent increase in the resources?

Mr Comyn: It would be somewhere in that order.

CHAIR: Somewhere between 10 and 20 per cent?

Mr Comyn: Yes. But from a relatively small team to start with. I'd be happy to get you the exact numbers.
Hansard pp.34-35
4 September 2020
(1 October 2020)
(PDF404KB)
CBA52QON Wilson CHAIR: That would be good. Going on to the issues around corporate culture, because this is obviously one of the things that you should have been able to focus on despite us not being able to pass legislation on the royal commission: culture remains an issue for many financial institutions including, obviously, what has come to light recently about QBE and AMP. Does CBA have any nondisclosure agreements related to issues of staff and allegations such as sexual harassment or equivalent issues of HR?

Mr Comyn: None that I'm aware of.

CHAIR: In an organisation the size of CBA? That's interesting.

Mr Comyn: None that I'm aware of, Mr Wilson.

CHAIR: But you could give me a commitment that you could find out and come back?
Hansard p.35
4 September 2020
(13 October 2020)
(PDF96KB)
CBA53QON Leigh Dr LEIGH: I asked you at the last hearing about the way in which you report the costs of international transactions, and the fact that at the moment your website still offers a flat fee and a formula through which you calculate the exchange rate spread, but not the simple, transparent pricing you'd get from a provider like TransferWise. They would say, 'If you want to move $1,000 overseas, it will cost you $27.' You undertook to provide me with more information, but none of that information went to the transparency of fees and the full fee transparency that's provided by others. Given that these fees are often paid by pretty vulnerable Australians—think about taxi drivers working extra shifts in order to send some money back to Fiji—could you undertake to move to full fee transparency?

Mr Comyn: I'd need to first make sure I completely understand what you mean by full fee transparency, but I have no objection to transparency in this particular area. I don't have the information in front of me that we provided for you, but I'm happy to follow that up. I know that we have reduced by, I think, two percentage points some of the foreign exchange fees that go out specifically to the Pacific islands—you mentioned Fiji. We're conscious this has been an area where we've certainly tried to provide greater transparency. There have been a number of different fee reductions and changes to make sure that our rates are competitive. As you probably appreciate, the volumes at the moment around foreign exchange and notes is greatly reduced.

Dr LEIGH: Full fee transparency is not hard. It just says: if I want to move $1,000, what's the total cost? That's flat fees plus exchange-rate spread. Surely you could provide that?

Mr Comyn: I'm very happy to take that on notice. If we can't, I would need a good reason to explain why we can't. I suspect it may have something to do with the arrangements that might be at the other end with the correspondent bank or wherever we're sending it to, unless we can't accurately estimate what those fees and charges might be. But I'm happy to look into it, as I said.
Hansard p.38
4 September 2020
(1 October 2020)
(PDF412KB)
CBA54QON Falinski Mr FALINSKI: In this transformation program that you've been undertaking, is there any data or are there any insights that you've gained along the way that you think would be useful in terms of design of public policy and legislation that currently applies to the financial sector?

Mr Comyn: There certainly would be. If you wouldn't mind, if I could just go away and think about what would be most helpful and constructive. But, certainly, there are a number of things that we've learnt. We've worked closely as a team with the board. As I said, it's been a substantial program, and we've shared some of those insights and learnings with regulators. I still believe that there is considerable work to do to become simpler as an organisation in terms of the way we serve our customers. There are many aspects of large financial institutions that aren't simple. By and large people act rationally and follow processes, so there's quite a bit more work that we need to do to make sure that we're simplifying the way that we serve our customers in particular.
Hansard p.42
4 September 2020
(1 October 2020)
(PDF407KB)
CBA55QON Mulino Dr MULINO: I will just follow on from—and I'm just going to say this to annoy him—Mr Falinski's question on remediation. I'd be curious. Obviously, there are a number of cases that have been under examination for years, and this is clearly a problem for a lot of people who are waiting upon that money. Every bank that comes before us talks about the fact that they've made provision and they want to get the money out the door. What kinds of concrete steps or changes in the process do you suggest to make this process faster?

Dr MULINO: I have one quick question to put on notice—and I'll ask this of all the banks. I'd appreciate it if you could give a bit of summary data on the average length of time and perhaps some distributional data on how long cases have been under examination.

Mr Comyn: Sure. Specifically within aligned advice or just more broadly around—

Dr MULINO: Whatever data you've got. Breaking it down into the key categories and summary data for each category would be useful.

Mr Comyn: Okay.
Hansard p.45
4 September 2020
(1 October 2020)
(PDF425KB)
CBA56QON Simmonds Mr SIMMONDS: Can I turn to the issue of small transactions being used as a messaging service, particularly around domestic violence situations and things like that. It's something that is of significant concern for me. What steps are the bank taking to identify these kinds of instances?

Mr Comyn: You may be aware that we identified this last year, and one of the team, specifically in our vulnerability area, which David looks after, identified this. We did a lot of work. As your question would suggest, we were horrified to see some of the examples of misuse of our payment services where people were sending abusive and threatening messages. We've done a significant amount of work since then, including amending our terms of use, working closely with the industry to see—and I know that other financial institutions are just as passionate about making sure that this sort of behaviour is eradicated. We've prevented or progressively prevented customers from being able to use certain words as part of the message description, both in our ATMs as well as into our mobile banking app. I don't know, David, if there's anything you want to add?

Mr Cohen: I'd just add this. It's a piece of work we're particularly proud of, because, as Matt mentioned, a member of the team noticed this in one instance. When we dug into it we were horrified to see the extent of it. We looked over a three-month period. We found 8,000 instances where, effectively, violence was being threatened or there was some form of domestic abuse being threatened through the transaction description. That's quite a big number in a short period of time. What we've done since then is we thought it important not just to take steps ourselves to prevent that, such as changing the terms and conditions. We've blocked those sorts of descriptions on our Intelligent Deposit Machines but also in the process of enhancing the blocks that we've got around our NetBank, internet banking and our app, and, most importantly, in making sure the industry as a whole know about it. We did take it to the ABA and it's been really pleasing to see the take-up by other financial institutions who have also become aware of it, have looked into it and are now taking steps as well.

Mr SIMMONDS: I appreciate that, and those are horrifyingly large figures. What kinds of words are you tracking? We heard from ANZ that they are, essentially, tracking swear words. But what about a situation where somebody sends a message like, 'I will kill you'? Are those kinds of things picked up by the bank?

Mr Cohen: Yes. Those are exactly the sorts of things that we're building, at the moment, into, effectively, a dictionary or phrase library of offensive or troublesome phrases and words, and, yes, it does go to threats of violence. It goes to swear words but also just very derogatory names that we see coming through these descriptions. It's quite a broad range. It's not just swear words.

Mr SIMMONDS: So you're building this capacity. What is your view of your ethical responsibilities? Is it to simply cut off the customer from saying those things, is it to cut off the customer's access to be a customer or is it reporting it to the police, in terms of a threat of violence?

Mr Cohen: We have changed the terms and conditions. One of the impacts of that is that if we have customers who abuse our payment systems in order to perpetrate violence or to make threats of violence then we can switch those customers off as customers. So they can no longer bank with us.
The question of reporting to authorities is a slightly more difficult one. We don't at the moment and it's rather difficult to implement real-time monitoring of every transaction that goes through. From our point of view, we're starting off on the basis that, first of all, we want to stop the abuse, where we can. Secondly, we want to stop those customers being customers if they perpetuate it. The step that you're referring to, which is going the next step, is probably something that we would have to look at; it's just the practicality of doing that. I understand the desirability, because it's a serious problem that needs to be stamped out.

Mr SIMMONDS: Okay, that's much appreciated. I'd welcome any information which expands on your answers which you could send me and the rest of the committee on this particular issue…
Hansard p.47
4 September 2020
(1 October 2020)
(PDF495KB)
CBA57QON Simmonds Mr SIMMONDS: Okay. In terms of recovery from the COVID recession: obviously, different states are at different stages and have different policies in place. I've got a view around the Queensland border closures, my state, and how that is particularly hurting the tourism industry. What's the CBA's experience with distressed businesses in Queensland, particularly around the tourism industry?

Mr Comyn: At the moment the substantial federal income support is probably masking some of the underlying stress and so I think it will become more evident, if the borders remain closed, as that income support reduces. There's no question that the Queensland economy has a higher proportion of reliance on tourism and a significant reliance around hospitality, so there have to be some sectors of the business community there that would be suffering from the ongoing border closures and lack of clarity about when those borders may reopen.

Mr SIMMONDS: Have you got any data around insolvencies that you're expecting broken down by state?

Mr Comyn: We don't necessarily have a forecast of insolvencies by state per se, but we have in-depth reviews of individual sectors. Within tourism, retail, hospitality, we look at our exposures and our customers all around the country and, based on what we see as their outlook and forecast, we will then provide for future credit losses accordingly.

Mr SIMMONDS: If any of that data could be provided to the committee, I'd appreciate that…
Hansard p.48
4 September 2020
(1 October 2020)
(PDF151KB)
CBA58QON Wilson CHAIR: Just before we go to a break, I think Mr Simmonds has raised a really interesting line of questioning around identification of conduct which amounts to different types of harassment or violence. I'm just wondering: does CBA have a program in place to identify instances of elder abuse?

Mr Cohen: Yes, Chair, we do. In fact what we've done is we've undertaken training across, particularly, our frontline teams. We've introduced a guide that helps our people but also our customers who understand and identify instances of elder abuse. This is part and parcel of the efforts that we've made over the last 18 months in particular to improve outcomes for vulnerable customers and, obviously, elderly customers do fall into that category, particularly financial abuse of elderly customers.

CHAIR: Would you be prepared to provide that document or that guidance to the committee either on a confidential or public basis?

Mr Cohen: Very happy to.

Mr Comyn: It's a public document, and we're very happy to provide it.
Hansard p.49
4 September 2020
(1 October 2020)
(PDF12,359KB)
CBA59QON Hammond Ms HAMMOND: To what extent do you seek personal guarantees, particularly from young people, from family members or from others as a condition of providing people with loans?

Mr Comyn: I couldn't give you the specific proportion in terms of the number of home loans that we'd make where someone would offer a guarantee. Guarantees are a high-risk area from the bank's perspective. There have been examples in the past where people don't adequately understand the risks of providing the guarantee. We've definitely improved the process, the controls and the checks in place. Unfortunately, sometimes that can manifest itself where perhaps a parent may not have fully understood the documentation their child was providing to them and they don't understand the recourse that's available to an institution when you do provide a guarantee. I'd be happy to look into the exact numbers. I suspect it has reduced, and it's been an area of real focus for us and I think the broader industry over the last several years.
Hansard p.52
4 September 2020
(1 October 2020)
(PDF99KB)
CBA60QON Wilson CHAIR: Sorry, Ms Hammond, can I just interrupt and ask a follow-up question to that because it's contextually relevant? Does the CBA have any data on young home mortgage applicants who get financial assistance from parents or other family members to support their deposit?

Mr Comyn: We would, Chair. It would probably understate the actual numbers. Sometimes you see survey data where people would say what proportion of their homes are being supported by the bank of mum and dad often or family members. Applicants may—obviously, we'd prefer they didn't—disclose their savings as opposed to a gift, but I suspect that parents or family members are helping a substantial proportion of new borrowers in the market at least at some point.

CHAIR: The data suggests that it's always underreported but, on notice, could you get us that data; and, for the secretary, could we ask that of all of the four major banks? Sorry, Ms Hammond.
Hansard p.52
4 September 2020
(1 October 2020)
(PDF94KB)
CBA61QON Hammond Ms HAMMOND: Is it a standard practice of the bank, when SME loans are given, to take security over personal assets?

Mr Comyn: Certainly it is common practice for security to be involved in business lending—not always. Many of the facilities, in terms of working capital overdrafts, tend to be unsecured, but, if we look across our lending book, there is a high proportion of there being security. That ranges from residential security to commercial property security—and, in some cases, secured over particular assets such as equipment, vehicles et cetera.

Ms HAMMOND: Have you identified that as an area of greater risk at this stage for the bank?

Mr Comyn: The risk more precisely around property flows through into both the housing book as well as our commercial lending book. There's no escaping that. Fortunately there was a lot of diversification, particularly across commercial property, you'd appreciate—everything from small retail to commercial property. That can be anything from office to logistics or industrial if I look across our lending book in business. Agriculture, fortunately, is having a good year. In many parts of the country there has been much stronger rainfall, so we're seeing a much better outlook there, which is obviously very good news for our customers in regional areas.

Ms HAMMOND: I would like, if possible, to get some sort of statistics on the SME loans which are secured by homes.

Mr Comyn: Sure. No problem.
Hansard pp.53-54
4 September 2020
(1 October 2020)
(PDF98KB)
CBA62QON Leigh Dr LEIGH: In terms of innovation, the provision of small-business loans has been criticised by COSBOA's Peter Strong and by the Small Business and Family Enterprise Ombudsman, Kate Carnell. One of the proposals that is around is Bruce Chapman's proposal for a revenue-contingent loan, something like a HECS-style loan, to small business. Do you see that as being an innovative model that might have a greater degree of take-up among small businesses?

Mr Comyn: I'm not specifically aware of the loan you're referring to in any detail. I'd be happy to look at it. I think there is a place for both speedy decisions and faster turnaround times of lending and different security types, so less reliance on property in particular. That's a particular area of interest for us. I spoke to the head of COSBOA six or so months ago, but I'm not specifically aware of that. But I'd be happy to look at it.
Hansard p.56
4 September 2020
(1 October 2020)
(PDF98KB)
CBA63QON Leigh Dr LEIGH: You have recently taken a share in the global buy-now pay-later firm Klarna, which is much bigger globally than Afterpay. It has about 90 million users globally compared to 10 million. You've integrated Klarna into your banking app. What has prompted you to move into the buy-now pay-later space? Specifically, what share of Klarna's revenues come from late fees?

Mr Comyn: On the second question, I could happily get the number for you both domestically and globally. It has actually been a focus for Klarna globally. They have, I think, a much lower proportion of late penalty fees, and they're acutely aware of that, but I'd be happy to get that for you separately. Yes, we own just over five per cent of Klarna globally. We're working closely with them domestically. We are much smaller than some of the established buy-now pay-later players who've been in this market for much longer. Clearly, we saw a strategic gap or opportunity there, with the growth of buy-now pay-later. It has certainly well exceeded our expectations from many years ago. We could see the customer demand and the feedback on the experience, so it's an area of the market in which we chose to participate. We also see that payments innovation is going to be one of the most important areas of financial services globally, so we see our investment in Klarna as being more than buy-now pay-later or pay-in-full. We see it much more about working closely with them, exclusively in Australia and New Zealand, to develop innovative payment experiences to benefit our customers.
Hansard p.56
4 September 2020
(1 October 2020)
(PDF81KB)
CBA64QW Leigh In the recent House Economics Committee hearing, you noted that your bank no longer sells credit card insurance.

(a) For customers who previously purchased credit card insurance, have you taken steps to identify those who were sold the product when they were not eligible to claim on it? (For example, insurance to cover job loss but the customer was unemployed or retired when they purchased the product)

(b) If credit card insurance customers purchased your product when they were not eligible to claim on the policy, have you refunded them the cost of the policy?
Written (27 October 2020)
(PDF393KB)
CBA65QW Leigh For your bank, please complete the table below relating to your bank’s branch and ATM coverage since 2000 as a point-in-time measure for each of the stated years. Written (27 October 2020)
(PDF441KB)
CBA66QW Wilson In the context of first home buyers, can you please advise the following:

(a) The number and percentage of applications utilising a guarantor.

(b) The number and percentage of applications that come with declared financial support from family members towards the deposit.

(c) The number and percentage of applications where the ongoing financing of the loan is expected to be assisted by family members.

(d) Any other relevant data on the number and percentage of applications where the ongoing financing of the loan and/or deposit for the loan is assisted by/expected to be assisted by family members.
Written (29 October 2020)
(PDF414KB)
CBA67QW Wilson

Of the shareholdings in your bank, at your five most recent Annual General Meetings, what is:

(a) The total number of shares eligible to be exercised for voting?

(b) The total number of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) in total?

(c) The total percentage of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) the total percentage of all shareholdings exercised?

Written (21 December 2020)
(PDF436KB)
CBA68QW Wilson For each year over the last fifty years, what has been the share of lending the bank has provided to finance real estate? Written (4 February 2021)
(PDF511KB)
CBA70QON Leigh Dr LEIGH: How may ATMs for you have?

Mr Comyn: I think that the number you've mentioned, Dr Leigh, was, I think, 2,700 or so, from the 3 and a half thousand.

Dr LEIGH: No, 3,019 was the number you gave me for 2020. So, if it is down to 2,700, that is 300 ATM closures.

Mr Comyn: Perhaps I'll take the question on notice. It's certainly in that order, which is still, I think you'd agree, a substantial fleet of ATMs around the country.
Hansard p. 9
15 April 2021
(3 June 2021)
(PDF77KB)
CBA71QON
Leigh Dr LEIGH: The Commonwealth Bank operates 92 per cent of school banking programs. A report last December from ASIC was pretty critical of the way in which the Commonwealth Bank's school banking programs operate...

...

Dr LEIGH: You say you've made improvements, but this is a report that just came down, in December. Have you materially changed the program since December?

Mr Comyn: I think we had been improving it for some time. If you would like a breakdown of the changes that we have made over the last several years, as well as our reconciliation against the recommendations from ASIC, I'd be happy to provide that to you separately.
Hansard p. 12
15 April 2021
(3 June 2021)
(PDF82KB)
CBA72QON
Leigh Dr LEIGH: Your own superannuation funds—what's the ballpark annual profit that you receive from them?

Mr Comyn: Dr Leigh, are you referring to our superannuation platform, of which we announced the sale of 55 per cent, or the asset management, of which we completed the sale to Mitsubishi UFJ Financial Group?

Dr LEIGH: The one that you owned 55 per cent of.

Mr Cohen: As at last year, there was about a $240 million net profit after tax.

Dr LEIGH: How does that compare with previous years?

Mr Cohen: It is lower than previous years.

Dr LEIGH: Roughly, what was the ballpark over prior years?

Mr Cohen: I can come back to you with the exact details. In broad terms, as a result of changes to product and changes to fees—reductions in fees—it's been steadily decreasing over the last 18 to 24 months, but we can give you the details of that.

Dr LEIGH: Thank you. If it's possible to get the profit figure for each of the last five years, I would be grateful.
Hansard p. 13
15 April 2021
(3 June 2021)
(PDF135KB)
CBA73QON
Mulino Dr MULINO: With your modelling, how do you factor in that kind of risk? Do you undertake any scenario analysis or sensitivity analysis for things like, for example, the extent to which household balance sheets will be affected or, for example, the speed of the vaccine rollout—do you undertake quantitative sensitivity analysis?

...

Dr MULINO: This is more of a question on notice. It would be of great interest if you were able to provide any sensitivity analysis that you can that speaks to any of the things we've just discussed or any others and the extent to which that sensitivity analysis might point to even roughly estimating their potential impact on the speed of the economic recovery.

Mr Comyn: I'm happy to take that on notice.
Hansard p. 22
15 April 2021
(3 June 2021)
(PDF74KB)
CBA74QON
Mulino
Dr MULINO: There was some reporting in the AFR on 19 November around some underperforming funds, and Commonwealth Bank Group Super—I think it was the Accumulate Plus Balanced product—was nominated as one of the MySuper funds that was underperforming. I think the net return benchmark was minus 1.01 per cent. Have you seen that report? It's based on APRA numbers. Do you accept those numbers?

Mr Cohen: I do recall the report. That was part of the APRA heatmap report, from memory. Group Super, as you're aware, is our employee super fund, our internal super fund. I don't recall the exact figures for that, as you've quoted. I'm not disputing them; I just don't recall them specifically.

Dr MULINO: Do you have at hand the fee structure for that MySuper product?

Mr Cohen: No, I don't. We can certainly give you the detail, the fee structure, of that. From memory, the MySuper product is not one of the more popular products amongst the products offered by Group Super, but we can give you the breakdown of fees and costs.

Dr MULINO: That would be great. I'd also be curious to get a bit of guidance on the corporate structure, if you will. Does CBA own a corporate entity which owns the trustees? Is that the way it works?

Mr Cohen: Yes, that's correct. For the Group Super fund, yes, that's correct.

Dr MULINO: Are you able to provide information on the ways in which the returns that are earned in that product are distributed to members and then ultimately to CBA?

Mr Cohen: Yes.

Mr Comyn: We'd be happy to. What David's alluding to is the Group Super product, which is available to all employees—my superannuation is in that product. So, we'd be happy to provide it.
Hansard p. 22
15 April 2021
(3 June 2021)
(PDF113KB)
CBA75QON
Mulino
Mr Cohen: Dr Mulino, if I understand you correctly, you might be asking whether there is a portion of the returns earned by that fund that is distributed to members and another portion that goes to the CBA corporate group. Is that correct?

Dr MULINO: Yes, as a dividend, I suppose you could describe it.

Mr Cohen: My understanding—and we'll confirm this to you in a follow-up—is that there is no profit dividend returned to the CBA Group.

Mr Comyn: That's my understanding as well but we're happy to confirm that.

Dr MULINO: What's the name of the company beneath the CBA that owns the trustee?

Mr Cohen: Off the top of my head, I cannot remember. We can tell you on notice.

Dr MULINO: Would it retain some of the earnings on the investment products as a dividend or as profit?

Mr Cohen: It incurs costs, as you would expect, in maintaining and operating the fund. So it draws funds for that purpose. I'm not aware that it actually retains a pool of profits, if you like, for future dividend into CBA.

Dr MULINO: Thank you for taking that on notice. I'd be interested to get a sense of the flows from that product. Based on your understanding of the Your Future, Your Super Bill, what are the ways in which a member could be stapled to a product that is underperforming, and what do you see as some have the risks for members of that outcome?
Hansard pp. 22-23
15 April 2021
(3 June 2021)
(PDF77KB)
CBA76QON
Mulino
Dr MULINO: Do you disclose how much you spend on advertising and these various forms of community engagement?

Mr Comyn: Not specifically. It would be aggregated in one of our expense lines, which I would need the financial accounts in front of me to identify.

Dr MULINO: If you could provide that on notice, that would be much appreciated.

Mr Comyn: Sure; no problem.
Hansard p. 24
15 April 2021
(3 June 2021)
(PDF76KB)
CBA77QON
Simmonds Mr SIMMONDS: How many transactions have you blocked?

Mr Cohen: In the period between 29 October and 29 January, so a three-month period, somewhat alarmingly we've blocked 162,000 transactions. When a transaction is blocked the sender receives a message saying that the transaction is blocked because of an offensive term used in the description field. They can then try to send the transaction again. Of those 162,000 that were blocked, customers tried again, and 115,000 of those were blocked completely. So that's really alarming.

Mr SIMMONDS: Very significant.

Mr Cohen: That's 115,000 in three months. Those 115,000 represents about 100,000 customer accounts that had blocks applied to them.

Mr SIMMONDS: If you're identifying so many customers, if they're doing it repeatedly, what steps are you taking? How many have you actually kicked off the system or asked them to leave the bank as a customer? , the customer?
Mr Cohen: I would need to come back to you with the exact numbers on how many we have offboarded or unlisted, as we call it—that is, where the customer is no longer able to remain a customer.
Hansard p. 26
15 April 2021
(3 June 2021)
(PDF79KB)
CBA78QON
Simmonds Mr SIMMONDS: Any information you can provide me on notice around the numbers and trends for the messaging service, how many customers are using it and your interaction with the police or other way that you are taking action against individuals internally with the bank—any information along those lines—would be appreciated.
Hansard p. 29
15 April 2021
(3 June 2021)
(PDF74KB)
CBA79QW
Leigh

In relation to the sale of 55 per cent of Colonial First State to KKR:

(a) How did CBA manage the risk to reputation for CBA's board and shareholders that may result from the sale, considering the findings and allegations of misconduct against KKR, including:

• Alleged misconduct relating to breach of fiduciary duties in its dealings with the public pension fund Kentucky Retirement System, currently before the courts in the United States;
• Being charged by the US Securities and Exchange Commission with 'misallocating more than US$17 million in so-called "broken-deal" expenses to its flagship private equity funds in breach of its fiduciary duty' in 2015; and
• Allegations of misconduct against KKR and a number of other large private equity firms, raised in an anti-trust lawsuit, settled in 2014.

(b) What specific due diligence procedures did CBA undertake in relation to the sale? Given the conduct and allegations outlined above, were these procedures in addition to standard practice?

(c) What did CBA consider to ensure this conduct and allegations would not have negative impacts on members' outcomes?

Written (3 June 2021)
(PDF128KB)
CBA80QW
Leigh

Consumer Data Right


(a) How many customers have requested that their data be shared with accredited data recipients through the Consumer Data Right regime?

(b) How long, on average, does it take for the bank to transfer data to accredited data recipients after it has been requested by customers?

(c) What strategies or processes has the bank implemented to overcome the following challenges with Consumer Data Right:

(i) The critical challenge of low consumer trust in the Consumer Data Right system;
(ii) Managing consent; in particular, balancing the need for consumers to understand what they are consenting to without being deterred by excessively complex procedures; and
(iii) The risk of data breaches.

Written
(3 June 2021)
(PDF107KB)
CBA81QW
Leigh

Consumer credit insurance


(a) Does your bank sell consumer credit insurance? If so:

(i) Why?
(ii) Does your bank sell consumer credit insurance on home loans? If so, what is the cents in the dollar payout ratio?

(b) If your bank once sold consumer credit insurance products but has stopped selling these products, what has your bank done to remediate customers who paid for these products in the past?

Written (3 June 2021)
(PDF77KB)
CBA82QW
Leigh

Remediation


(a) What processes are in place for situations where the bank has identified remediation commitments but cannot find or contact the person?

(b) What does the bank do with these funds?

Written
(3 June 2021)
(PDF79KB)
CBA83QW Leigh

Branch closures


(a) How many branches will you have at the end of 2021?

(b) For the branch closures that have taken place or are scheduled to take place during 2020 and 2021, please provide the postcode of the branch and an indication of whether the location is regional, suburban or metropolitan.

(c) For the branch closures that have taken place in 2020 and 2021, were there other branches in the postcode that remained open?

Written (3 June 2021)
(PDF150KB)
CBA84QW
Leigh

Business loans


(a) Are you required to follow responsible lending laws for loans that are predominantly for a business purpose?

(b) Is that requirement different if the family home is being used as security for the business loan?

Written (3 June 2021)
(PDF103KB)
CBA85QW
Leigh

Lending practices and coercive control


(a) What elements of the loan application process are in place to identify and mitigate the risk that the bank is party to coercive control practices?

(b) Does the bank seek specific information from potential borrowers to identify signs of coercive control practices or financial abuse?

Written
(3 June 2021)
(PDF118KB)
CBA86QW
Wilson For each financial year over the past decade, please outline the number and percentage of first home owner mortgages that:

(a) have a guarantor?

(b) have lenders mortgage insurance?
Written
(3 June 2021)
(PDF109KB)
CBA87QW
Wilson
For each financial year over the past decade, please outline the number and percentage of first home owner mortgages at your bank that are used for:

(a) building new properties?

(b) purchasing established properties?
Written
(3 June 2021)
(PDF109KB)
CBA88QW
Wilson
What regulatory changes would be necessary to enable banks to lend to individuals with SMSFs, who are in the retirement phase, to allow them to seek credit for the purchase of assets (such as homes) or to address short-term cash flow issues?
Written
(3 June 2021)
(PDF98KB)
CBA89QW
Wilson
At the last round of hearings your bank stated that it could devise a product that utilises superannuation as a form of security to enable Australians to purchase a first home. To do so, please advise what legislative change would be required to enable you to do so?
Written
(3 June 2021)
(PDF97KB)
CBA90QW
Wilson

Pension Loans Scheme


The Pension Loans Scheme (PLS) is a Government scheme that allows older Australians, who own real estate in Australia, to get a voluntary non-taxable fortnightly loan from the Government to supplement their retirement income.

(a) Do you allow customers to use a property that has an existing mortgage or reverse mortgage with your bank as security for the PLS? If not, why?

(b) Do you allow the Government to lodge a caveat for the PLS against the title of a property that has an existing mortgage or reverse mortgage with your bank? If not, why?

Written
(3 June 2021)
(PDF75KB)
CBA91QW
Wilson

Home loan approval timeframes


For all home loan applications you have received in the quarter ending 31 March 2021 (regardless of whether the application was settled):

(a) What is the average and median time from receipt of application by the bank to final approval, for applications received directly through your branch network?

(b) What is the average and median time from receipt of application by the bank to final approval, for applications received through a mortgage broker?

(c) If there is a difference in average and median time from receipt by the bank to approval for applications received through the branch network compared to the those received through a mortgage broker:

(i) What is the reason for the difference?
(ii) How might this impact the competitiveness of mortgage brokers?
(iii) What is the bank doing to equalise the difference in times?

(d) Is an application received through the branch network processed differently from an application received through a mortgage broker? If so:

(i) What is the reason for the difference?
(ii) Is this difference informed by bank policy? If so, why?

Written
(3 June 2021)
(PDF86KB)
CBA93QW
Wilson

For the past five years, please advise:

(a) the number and percentage of total mortgages for principal places of residence that are:

(i) variable only
(ii) variable and fixed
(iii) fixed only

(b) the number and percentage of total mortgages for investment properties that are:

(i) variable only
(ii) variable and fixed
(iii) fixed only

Written (21 September 2021)
(PDF543KB)
CBA94QW
Wilson

Since March 2020, please advise:

(a) the number and percentage of new mortgages for principal places of residence that are:

(i) variable only
(ii) variable and fixed
(iii) fixed only

Written (21 September 2021)
(PDF524KB)
CBA95QW
Wilson

For mortgages that have been fixed since March 2020:

(a) what percentage of new mortgages for principal places of residence were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

(b) what percentage of existing mortgages for principal places of residence were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

(c) what percentage of new mortgages for investment properties were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

(d) what percentage of existing mortgages for investment properties were fixed for:

(i) 1 year
(ii) 2 years
(iii) 3 years
(iv) 4 years
(v) 5 years

Written (21 September 2021)
(PDF617KB)
CBA96QW
Wilson (a) What percentage of total mortgages for principal places of residence are currently interest only?

(b) How many existing customers have chosen to switch to an interest only mortgage for their principal place of residence?
Written
(21 September 2021)
(PDF531KB)
CBA97QW
Wilson

Banking services in the Pacific Islands

(a) Please list the countries in the Pacific Islands where your bank currently provides banking services.

(i) Please outline what banking services are offered in each of these countries.

(b) Are there any countries in the Pacific Islands where your bank provided banking services in the past 5 years but no longer provides banking services?

(c) If you have stopped providing banking services to any Pacific Island country, please list the name of the country and for each country explain:

(i) the reason for ending banking services;
(ii) whether the cost of meeting Australian AML/CTF requirements contributed to your decision to stop providing banking services.

Written
(21 September 2021)
(PDF548KB)

 

Westpac

Q No. Member Question    Hansard page
and Hearing date
or Written questions 

Response

(Publication date)

WBC01QW

Wilson

           

Regarding principal and interest mortgages:             

(a) How many do you currently provide, and what is their total dollar value? 

(b) What is their percentage of your total mortgage products provided? 

(c) When the board decides to cut interest rates is the reduction         automatically passed through to mortgage holders through lower       repayments, or when the board decides to cut interest rates is the             reduction in repayments only passed through on request of the holder with the gap paying off additional principal? 

(d) If the latter, how many mortgage holders have requested a reduction in repayments as a percentage of principal and interest mortgage holders? 

(e) For the last two rate cuts, what was the aggregate dollar value reduction in interest repayments compared to each previous month?

Written

(PDF 474KB

WBC02QW

Wilson

Regarding interest-only mortgages:

(a) How many do you currently provide, and what is their nominal value? 

(b) What is their percentage of your total mortgage products provided? 

(c) For the last two rate cuts, what was the aggregate dollar value reduction in interest repayments compared to each previous month?     

Written       

(PDF 410KB)

WBC03QW

Wilson

Regarding interest-bearing deposits:

(a) How many deposits are currently held, and what is their aggregate           value? 

(b) For deposits held, what was their aggregate dollar value in each of            the last six months? 

(c) For interest payments, what was the dollar value paid in each of the          last six months? 

(d) What has been the reduction in interest payments resulting from   the last two interest rate cut?

Written      

(PDF 413KB)

WBC04QW

Wilson

Over the past six months can you please outline for each month:

(a) The standard variable interest rate(s) for a principal and interest mortgage  

(b) The standard variable rate(s) for an interest only mortgage  

(c) The standard fixed interest rate(s) for a principal and interest mortgage  

(d) The standard fixed rate(s) for an interest only mortgage  

(e) The interest rate(s) for term deposits  

(f) The interest rate(s) for any other interest-bearing deposit products.

Written      

(PDF 885KB)

WBC05QON Wilson 

CHAIR:  Do you provide feedback directly to the ABA about how it's practically being implemented and whether there's a case for review?

Mr Hartzer:  Yes. There's a code-monitoring committee that has been set up, and we have to report to and engage with that committee on a regular basis.

CHAIR:  When you say 'regular', do you mean quarterly? Monthly? Yearly?

Mr Hartzer:  I'm not sure off the top of my head. It's certainly at least annually. I'm happy to take that on notice and come back to you.

Hansard p.4

8 November 2019

(PDF 334KB)
WBC06QON Wilson

CHAIR:  One of the things that's been raised with me, particularly by a number of small businesses, is around payment terms and the payment terms of larger organisations. In fact, I think the government made an announcement about this only yesterday. What are the payment terms for small and medium businesses for Westpac?
...

Mr Hartzer:  I'd have to come back to you on notice in terms of specifically what we do

Hansard p.5

8 November 2019

(PDF 331KB)
WBC07QON Wilson

CHAIR:  How many class actions does Westpac have against it at the moment?

Mr Hartzer:  There are a couple. I don't know the exact number off the top of my head.

Mr Hartzer:  Sure

Hansard p.6

8 November 2019

(PDF 340KB)
WBC08QON Bandt

Mr BANDT:  Coming back to that point about transition that you raised, can you outline what scientific reporting or other form of analysis you relied on to suggest that, in any transition to a 1½- or two-degree world, there's a role for expansion of fossil fuel?

Mr Hartzer…I'm happy to take on notice who we consult with in the establishment of those policies.

Hansard p.13

8 November 2019

(PDF 557KB)
WBC09QON Bandt

Mr BANDT:  Again, you might need to take this on notice, but estimates of a four-degree-warmed world have the carrying capacity of the planet reducing from the current 7½ billion down to one billion people by the end of the century. Are you saying that, in a four-degree-warmed world, there will only be a 1.6 per cent impact on mortgages in Australia?

Mr King:  Mr Bandt, I think we'll take that one on notice. There are so many variables, when you're doing long-term forecasting like that, that I don't think we can be that specific.

Hansard p.13

8 November 2019

(PDF 344KB)
WBC10QON Bandt

Mr BANDT:  Have you done any analysis of sea level rise and your exposure in Asia?

Mr Hartzer:  I'm not sure whether we have, although our exposure in Asia is pretty modest in the scheme of things.

Mr BANDT:  Yes, if you could take that on notice and let me know, as well.

Hansard p.13-14

8 November 2019

(PDF 323KB)
WBC11QON Wilson

CHAIR:  What would be the consequence of greater movement in the interest rate against the official rate as part of the overall picture of an interest rate of a credit card? If you did it on, say, a more frequent basis, would it lead to a higher or a lower rate?
...

Mr Hartzer:  …I'm happy to take that on notice and consider it a bit more.

Hansard p.21-22

8 November 2019

(PDF 404KB)
WBC12QON Wilson

CHAIR:  Do you have any data around what you've been able to achieve under that model in terms of consolidation [of multiple superannuation accounts]?

Hartzer:  I'd have to take that on notice.

Hansard p.23

8 November 2019

(PDF 334KB)
WBC13QON Wilson

CHAIR:  Are there regulations in particular that you can stipulate, that you can provide to the committee, which would outline what you think is creating a barrier to the bank doing business?

Mr Hartzer:  We're happy to provide that on notice and consider it a bit more.

Hansard p.23

8 November 2019

(PDF 334KB)
WBC14QON Wilson

CHAIR:  Has Westpac done any analysis of the potential impact of different models of quantitative easing that have been floated by the Reserve Bank?
...

Mr King:  Our economics team has published some thoughts on that matter, and we could certainly-

CHAIR:  Could you table them on notice as well, please?

Hansard p.24-25

8 November 2019

(PDF 323KB)

Attachment 1
(PDF 100KB)

Attachment 2
(PDF 203KB)

WBC15QON Leigh

Dr LEIGH:  I am confused, though, by the proposition that, because it is an average, you can't provide it. Many of the figures in your reporting are averages. Needless to say, we'd also want to think about the variance; but an average is often an informative statistic. Might you not be able to undertake to provide to the committee an estimate of the gap between what a new customer and an existing customer would pay?

Mr Hartzer:  I'm happy to take on notice what sort of further analysis we can provide that is consistent with what we've already provided in some of these other forums

Hansard p.25

8 November 2019

(PDF 341KB)

WBC16QON Falinski

Mr FALINSKI:  In terms of Westpac, are you in a position to let us know how much your director and officer liability insurance premiums have increased in the last few years?

Mr Hartzer:  They have increased significantly. I'd have to take the details on notice

Hansard p.28

8 November 2019

(PDF 336KB)
WBC17QON Falinski

Mr FALINSKI:  In the past previous CEOs have mentioned their concern about people buying low volumes of shares on market and then using that as an opportunity to disrupt AGMs. Is that something that is still occurring? Is Westpac still being targeted in that fashion?

Mr Hartzer:  We certainly see examples of organisations buying shares in order to make statements or put motions in our AGM. I know that that's been a challenge for some companies. Our experience for the most part has been that people have been respectful in the way that they have gone about that. And we don't have a fundamental issue with people putting their views forward, so long as it's done in a respectful manner.

Mr FALINSKI:  Do you think that there could be any changes to the corporations law to ensure that it is done in a respectful manner?

Mr Hartzer:  I would be happy for you to suggest how that might happen. But I don't have a firm view on-

Mr FALINSKI:  Would you like to take that on notice?

Mr Hartzer:  Sure.

Hansard p.28-29

8 November 2019

(PDF 327KB)
WBC18QON Mulino

Dr MULINO:  What does your data tell you about the transmission of the stage 1 tax cuts to retail sales and to the real economy more broadly?

Mr Hartzer:  We are seeing a bit of an impact, but I'm not sure I can quantify it. We think it's definitely been a bit of a contributor. Certainly on the housing market side we think that that's been somewhat positive but we've also seen that some of that has probably gone to paying down debt.

to what proportion people are spending? Less than half?

Mr Hartzer:  Not off the top of my head, but I'd happily take that on notice.

Hansard p.29

8 November 2019

(PDF 344KB)
WBC19QON Wilson A copy of the bank’s payment term policy or policies. Written  (PDF 321KB)
WBC20QON Wilson

With reference to the bank’s payment term policy or policies that the bank applies to its suppliers of goods and services, and customers of its goods and services

(a) whether they are consistent between the purchase and sale of goods and services?

(b) in reference to (a), if not, why not?

(c) in reference to (a), if not, will the bank bring them into consistency?

Written (PDF 326KB)
WBC21QON Wilson

A copy of the valuation policies that the bank applies to:

(a) infrastructure investments.

(b) large commercial investments or like commercial investments, including definitions that lead to their classification as a large commercial or like commercial investments.

Written (PDF 329KB)
WBC22QON Wilson

Whether the valuations on infrastructure investments finances by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?

Written (PDF 325KB)
WBC23QON Wilson

Whether the valuations on large commercial investments or like large commercial investments financed by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?

Written (PDF 325KB)
WBC24QON Wilson A copy of the bank’s model litigant standards applied to legal proceedings Written

(PDF 323KB)

Attachment
(PDF 143KB)

WBC25QON Wilson How many class actions are you currently facing, and can you please provide a summary of each case brought against the bank? Written (PDF 325KB)
WBC26QW Leigh

At the 15 November committee hearing, NAB told the Committee that over the last 12 months it has contacted all mortgage holders asking if they would like to review their home loan products.

Has your bank undertaken any similar proactive outreach to ensure your customers are happy with their products and aware of alternatives?

Written (PDF 333KB)
WBC27QW Leigh

Of existing customers who switch to better lending arrangements within your bank, could you share any broad data you have regarding the size of their loan (at the time of changing), the duration of their loan up to that point, their income bracket, their location, and their age?

Alternatively, could you indicate if the customers who change tend to share a particular demographic profile? If that information could be provided overall, but also separately depending on whether the customer changed their lending arrangements after unsolicited contact from the bank (after a rate change for example) or as a result of contact they initiated with the bank, it would be appreciated.

Written (PDF 436KB)
WBC28QW Leigh In relation to the approximately 23 million breaches of Australia’s money laundering and financing of terrorism laws by Westpac which have been identified by AUSTRAC:

(a) what was the net profit to the bank accrued across those transactions?

(b) what was the net profit to the bank accrued across those transactions that AUSTRAC has now identified as potentially supporting child exploitation?
Written (PDF 428KB)
WBC29QW Wilson

Anti-money laundering:

(a) Can you please provide a copy of your anti-money laundering, or like, policy?

(b) How many cases have you reported to AUSTRAC over the past decade?

(c) Of those cases, how many relate to:

(i) money laundering?

(ii) terrorist financing?

(iii) organised crime?

(iv) human trafficking?

(v) child exploitation?

(vi) crimes of a sexual nature?

(vii) other serious crimes not captured by (i) – (vi)?

(d) Can you please provide an update on your initiatives, including details of programs, staff numbers and financial resources toward initiatives to combat:

(i) money laundering?

(ii) terrorist financing?

(iii) organised crime?

(iv) human trafficking?

(v) child exploitation?

(vi) crimes of a sexual nature?

(vii) other serious crimes not captured by (i) – (vi)?      
    

(e) How frequently have you reported to AUSTRAC on a scheduled basis over the past decade?

(f) Please outline the occasions you have reported to AUSTRAC on an ad hoc basis over the past decade?

(g) Over the past decade, how many AUSTRAC investigations into the bank have been:                        

(i) opened

(ii) completed with penalties

(iii) completed without penalties

(iv) abandoned


(h) How many fines have been paid to AUSTRAC over the past decade, and what were their values?

(i) Have any AUSTRAC notifications or investigations resulted in terminations of employment or other penalties for employees?

(j) Have any AUSTRAC notifications or investigations resulted in terminations of employment or other penalties for executives?

(k) What staff training is provided to assist anti-money laundering and other serious crime detection?

Written (PDF 121KB)
WBC30QW Wilson

Merchant facilities and low cost routing:

(a) Do you provide merchant facilities, and if so, to how many customers?

(b) Would your small and medium business customers save money if they moved to low cost routing, and if so, do you actively encourage customers to switch?

(c) If so, how do you encourage small and medium business customers to switch to low cost routing?

(d) Do you think all small and medium business customers should be on low cost routing?

(e) What are the fee structures for different merchant services available, including low cost routing options?

(h) What number and share (percentage of total) of merchant services for all customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?

(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?


(i) What number and share (percentage of total) of merchant services for small and medium business customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?

(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?

Written (PDF 94KB)
WBC31QW Wilson Interest rates:

(a) Regarding principal and interest mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(b) Regarding interest-only mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(c) Regarding interest-bearing deposits, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?
Written (PDF 124KB)
WBC32QW Wilson Terminations for misconduct:

(a) How many employees does the bank have?

(b) How do you define employee misconduct?

(c) How many employees have been cautioned for misconduct over the past five years?

(d) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years?

(e) How many employees have been terminated for misconduct over the past five years?

(f) How many employees have been cautioned for misconduct over the past five years, as a share of all employees over that timeframe?

(g) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years, as a share of all employees over that timeframe?

(h) How many employees have been terminated for misconduct over the past five years, as a share of all employees over that timeframe?

(i) What are the processes available for whistle-blowers into misconduct within the bank?
Written (PDF 83KB)
WBC33QW Wilson Of the twenty highest remunerated employees over the past decade, please provide the number whose total remuneration in a financial year (including all forms of remuneration, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF 73KB)
WBC34QW Wilson Of the twenty highest incentive bonuses paid over the past decade, please provide the number that fall within these brackets? Written (PDF 68KB)
WBC35QW Wilson Of the twenty highest performance bonuses paid over the past decade, please provide the number that fall within these brackets? Written (PDF 71KB)
WBC36QW Wilson Of the twenty highest severance packages over the past decade, please provide the number whose total package (including all forms of accumulated severance package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF 70KB)
WBC37QW Wilson Of the twenty highest termination payments over the past decade, please provide the number whose total package (including all forms of accumulated termination package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF 73KB)
WBC38QW Wilson Of the twenty highest redundancy payments over the past decade, please provide the number whose total package (including all forms of accumulated redundancy package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF 72KB)
WBC39QW Wilson International transfer of funds:

(a) What information does AUSTRAC require for reporting of the international transfer of funds?

(b) What data is required to be input for an international transfer of funds?

(c) What data is required to be input for the verification of an international transfer of funds?

(d) What difference is there between the data required for an international transfer of funds, and a verified international transfer of funds?

(e) What information do you provide to AUSTRAC for reporting of the international transfer of funds?

(f) Do you provide data for verified transactions to AUSTRAC?

(g) Do you provide data for unverified transactions to AUSTRAC?

(h) What difference is there between the data required for an international transfer of funds and the data required for AUSTRAC reporting?

(i) What difference is there between the data required for the verification of an international transfer of funds and the data required for AUSTRAC reporting?
Written (PDF 92KB)
WBC40QW Wilson Impact of Coronavirus:

(a) Has the bank completed any assessment or modelling of the potential impact of Coronavirus on the bank, or the Australian economy?

(b) If yes, can it please be provided?
Written

(PDF 92KB)

Attachment 1
(PDF 92KB)

Attachment 2
(PDF 92KB)

WBC41QW Leigh In January 2020, February 2020, March 2020 and April 2020 (to date):

(a) For each month, how many mortgage customers have requested to defer home loan repayments?

(b) For each month, what percentage of all home loan customers do those requesting deferrals account for?

(c) For each month, what is the average debt for home loan customers requesting repayment deferrals?

(d) For each month, what is the average debt for all home loan customers?
Written (4 June 2020)
(PDF 500KB)
WBC42QW Leigh Some banks have recently changed the default payment amount for mortgage holders, so that borrowers pay only the minimum amount.

(a) Have you done this?

(b) If so, how many borrowers does it affect?

(c) If not, why have you decided not to take this approach?
Written (4 June 2020)
(PDF 494KB)
WBC43QW Leigh On 31 March, the Australian Financial Review wrote that a branch manager at a big four bank was reported for berating staff who weren’t selling enough of the bank’s products, despite customer-facing employees being fearful of losing their jobs or catching the coronavirus.

(a) Did that report refer to Westpac?

(b) If yes, what was done to discipline or counsel the manager?

(c) Have there been any other similar incidents in Westpac branches?

(d) Have you since or previously issued directives to managers about appropriate targets and tactics for product sales?
Written (4 June 2020)
(PDF 107KB)
WBC44QW Leigh Implementation of Coronavirus SME Guarantee Scheme:

(a) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received in total?

(b) How many credit arrangements has your organisation approved through the Coronavirus SME Guarantee Scheme?

(c) In relation to the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities and not-for-profit entities?

(d) How many credit arrangements for charities and not-for-profit entities has your organisation approved through the Coronavirus SME Guarantee Scheme?

(e) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities registered with the ACNC?

(f) How many credit arrangements for charities registered with the ACNC has your organisation approved through the Coronavirus SME Guarantee Scheme?
Written (22 June 2020)
(PDF 412KB)
WBC45QW Leigh In the months of March, April and May 2020—how many overdrafts or similar short term credit arrangements (other than those initiated through the Coronavirus SME Guarantee Scheme) has your organisation set up with each of the following overlapping populations:

(a) charities and not-for-profit entities;

(b) ACNC registered charities; and

(c) SMEs.
Written (22 June 2020)
(PDF 413KB)
WBC46QW Wilson

Westpac has publicly stated that it will defer repayments on credit cards for COVID-19 affected customers (Westpac Freezes Credit Card Charges for COVID-19 hit customers, The Age, 24 April 2020). Therefore, can you please advise:

(a) What processes do you have in place to identify credit card customers who have been impacted by the COVID-19 pandemic?

(e) What deferral options are available for credit card customers that you have identified as impacted by the COVID-19 pandemic?

(i) If none, do you intend on doing so?

Written (24 June 2020)
(PDF678KB)
WBC47QW Bandt Westpac has provided finance for the Adani Abbot Point Terminal (AAPT), with its outstanding loan maturing in November 2020. In 2017, in answers to both the House of Representatives Standing Committee on Economics and shareholders at its AGM, Westpac implied it considered AAPT as an essential part of a thermal coal development in a new coal basin and further finance would therefore, in principle, breach its (then recently updated) climate policy.

(a) Does Westpac stand by this position?

(b) Will Westpac be involved in any further financing of AAPT?
Written (30 July 2020)
(PDF404KB)
WBC48QW Wilson

Merchant services and low cost routing:

(a) In terms of your Point of Sale (POS) strategic merchant services:

(i) What is the total number of your POS strategic merchant services customers?

(ii) What is the number of small and medium business customers?

(b) What number and share (percentage of total) of your total strategic merchant services customers and number and share of small and medium business merchant services customers:

(i) Use the Least Cost Routing (LCR) or Merchant Choice Routing (MRC) option for multi-network debit transactions?

(ii) Have a contract for the lowest cost routing option, when including all fees associated with the transaction including interchange and scheme fees?

(c) Is LCR or MCR on multi-network debit transactions offered to all customers as an opt-out option to ensure all get access to savings? If not:

(i) Why?

(ii) Considering that the Reserve Bank of Australia has advocated LCR since 2013, why have you not found a way provide this service and the associated cost savings to all of your merchant services customers?

(iii) Do you believe you are acting in your merchants’ best interests by not passing on possible savings?


(d) Are LCR or MCR services offered on all terminal types for multi-network debit transactions? If not:

(i) Which terminal types do not have LCR or MCR?

(ii) What percentage of your terminal fleet does this represent?

(iii) When do you plan to upgrade those terminal types that do not have LCR or MCR to enable those merchants with those terminal types to access LCR or MCR?


(e) Are LCR or MCR services offered on all pricing plans for multi-network debit transactions? If not:

(i) Which pricing plans do not have LCR or MCR as an option?

(ii) What percentage of your small and medium business merchant customers are on these plans?

(iii) Why?


(f) If you provided all your strategic and small and medium business POS merchant services customers access to the lowest cost scheme on all multi-network debit transactions, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?


(g) If you passed on at POS the lowest cost per transaction via dynamic routing to your merchants, based upon current and eftpos 1 July 2020 pricing, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?


(h) Are any additional fees or charges, such as terminal rental, added or increased for small and medium business merchant customers who elect to implement LCR or MCR?

(i) If so, why?

(ii) Do you increase the average eftpos transaction fee for customers who choose to use LCR or MCR compared to other plans? Why?

(iii) Does a customer’s choice to use LCR or MCR for debit transactions impact the fees you charge for credit transactions for any of your merchant customers? Why?

Written (30 July 2020)
(PDF504KB)
WBC49QW Wilson

Acquiring merchant facilities:

(a) Please provide details for debit transactions through your Acquiring merchant facilities for calendar year 2019 and calendar year 2020 (to date) including:

(i) The total number?

(ii) In dollar terms?

(iii) Total fees received by the bank?


(b) Please provide details for debit transactions through your Acquiring merchant facilities for financial year 2018/2019 and financial year 2019/2020 (to date):

(i) The total number?

(ii) In dollar terms?

(iii) Total fees received by the bank?


(c) Please outline the schemes that provide debit card payments services currently contracted by the bank, including:

(i) The name of the card payments service provider.

(ii) The length of their current contract.

(iii) How far through the contract the bank currently is.

(iv) How much of the contract remains.

(v) Whether the contract involves the provision of card payments with debit, credit or other products.

(vi) Whether the contract applies incentive payment arrangements based on volume of processed transactions or other performance criteria per payment type or as an aggregate volume.

(vii) Details of the ‘profit’ or ‘premium’ charged to the business between the cost of the transaction fees charged to the acquiring bank by various schemes, and the transaction fees charged to small and medium business customers by the acquiring bank, including interchange, scheme fees, acquirer margin and terminal rental.

Wilson (30 July 2020)
(PDF490KB)
WBC50QW Wilson

For each provider, provide the following information based on the method of calculation for each merchant category type in your debit Acquiring portfolio:

(a) Contracted provider (e.g. Visa)

(b) Interchange fee (e.g. 0.04 per transaction)

(c) Scheme fee based on an $40 transaction (e.g. $0.01 per transaction for first twenty transactions, then $0.02 for every transaction thereafter)

(d) Acquirer costs and margin (e.g. 1 per cent of transaction)

(e) Any other cost (i.e. any fee not listed above)

(f) Any ‘profit’ or ‘premium’ charged in addition by the bank that is passed onto the merchant (i.e. any fee not listed above)

(g) What is the total retail cost charged to merchant customers for each merchant category and each debit scheme, not including volume incentive payments for the following transactions:

(i) $5

(ii) $20

(iii) $40

(iv) $100

(v) $1,000


(h) What is the total Acquiring wholesale cost for each merchant category and each debit scheme, not including volume incentive payments for the following transactions?

(i) $5

(ii) $20

(iii) $40

(iv) $100

(v) $1,000

Written (30 July 2020)
(PDF478KB)
WBC51QW Wilson Eftpos:

(a) Do you intend to pass on savings from the eftpos interchange wholesale repricing for routed multi-network debit card transactions that is being introduced on 1 July? If so, how much of the 2 cent reduction per transaction will be passed on?

(b) When do you intend to turn on all eftpos digital messages?

(c) Have you turned on at least the low risk transactions such as card on file and D&W that were technically available in 2018? If not, why?

(d) Do you believe turning on digital for eftpos will create more price competition and place issuer income at risk? If so, is this one of the reasons you have been slow to launch eftpos digital?

(e) Do you think you are acting in your merchants’ best interests by not turning on eftpos digital transactions sooner?
Written (30 July 2020)
(PDF479KB)
WBC52QW Wilson

In the context of an exchange that occurred during the House of Representatives’ Standing Committee on Economics’ hearing with the Reserve Bank Governor and the Member for Mackellar on 14 August 2020:

Mr FALINSKI: And I congratulate you for drawing attention to something that people have deliberately ignored for too long, but while we're on the point of bad regulations and unintended consequences, we, the federal parliament, introduced not long ago responsible lending obligations, which essentially have the principle that the lender is responsible for decisions that the borrower makes. Is it your evidence to this committee and to the parliament that that law is not having any impact on credit creation and lending to small business and to those enterprises that are taking a risk in starting new enterprises?

Mr Lowe: That's not my evidence. I think it is having an effect. Just to go back to the legislation the parliament passed, which at a very high level is eminently reasonable, it says that, when extending credit, the loan can't be unsuitable—who could argue with that?—and in making the loan you've got to take reasonable steps that the borrower can repay. Well, who could disagree with those two broad principles? I find it very hard to disagree with them. What has happened is that those principles have turned into hundreds of pages of guidance. Once the compliance people, the lawyers, the regulators and the media get involved, these high-level principles put in law get turned into a lot of guidance, because people don't want to offend these kinds of regulatory requirements.

Mr FALINSKI: Can I humbly put it to you that you're being very generous. Wasn't it the interpretation of the courts, until the recent ASIC v Westpac case, that what this actually did was put the obligations back on lenders to understand absolutely and completely the capacity of borrowers to service a loan? That's why it turned into hundreds of pages and, when this was tested before the courts, especially the lower courts, that's what they found. I guess that's why we say the principle makes sense but the unintended consequence was that it restricted lending in the Australian capital markets.

Mr Lowe: I agree with you. I think the principles in the legislation are sound, but I think the way we've translated those principles into reality needs looking at again. If we can't do that properly, maybe we need to look at the legislation. We can't have a world in which, if a borrower can't repay the loan, it's always the bank's fault. On a portfolio basis, we want banks to make some loans that actually go bad, because if a bank never makes a loan that goes bad it means it's not extending enough credit. The pendulum has probably swung a bit too far to blaming the bank if a loan goes bad, because the bank didn't understand the customer; if it had done proper due diligence—this is the mindset of some—the bank would never have made the loan. So some of the banks have had this mindset, 'Well, we can't make loans that go bad.' I would have to say, though, that in the past three or four months I've heard fewer concerns from the banks about the responsible lending laws. ASIC introduced new guidance. Institutions are gradually coming to grips with those.

Mr FALINSKI: That might be because, under the extraordinary powers we granted the Treasurer, he has given them relief from RLOs.

(a) Can you advise whether the Governor of the Reserve Bank of Australia’s views reflect that of your institution?

(b) Do you agree with the principles established in legislation on responsible lending obligations? If not, which principles and why?

(c) Are there any principles in the legislation that you believe could be amended or replaced that would better enable the bank to provide credit?

(d) Do you agree with ASIC’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(e) Are there any sections in ASIC’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(f) Do you agree with APRA’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(g) Are there any sections in APRA’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(h) Have there been any unintended consequences resulting from the rulings of courts or tribunals that have applied strict interpretations of responsible lending obligations?

(i) Have there been any decisions of courts or tribunals, such as AFCA, that you have chosen to appeal? If so, please provide details.

(j) Have you removed any products as a result of responsible lending obligations?

(k) Since 2008, what debt products have you removed from your product list as a result of responsible lending obligations?

Written (22 October 2020)
(PDF465KB)
WBC53QW Wilson

(a) Have you completed a cost estimation of the impact of implementing responsible lending obligations for:

(i) Your institution? If so, please provide this estimation.

(ii) Your customers? If so, please provide this estimation.

(b) Since the exemption from the responsible lending obligations for small and medium enterprises has been in place:

(i) Have you adjusted your internal processes to assess credit approvals?

(ii) What impact has the exemption had on the bank’s capacity to lend?

(iii) If the exemption has had no effect, why?

(c) Have you seen small and medium enterprises turn to other lines of credit during the coronavirus pandemic? If so, why?

Written (22 October 2020)
(PDF336KB)
WBC54QW Wilson

inhibiting the provision of credit to individuals, households, or small and medium enterprises? If so, can you provide them to the committee?

(b) Have you estimated the cost of applying the responsible lending obligations? Has it increased the fees and charges for customers? If so, please provide information on how much the average and median fees and charges to customers have increased for the following products:

(i) new mortgages;

(ii) refinancing internal mortgages;

(iii) refinancing transferred mortgages;

(iv) new small and medium enterprise credit;

(v) refinancing and/or rollover internal small and medium enterprise credit; and

(vi) refinancing and/or rollover external small and medium enterprise credit.

(c) Have you estimated the impact of applying the responsible lending obligations on the amount of processing time required from the receipt of an application to approval? Has the required processing time increased? If so, please provide information on how much the average and median processing times have increased for the following products:

(i) new mortgages;

(ii) refinancing internal mortgages;

(iii) refinancing transferred mortgages;

(iv) new small and medium enterprise credit;

(v) refinancing and/or rollover internal small and medium enterprise credit; and

(vi) refinancing and/or rollover external small and medium enterprise credit.

Written (22 October 2020)
(PDF335KB)
WBC56QON Wilson CHAIR: In light of the QBE issues of late, how many non-disclosure payments do you have around sexual harassment?

Mr King: Over time, it's not something that we track. But, in terms of our approach to non-disclosure or non-disparagement agreements, we're removing them. In terms of the go-forward situation, we are removing them, and, if they have been in place historically, we will look at them case by case. But they're unlikely to be something that we'll require.

CHAIR: Okay, but that doesn't actually answer my question. You clearly do have some; how many did you have, say, in the past five years?

Mr King: The reason I can't be specific is that it's not something we collect information on centrally, so that's why—

CHAIR: I think it's not an reasonable question and it's one that I'd like to put on notice—if you could find, for maybe the past decade, how many you have. Other banks have said, quite comfortably, they don't have them, so I would have thought a relatively straightforward check would be able to establish how many you have. So we will put that on notice.
Hansard p. 3-4
11 September 2020
(7 October 2020)
(PDF329KB)
WBC57QON Wilson CHAIR: In terms of merchant routing, what work has been done to increase low-cost routing to merchant facilities, particularly because of the increase in the volume of tap-and-go and merchant facility use by Australians, as against cash, during the COVID-19 pandemic?

Mr King: We've already announced that we will be proactively rolling out that capability to merchants. We've estimated that around 37,000 small businesses will be able to have a lower cost of processing debit transactions. We're in the process of rolling that out. Customers don't need to ask for it.

CHAIR: So it's essentially now a default for your customers to go to a lower-cost option in their circumstances?

Mr King: That's right.

CHAIR: And you said that's going to benefit 37,000 customers of merchants routing. Is that correct?

Mr King: That's correct.

CHAIR: Just to clarify, how many customers in total do you have with merchant facilities?

Mr King: It would be in the order of three million, but I need to check that.

CHAIR: Hang on. You've got three million customers using merchant routing, and there is a benefit to 37,000. What happens to the other 2.6-odd million?

Mr King: There are different arrangements with different customers. But I will take that on notice.

CHAIR: It's actually 2.96 million.

Mr King: Yes, there are different—

CHAIR: I know, but you can see the point. You're coming here extolling the fact that you're offering low-cost routing for 37,000 and saying that this is a wonderful thing—and I'm not arguing against that—but then you tell me you have a merchant facility of three million. That's a very small percentage enjoying that claimed benefit. What's happening with the remainder?

Mr King: They're the ones that will benefit from the change.

CHAIR: The 37,000, yes, but what about the other 2.96 million?

Mr King: They wouldn't benefit if we made the change. I'll take it on notice and I'll give you the specifics.
Hansard p. 6
11 September 2020
(7 October 2020)
(PDF339KB)
WBC58QON Falinski Mr FALINSKI: I'm genuinely interested in your AML breaches, not from the point of view of the things that you did wrong but in terms of—this is one of the things I wonder about—whether we do enough to detect this. My understanding of the situation is that you self-reported the breaches. Is that correct, or am I wrong in that?

Mr King: In relation to the IFTI reporting matters, in 2018 we did report those to AUSTRAC.

Mr FALINSKI: How many foreign exchange transactions do you do each day?

Mr King: Lots. I don't know the exact number. I'll have to take that one on notice.

Mr FALINSKI: Sorry—is that millions of transactions or hundreds of millions of transactions?

Mr King: It would be millions.

Mr FALINSKI: Millions of transactions?

Mr King: No, sorry—we'd do millions of volumes. I'll take it on notice, but we do lots.
Hansard p. 12
11 September 2020
(7 October 2020)
(PDF334KB)
WBC59QON Falinski Mr FALINSKI: Of that 23 million, have you identified how many were of a suspicious nature?

Mr King: We have, and it's a small number.

Mr FALINSKI: Is it thousands, 10, 000, 100,000?

Mr King: I might take that on notice if that's alright, but it's a small number.
Hansard p. 12
11 September 2020
(7 October 2020)
(PDF329KB)
WBC60QON Falinski Mr King: Yes, there are large volumes that go through the payment systems, often small values, and criminals are people who try to get around our controls all the time. It's a never-ending—

Mr FALINSKI: So how can we make the framework here better so that institutions like yours are better able to identify and report on these things? Because AUSTRAC, by the way, clearly missed 23 million. It's understandable that, out of nine trillion, at least, transactions in which you were—

Mr King: Sorry, the trillion number was the value of the transactions as opposed to the number.

Mr FALINSKI: Will you give us the—

Mr King: I'll come back on notice. What I would say is, for me, one of the reflections is how do we share information on activity in a way that gets the system safer? How do we focus on suspicious matters? They're the things we should be asking ourselves, and it's always a balance between privacy and sharing information, which is a hard balance.
Hansard p. 12
11 September 2020
(7 October 2020)
(PDF330KB)
WBC61QON Falinski Mr FALINSKI: Has ASIC ever interviewed any of your bank officers in their homes?

Mr King: Not that I'm aware of.

Mr FALINSKI: Do you want to take that on notice?

Mr King: Sure, I'll take it on notice.
Hansard p. 13
11 September 2020
(7 October 2020)
(PDF321KB)
WBC62QON Bandt Mr BANDT: I accept that. We've got no reason to think that's not the case for decisions that were made after the policy was announced in May. But prior to May this year did the bank get involved in the refinancing of any companies that wanted to expand coal operations in Australia?

Mr King: I'd have to take that on notice.
Hansard p. 14
11 September 2020
(7 October 2020)
(PDF326KB)
WBC63QON Bandt Mr BANDT: …There are companies that are proposing to expand their coal operations in Australia. On the face of it, it would seem to be inconsistent with your policy if you were to support or finance that after May 2020. So I'm interested in knowing whether, prior to May 2020, you did that and whether you are continuing to do that.
One of your competitors has announced that they will effectively be ditching customers that don't have a climate plan. We'll have the opportunity to ask ANZ about that in a bit more detail. Are you aware of that announcement from ANZ?

Mr King: No, I wasn't.

Mr BANDT: I think it was reported earlier this week. Perhaps you could take it on notice to tell us whether that is a commitment your bank will be matching. I will put that question on notice and you can get back to the committee about that.
Hansard p. 14
11 September 2020
(7 October 2020)
(PDF332KB)
WBC64QON Bandt Mr BANDT: I think it was reported earlier this week. Perhaps you could take it on notice to tell us whether that is a commitment your bank will be matching. I will put that question on notice and you can get back to the committee about that. Do you participate in the Australian Sustainable Finance Initiative?

Mr King: Yes, we do.

Mr BANDT: In response to the COVID crisis, ASFI has published a statement calling for the COVID recovery to be aligned with Paris. Has your bank advised, or facilitated advice to, the national COVID-19 commission, established by the government, with respect to the economic recovery?

Mr King: I don't believe we have.

Mr BANDT: Could you take on notice whether you have provided advice to the commission or any of the members. I know you are very proud of your bank's climate policy and consider it to be very stringent. You have come up with policies around thermal coal and your prospective unwillingness to be involved in financing that.
Hansard pp. 14-15
11 September 2020
(7 October 2020)
(PDF324KB)
WBC65QON Bandt Mr BANDT: …I know you are very proud of your bank's climate policy and consider it to be very stringent. You have come up with policies around thermal coal and your prospective unwillingness to be involved in financing that. Do you have similar policies with respect to the expansion of gas?

Mr King: Our focus is transition and working to transition the economy. We see gas as playing a role. I don't think we have gone as far as your question in terms of our gas policy, but we do see it as a transition solution.

Mr BANDT: There are two ways to think about gas: existing gas and the way existing gas-fired power stations, for example, may be used in connection with renewables; and the expansion of gas in Australia, including the expansion of potential gas fields that may or may not be used for domestic power generation. Do you have policies about the financing of the expansion of new gas fields in Australia?

Mr King: I think I will take that one on notice because it is quite a nuanced question.
Hansard p. 15
11 September 2020
(7 October 2020)
(PDF335KB)
WBC66QON Bandt Mr BANDT: Just shifting to a related matter that's still sticking with COVID, has the bank purchased government debt in connection with the COVID crisis—that is, since the government started issuing debt in order to fund its support and recovery packages? Has the bank purchased any of that government debt, federal or state?

Mr King: Yes, we would have because we run a liquidity book which allows us to manage differences in cash flows in the bank and so, yes, we would have bought debt issued by the government.

Mr BANDT: Are you able to tell us how much additional debt you'd have bought since the COVID crisis hit?

Mr King: I'll take that on notice
Hansard p. 15
11 September 2020
(7 October 2020)
(PDF331KB)
WBC67QON Bandt Mr BANDT: With respect to the Term Funding Facility that last week the RBA extended and expanded, effectively providing three-year fixed term loans at 0.25 per cent, I just want to clarify whether your understanding of the latest extension is the same as mine. The original one was tied to business lending, but the expanded one that was announced last week includes a supplementary allowance for loans of up to two per cent of a bank's total outstanding loans, and that appears to include mortgage lending as well. Is that your understanding of the expanded TFF?

Mr King: The size of the TFF depends on the size of the mortgage book and certain parts of it. I haven't got the exact numbers in my head, so the principle's right. And the TFF in part is there to make sure there's plenty of liquidity in the system to keep interest rates down in the economy.

Mr BANDT: I take that as an in principle 'yes' that the extent to which you will be able to access the TFF and the supplementary allowance is now going to be referable to loans that include your mortgage loans, whereas previously it might not have.

Mr King: I'll check that, so I can—

Mr BANDT: Thanks.
Hansard p. 16
11 September 2020
(7 October 2020)
(PDF338KB)
WBC68QON Simmonds Mr SIMMONDS: Can I switch then to concerns I have around the topic of banking transfers being used as a de facto messaging service—and this has particularly been highlighted by the Banking Association recently around domestic violence, for example, as a form of coercion and control. What has your bank done to identify the prevalence of this within your service?

Mr King: Yes, I'm concerned about this as well. This is people putting messages into bank statements, which is not appropriate in some circumstances. We're monitoring that and, where we see behaviour that needs to be reported to law enforcement, we're doing that.

Mr SIMMONDS: CommBank, for example, was talking about identifying people who were using swear words. Can you identify instances where people are using words like 'kill', 'maim' or 'control' within the descriptions of their bank transfers?

Mr King: When I talk about monitoring what people are doing, that's what we're doing. We're looking straight out for those words, but people also find creative ways to spell them without using the exact letters so we look at both the simple and more complex words.

Mr SIMMONDS: Good. That's what I'm trying to drill into, and I don't expect you to have that kind of finer detail at your fingertips. But perhaps you can take on notice and give us a little more information about the capacity of your system to do it and how much detail you can look into in these kinds of transactions. Have you been able to put a figure on the number of transactions where you've identified this as a problem?

Mr King: We'll take it on notice. I don't think it's smart for us to be publishing what we're looking for.

Mr SIMMONDS: Well, I suppose—okay, take it on notice

Mr King: We'll do what we can.

Mr SIMMONDS: I don't just want you to do what you can; I want you to take it really seriously. It is a horrible issue, and what I'm trying to ascertain on behalf of the parliament is: does the parliament need to step in with more regulation for organisations like yours to take these matters further and put more resources into it for you to take more responsibility in terms of reporting it to the police? Or do you have the capacity and the systems to be able to do that at the moment? Any information you could provide in that regard would be helpful to demonstrate that you are taking as seriously as it deserves.

Hansard p. 17
11 September 2020
(7 October 2020)
(PDF339KB)
WBC69QON Simmonds Mr SIMMONDS: What kind of resources have you got in this space of proactively monitoring elder abuse and also proactively monitoring your messaging service from a domestic violence point of view? Can you quantify it in terms of people, resources or money?

Mr King: We look to train all of our customer-facing staff in what to look for. So that's the first thing. Then we have people that are more expert in the area who can be referred to. I think that's a team of 20 people. Then we have the technology pieces to also look at transactions.

Mr SIMMONDS: Do you think that 20 people across an organisation of your size with the transactions that you have are sufficient when it comes to these areas?

Mr King: This is the point of training all of our frontline staff to look out for this. The 20 people are simply, you know, a central team with experts that can provide help to the frontline staff.

Mr SIMMONDS: Great. Any detailed information you can provide on that I would greatly appreciate…
Hansard p. 18
11 September 2020
(7 October 2020)
(PDF335KB)
WBC70QON Simmonds Mr SIMMONDS: …What about during COVID? Have you seen an uptick in the number of customers who have been victims of financial scams?

Mr King: Certainly that has been an area where we are seeing more people tested. Fraud's been an ongoing focus for this bank for some years, so it's something that we do monitor proactively.

Mr SIMMONDS: Do you think there's a particular COVID aspect to it with, in particular, elderly and more vulnerable Australians being stuck at home and therefore answering the landline to some of these scammers or perhaps chatting online to them?

Mr Vance: Yes, I think we have seen that certain types of scams have changed in their emphasis and it certainly does skew towards more elderly customers. Unfortunately, scammers will move their behaviours according to the circumstances and where they see potential targets. There have definitely been shifts in patterns during COVID. We do adjust our algorithms to try to adapt to those situations as well.

Mr SIMMONDS: Okay. They are bloody sophisticated, and you're not going to erase them; it's their full-time gig. So you've adjusted your algorithms; that's good to know. What about in terms of resourcing? Have you upped your resourcing or anything to help Australians, from the bank's point of view, fight back?

Mr Vance: Our resourcing in this area has increased significantly over recent years, both in terms of the people who are developing and refining the algorithms and in terms of the people who are able to deal with the customers and try to track down and prevent money lost to them. It is something we do regard as very important. We have lots of really heart-wrenching stories that come through from this, particularly in the context of this COVID environment. For some vulnerable customers isolated in their house, getting that money back for them is really important.

Mr SIMMONDS: Yes. That would be my next question: are you able to give us some numbers around quantity that the bank has seen come through or even a percentage increase during COVID?

Mr Vance: Can we come back to you on notice with that one?

Mr SIMMONDS: You can absolutely take that on notice.
Hansard p. 18
11 September 2020
(7 October 2020)
(PDF331KB)
WBC71QW Wilson The following exchange took place during the public hearing with the Commonwealth Bank and the Committee on 4 September 2020. Could you outline any data Westpac holds in regards to young mortgage holders and assistance from family members?

Ms HAMMOND: To what extent do you seek personal guarantees, particularly from young people, from family members or from others as a condition of providing people with loans?

Mr Comyn: I couldn't give you the specific proportion in terms of the number of home loans that we'd make where someone would offer a guarantee. Guarantees are a high-risk area from the bank's perspective. There have been examples in the past where people don't adequately understand the risks of providing the guarantee. We've definitely improved the process, the controls and the checks in place. Unfortunately, sometimes that can manifest itself where perhaps a parent may not have fully understood the documentation their child was providing to them and they don't understand the recourse that's available to an institution when you do provide a guarantee. I'd be happy to look into the exact numbers. I suspect it has reduced, and it's been an area of real focus for us and I think the broader industry over the last several years.

CHAIR: Sorry, Ms Hammond, can I just interrupt and ask a follow-up question to that because it's contextually relevant? Does the CBA have any data on young home mortgage applicants who get financial assistance from parents or other family members to support their deposit?

Mr Comyn: We would, Chair. It would probably understate the actual numbers. Sometimes you see survey data where people would say what proportion of their homes are being supported by the bank of mum and dad often or family members. Applicants may—obviously, we'd prefer they didn't—disclose their savings as opposed to a gift, but I suspect that parents or family members are helping a substantial proportion of new borrowers in the market at least at some point.

CHAIR: The data suggests that it's always underreported but, on notice, could you get us that data; and, for the secretary, could we ask that of all of the four major banks?
Written (7 October 2020)
(PDF345KB)
WBC72QW Leigh In the recent House Economics Committee hearing, you noted that your bank no longer sells credit card insurance.

(a) For customers who previously purchased credit card insurance, have you taken steps to identify those who were sold the product when they were not eligible to claim on it? (For example, insurance to cover job loss but the customer was unemployed or retired when they purchased the product)

(b) If credit card insurance customers purchased your product when they were not eligible to claim on the policy, have you refunded them the cost of the policy?
Written (13 October 2020)
(PDF338KB)
WBC73QW Leigh For your bank, please complete the table below relating to your bank’s branch and ATM coverage since 2000 as a point-in-time measure for each of the stated years. Written (13 October 2020)
(PDF445KB)
WBC75QW Wilson 

Of the shareholdings in your bank, at your five most recent Annual General Meetings, what is:

(a) The total number of shares eligible to be exercised for voting?

(b) The total number of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) in total?

(c) The total percentage of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) the total percentage of all shareholdings exercised?

Written

(22 January 2021)
(PDF73KB)

Attachments
(PDF186KB)
(PDF427KB)
(PDF392KB)
(PDF173KB)

WBC76QW Wilson For each year over the last fifty years, what has been the share of lending the bank has provided to finance real estate? Written (17 February 2021)
(PDF89KB)
WBC77QON
Leigh Dr LEIGH: Do you look at the number of people that actually miss out on buying their first-choice property because of your delays?

Mr King: As I said, if a customer says to us that they need a quick turnaround then we respond to that. So, in terms of customer complaints on mortgages, I'd have to take that one on notice.

Hansard p. 43
15 April 2021

(30 June 2021)
(PDF101KB)
WBC78QON
Leigh Dr LEIGH: In terms of the state of the economy, we had the Treasurer saying last year that state government lockdowns would cost the economy $4 billion a week. The cost of Australia not being vaccinated surely isn't $4 billion a week, but it must be pretty considerable, mustn't it? Have you done any modelling on what the decision not to vaccinate the country by October will do to GDP growth?

Mr King: I don't believe our economics team has put out any research on that, but I can check.
Hansard p. 43
15 April 2021
(30 June 2021)
(PDF103KB)
WBC79QON
Simmonds Mr SIMMONDS: Of the customers that have had payments rejected because of abuse, how many have then tried to do it again, or how many have you taken action on under your terms and conditions to exit them from the bank?

Mr Vance: In the context of the first number, of the 4,800 transactions, they belong to 3,500 customers. That gives a feel for it. There's not a heavy instance of repeat behaviour, but, still, 1,300 that have come from a person who's done it before is way too many. I would have to come back with numbers, in terms of both customer exits and the numbers that we've reported to authorities, but we have done both.

Mr King: We've reported around 10 customers to authorities, so it's not a big portion but it's still a lot of people.

Mr SIMMONDS: Sure. I would appreciate you taking those numbers on notice. I would also be interested in the numbers of people you have exited from your own institution because of that behaviour. Do you have people continuously monitoring it?
Hansard p. 46
15 April 2021
(30 June 2021)
(PDF196KB)
WBC80QON
Simmonds Mr SIMMONDS: Obviously, if you're referring people to the police, you're obviously establishing that some of them are malicious and that further action needs to be taken, and you're actively doing that. Do you know how many referrals you are getting from people receiving—did you say receiving it from other financial institutions?

Mr Vance: Yes. We've had 10 notifications of people and all of those are obviously sufficiently serious that the recipient is concerned about those. While I would have to confirm it was all, certainly the vast majority of those would have been passed on.

Mr SIMMONDS: Are you able to break down for me which institutions those 10 are from so that I can understand which institutions are not proactively monitoring this enough?

Mr King: On that question, we know as an industry that this needs to improve, so we will be engaging with each other to make sure everyone's getting to the standard. We will check whether we can provide it, but, certainly from an industry perspective, we all want to get this right.

Mr SIMMONDS: That's great. Any information you could provide in that regard is greatly appreciated.
Hansard p. 47
15 April 2021
(30 June 2021)
(PDF105KB)
WBC81QON
Mulino Dr MULINO: I want to revisit one of the issues that the deputy chair raised which was the work that you've done since the AML breaches were identified. I want to drill down on a couple of aspects of risk management more generally. There was an Ernst & Young report in, I think, 2017. I will just talk about a couple of specific episodes, if you will, over the last couple of years. That talked about the fact that there was less involvement from Westpac's board compared to peer institutions in relation to model approvals, and that might have been in relation to some of the liquidity modelling. It also made reference to the fact that data from the bank's commercial property portfolio was drawn from annual spreadsheets and paper based files. That obviously is more time consuming, but it also raises risks of inaccuracy. I'm wondering when those practices ended, if they have fully ended.

Mr King: Sorry—I don't have it in front of me. In relation to modelling of liquidity, that's a piece that's specifically covered in our CORE program. We've obviously improved it over time, but it is specifically covered in our CORE program. On commercial property, the portfolio historically has actually performed very well. It's not very stressed, so the outcome in that area has been as expected, in terms of the credit quality. But, as I said, a lot of the information was with the bankers, in their physical files, so we're in the process of digitising that information so we also have a digital record. That will help us with modelling of overall outcomes.

Dr MULINO: It's good that the overall results are good, but that obviously doesn't necessarily mean that risks don't remain. You're saying you're basically still transitioning from some of the practices that they identified as problematic?

Mr King: I haven't got the report in front of me, but we're still working on the digitisation of data in our business bank and that would include commercial property.

Dr MULINO: If you wouldn't mind providing an update on notice, that would be great.
Hansard p. 48
15 April 2021
(6 July 2021)
(PDF106KB)
WBC82QON
Mulino

Mr King: Are you referring to the Promentory review of the AUSTRAC matter?

Dr MULINO: Yes.

Mr King: Yes, they did do a review.

Dr MULINO: How far back did they review paperwork?

Mr King: I would probably need to take that on notice, but it was for the period of the AUSTRAC issues, so it would have gone back into the early 2000s.

Dr MULINO: Again, it would be great if you could provide specifics on that.

Mr Vance: Apologies, but could I clarify because we've had two major exercises involving Promontory which would have covered this territory. Is that specific to AUSTRAC or the broader review that they're doing in conjunction with our non-financial risk management?

Dr MULINO: There was a report which was referred to, on 21 January, which involved reviewing board papers and board committee papers. Did they both undertake that desktop analysis?

Mr Vance: Both would have covered that, but 21 January, I expect, would have to have been—

Dr MULINO: It was a 22 January meeting between yourselves, APRA and Promontory.

Mr King: We might follow up with you offline and take it on notice.

Dr MULINO: Yes. It might be specifically in relation to AUSTRAC, but there is reference in some media coverage of a meeting that occurred on 22 January 2021 between Westpac, APRA and Promontory. I'm interested as to whether AUSTRAC was at that meeting.

Mr King: I will take that on notice.

Dr Mulino's office clarified after the hearing that this question refers to media reports of a meeting held between APRA and Westpac on 22 January 2021, at which Promontory was also present. Dr Mulino is seeking clarification about whether AUSTRAC also attended that meeting and what input / involvement AUSTRAC has had with the Promontory review that was provided to APRA in March 2021.

Hansard p. 48
15 April 2021
(30 June 2021)
(PDF169KB)
WBC83QON
Mulino Dr MULINO: For those funds that were identified in that report—there are only three of them—it would be great to get a breakdown of the different fees you're talking about.

Mr Vance: APRA also publishes, in that sense, a guide on fees and a heatmap on fees for those. It breaks those down by administration fees, which is only one component, but it also then publishes a table on the total fees, which covers investment fees, administration fees and cost recoveries from the fund. From our point of view, it is the most meaningful way to look at the cost to members of running the fund, because they look at what the all-up amount is that's coming out from their investment returns, essentially.

Dr MULINO: I think that's right. I think those total admin fees are critical. On a separate point, that's why a number of people have been saying they should be included in benchmarks, which is part of the debate around the current bill. It might be that this could be backed out of information already in the public realm, but it would be interesting to see a breakdown of how much is going back to Westpac, for example, versus other types of fees.

Mr Vance: We can provide that and also the benchmark data.
Hansard p. 51
15 April 2021
(30 June 2021)
(PDF146KB)
WBC84QON
Mulino
Dr MULINO: My last question goes more generally to the way you model GDP. Do you undertake sensitivity analysis around your central case forecast, or do you undertake scenario analyses? How do you think through the uncertainty that we're facing at the minute?

Mr King: When we're thinking about the bank, we do what's called a stress test, which I would describe as 'deep recession'. We're probably not scenario testing, but we're stress testing. That's the big one. We need to do that when we're thinking about our provisioning and our capital levels in the bank. Scenarios about what I would say are smaller changes in the outlook are not something we tend to publish, but we do from time to time have a look at them.

Dr MULINO: If there is anything you can provide on that, that would be interesting—

Mr King: I think we got a question on notice about whether we have done any economic modelling on the different scenarios from COVID, so we will have a look.
Hansard pp. 52-53
15 April 2021
(30 June 2021)
(PDF103KB)
WBC85QON
Leigh Dr LEIGH: So there's no promotion of BT Super through the app?

Mr King: Well, it's available, so you could call that promotion. But ,generally, given the specialist nature of it, they would be referred off to someone to speak to.

Dr LEIGH: So they wouldn't engage in a conversation using the live chat function in which BT Super would be promoted?

Mr King: Not that I'm aware of, but I'm happy to check that.

Dr LEIGH: I would be grateful if you could check that and get back to me.
Hansard p. 59
15 April 2021
(30 June 2021)
(PDF104KB)
WBC86QON
Wilson Dr LEIGH: Staying on BT Super, Anthony Klan had an article on his Klaxon website about BT Super's performance over the past decade, suggesting that, from 2010 to 2017, the return to shareholders had been some 600 per cent—about 10 times the ASX return and significantly more than a BT Super customer would have received over that time. Are the claims made in that article broadly accurate?

Mr King: We've responded to Mr Klan several times, and we don't agree with his analysis.

CHAIR: Is that a no?

Mr King: No.

CHAIR: Just before you proceed, Deputy Chair: I asked was that a no, as in do you agree. And you said no/ Does that mean that you do not agree or you do agree—

Mr King: We don't agree with his analysis.

CHAIR: Okay; thank you.

Dr LEIGH: So you don't agree with the 600 per cent return for BT investment management?

Mr King: We didn't agree with his analysis and we did provide him feedback.

Dr LEIGH: Yes, but let's break it down. So we've got the return to BT investment management. Was that or was that not about a 600 per cent return from 2007 to 2017?

Mr King: I haven't got the specific details with me right now on that particular response. But I can say that we did respond on the article and we didn't agree with the analysis. If I need to respond to specific questions, I'll have to do that on notice.
Hansard pp. 59-60
15 April 2021
(30 June 2021)
(PDF109KB)
WBC87QON
Leigh Dr LEIGH: If the profits of the manager of a fund were growing faster than the balances of those who entrusted their savings to the fund, that would be a problem, wouldn't it?

Mr King: I would need to get underneath it, but it would be hard for that to happen.

Dr LEIGH: It's one thing to click the ticket; it's another thing to earn such large returns that the management company is doing better than the superannuation investors. Wouldn't you agree?

Mr King: It's a very complex area. I will take that on notice and have a look at it. I need to do the analysis.
Hansard p. 60
15 April 2021
(30 June 2021)
(PDF117KB)
WBC88QW
Leigh What is the annual profit Westpac receives from its owned superannuation funds? For each of the last five years, please provide:

(a) Profit from dividend payments; and

(b) Profit for payments for services rendered.
Written (30 June 2021)
(PDF120KB)
WBC89QW
Leigh

Consumer Data Right
(a) How many customers have requested that their data be shared with accredited data recipients through the Consumer Data Right regime?

(b) How long, on average, does it take for the bank to transfer data to accredited data recipients after it has been requested by customers?

(c) What strategies or processes has the bank implemented to overcome the following challenges with Consumer Data Right:

(i) The critical challenge of low consumer trust in the Consumer Data Right system;

(ii) Managing consent; in particular, balancing the need for consumers to understand what they are consenting to without being deterred by excessively complex procedures; and

(iii) The risk of data breaches.

Written
(30 June 2021)
(PDF127KB)
WBC90QW
Leigh

Consumer credit insurance
(a) Does your bank sell consumer credit insurance? If so:

(i) Why?

(ii) Does your bank sell consumer credit insurance on home loans? If so, what is the cents in the dollar payout ratio?

(b) If your bank once sold consumer credit insurance products but has stopped selling these products, what has your bank done to remediate customers who paid for these products in the past?

Written
(30 June 2021)
(PDF114KB)
WBC91QW
Leigh
Remediation
(a) What processes are in place for situations where the bank has identified remediation commitments but cannot find or contact the person?

(b) What does the bank do with these funds?
Written
(30 June 2021)
(PDF128KB)
WBC92QW
Leigh
Branch closures
(a) How many branches will you have at the end of 2021?

(b) For the branch closures that have taken place or are scheduled to take place during 2020 and 2021, please provide the postcode of the branch and an indication of whether the location is regional, suburban or metropolitan.

(c) For the branch closures that have taken place in 2020 and 2021, were there other branches in the postcode that remained open?
Written
(30 June 2021)
(PDF164KB)
WBC93QW
Leigh
Business loans
(a) Are you required to follow responsible lending laws for loans that are predominantly for a business purpose?

(b) Is that requirement different if the family home is being used as security for the business loan?
Written
(30 June 2021)
(PDF116KB)
WBC94QW
Leigh
Lending practices and coercive control
(a) What elements of the loan application process are in place to identify and mitigate the risk that the bank is party to coercive control practices?

(b) Does the bank seek specific information from potential borrowers to identify signs of coercive control practices or financial abuse?
Written
(30 June 2021)
(PDF119KB)
WBC95QW
Wilson
For each financial year over the past decade, please outline the number and percentage of first home owner mortgages that:

(a) have a guarantor?

(b) have lenders mortgage insurance?
Written
(30 June 2021)
(PDF131KB)
WBC96QW
Wilson
For each financial year over the past decade, please outline the number and percentage of first home owner mortgages at your bank that are used for:

(a) building new properties?

(b) purchasing established properties?
Written
(30 June 2021)
(PDF126KB)
WBC97QW
Wilson
What regulatory changes would be necessary to enable banks to lend to individuals with SMSFs, who are in the retirement phase, to allow them to seek credit for the purchase of assets (such as homes) or to address short-term cash flow issues?
Written
(30 June 2021)
(PDF101KB)
WBC98QW
Wilson
At the last round of hearings your bank stated that it could devise a product that utilises superannuation as a form of security to enable Australians to purchase a first home. To do so, please advise what legislative change would be required to enable you to do so?
Written
(30 June 2021)
(PDF101KB)
WBC99QW
Wilson
Pension Loans Scheme
The Pension Loans Scheme (PLS) is a Government scheme that allows older Australians, who own real estate in Australia, to get a voluntary non-taxable fortnightly loan from the Government to supplement their retirement income.

(a) Do you allow customers to use a property that has an existing mortgage or reverse mortgage with your bank as security for the PLS? If not, why?

(b) Do you allow the Government to lodge a caveat for the PLS against the title of a property that has an existing mortgage or reverse mortgage with your bank? If not, why?
Written
(30 June 2021)
(PDF115KB)
WBC100QW
Wilson

Home loan approval timeframes
For all home loan applications you have received in the quarter ending 31 March 2021 (regardless of whether the application was settled):

(a) What is the average and median time from receipt of application by the bank to final approval, for applications received directly through your branch network?

(b) What is the average and median time from receipt of application by the bank to final approval, for applications received through a mortgage broker?

(c) If there is a difference in average and median time from receipt by the bank to approval for applications received through the branch network compared to the those received through a mortgage broker:

(i) What is the reason for the difference?

(ii) How might this impact the competitiveness of mortgage brokers?

(iii) What is the bank doing to equalise the difference in times?

(d) Is an application received through the branch network processed differently from an application received through a mortgage broker? If so:

(i) What is the reason for the difference?

(ii) Is this difference informed by bank policy? If so, why?

Written
(30 June 2021)
(PDF126KB)
WBC106QW
Wilson

Banking services in the Pacific Islands

(a) Please list the countries in the Pacific Islands where your bank currently provides banking services.

(i) Please outline what banking services are offered in each of these countries.

(b) Are there any countries in the Pacific Islands where your bank provided banking services in the past 5 years but no longer provides banking services?

(c) If you have stopped providing banking services to any Pacific Island country, please list the name of the country and for each country explain:

(i) the reason for ending banking services;
(ii) whether the cost of meeting Australian AML/CTF requirements contributed to your decision to stop providing banking services.

Written (8 September2021)
(PDF129KB)


Australia and New Zealand Banking Group Limited

Q No. Member Question Hansard page
and Hearing date
or Written questions

Response

(Publication date)

ANZ01QW Wilson Regarding principal and interest mortgages:

 

(a) How many do you currently provide, and what is their total dollar value?

(b) What is their percentage of your total mortgage products provided?

(c) When the board decides to cut interest rates is the reduction automatically passed through to mortgage holders through lower repayments, or when the board decides to cut interest rates is the reduction in repayments only passed through on request of the holder with the gap paying off additional principal?

(d) If the latter, how many mortgage holders have requested a reduction in repayments as a percentage of principal and interest mortgage holders?

(e) For the last two rate cuts, what was the aggregate dollar value reduction in interest repayments compared to each previous month?           
Written (PDF 60KB)

ANZ02QW 

Wilson 

Regarding interest-only mortgages:

(a) How many do you currently provide, and what is their nominal value?

(b)What is their percentage of your total mortgage products provided?

(c) For the last two rate cuts, what was the aggregate dollar value reduction in interest repayments compared to each previous month?           
Written

(PDF 50KB)

ANZ03QW  Wilson Regarding interest-bearing deposits:


(a) How many deposits are currently held, and what is their aggregate value?


(b) For deposits held, what was their aggregate dollar value in each of  the last six months?


(c) For interest payments, what was the dollar value paid in each of the last six months?

 

(d) What has been the reduction in interest payments resulting from the last two interest rate cuts?           
Written (PDF 56KB)
ANZ04QW Wilson

Over the past six months can you please outline for each month:


(a) The standard variable interest rate(s) for a principal and interest mortgage


(b) The standard variable rate(s) for an interest only mortgage


(c) The standard fixed interest rate(s) for a principal and interest mortgage


(d) The standard fixed rate(s) for an interest only mortgage


(e) The interest rate(s) for term deposits


(f) The interest rate(s) for any other interest-bearing deposit products.

Written (PDF 354KB)
ANZ05QW Wilson  A copy of the bank’s payment term policy or policies. Written (PDF 354KB)
ANZ06QW Wilson

With reference to the bank’s payment term policy or policies that the bank applies to its suppliers of goods and services, and customers of its goods and services:

(a) whether they are consistent between the purchase and sale of goods and services?

(b) in reference to (a), if not, why not?

(c) in reference to (a), if not, will the bank bring them into consistency?

Written (PDF 55KB)
ANZ08QW Wilson

Whether the valuations on infrastructure investments finances by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?

Written            (PDF 53KB)
ANZ09QW Wilson

Whether the valuations on large commercial investments or like large commercial investments financed by the bank are:

(a) independently completed?

(b) whether they are completed and/or reviewed annually?

(c) in reference to (b), if they are reviewed by whom?

(d) in reference to (b), if not annually, how often, the trigger, and the average timeframe between review?

Written

(PDF 76KB)

ANZ10QW Wilson A copy of the bank’s model litigant standards applied to legal proceedings. Written (PDF 353KB)
ANZ11QW Wilson How many class actions are you currently facing, and can you please provide a summary of each case brought against the bank? Written (PDF 73KB)
ANZ12QW Archer Following the Royal Commission, does the ANZ bank believe Landmark customers have been remediated appropriately? Written (PDF 55KB)
ANZ13QW Archer Does the ANZ believe the remediation process has been fair? If so, why? Written (PDF 68KB)
ANZ14QW Archer Does the ANZ believe there was/is an imbalance of power in the remediation process? Written (PDF 43KB)
ANZ15QW Archer Is it true that the ANZ bank ultimately determines the level of remediation provided to individuals/family’s/businesses? Written (PDF 52KB)
ANZ16QW Archer

One customer I have been in contact with, whom the ANZ bank apologised to three times and had a decision against them prior to the Royal Commission, requested over $8 million in compensation for ANZ misconduct. Through the bank remediation process, they have been offered $100,000 and have been informed to go back to the legal system if they are not happy with the decision.

How can such a significant gap exist between two parities if there is not an imbalance of power and how can the customer properly represent themselves with limited resources?

Written (PDF 52KB)
ANZ17QW Archer

I have had concerns raised that perhaps not all money allocation for remediation has ended up in customer hands and that some funds are being allocated to ‘in house costs’ by the bank. Is the total figure for remediation quoted by ANZ equal to the actual amount of money remediated to the customers?

(a) Does this figure include costs associated with remediation and if so, how much of the total has directly been paid to customers?

Written (PDF 57KB)
ANZ18QW Archer

Do you believe the culture of the ANZ has now successfully changed following the extent of misconduct exposed by the Royal Commission?

If so, what measures have been taken to a) achieve this? And b) ensure future misconduct is prevented/detected? 

Written            (PDF 66KB)
ANZ19QON Wilson

CHAIR:  It is one of the key recommendations of the royal commission—that implementing the updated code through the structure of the organisation, and then ultimately being judged against that publicly and against your peers, is a critical part…of ensuring its practical application.

Mr Elliott:  I chair the ABA until the end of this year. Just given the timing, I'm not sure we've actually done a formal submission to the ABA in terms of progress. What we did agree through the ABA is that this is a binding code. If members cannot commit to signing up to the code, they cannot be a member of the ABA. But you're right: we have to go through that more formal checking process to make sure that is the case.

CHAIR:  If that's the case, what's the time frame we can expect you to be doing so?

Mr Elliott:  I'd have to take that on notice. I'm not sure. I'll check with the ABA.

Hansard p.35

15 November 2019

(PDF 48KB)    
ANZ20QON Leigh

Dr LEIGH:  Given what I know about behavioural economics, I'm anticipating that those who are most likely to be sticky and less likely to take the time to call may well be some of the most vulnerable customers. Would it trouble you if that were the case?

Mr Elliott: ...

So there are some behavioural aspects, but, as I said, I am happy to go and look at whether there are any demographic indicators that suggest that, because that would trouble me if that were the case.

Dr LEIGH:  I would be grateful if you could share that analysis with the committee.

Hansard p.38-39

15 November 2019

(PDF 148KB)
ANZ21QON Kelly

Mr CRAIG KELLY:  In response to one of Dr Leigh's questions, you mentioned that your total exposure of loans is about one per cent to fossil fuel industries but a considerable percentage to renewables. Do you know what the number is for the renewable sector?

Mr Elliott: It's about 1½, isn't it?

Mr Corbally: Renewables is definitely less than the total to fossil fuels.

Mr Elliott:  I'll come back to you on the numbers.

Hansard p.46     

15 November 2019

(PDF 47KB)
ANZ22QON Wilson

CHAIR:  What pathway has been provided in terms of information to the retailers about the adoption [of low-cost routing through terminals at retail outlets]?

Mr Elliott:  I'd have to find exactly what that is, but I know we've contacted them all. We've made the technology easy and available to them, and they understand that they can do that if they so wish. I had it in my briefing notes and I can't remember it, but I know that there was an adoption rate of how many have actually elected to use it. It's probably a little bit higher than I imagined it would be, but we can certainly give that to you.

CHAIR:  If you could take that on notice, that would be very good.

Hansard p.54           

15 November 2019

(PDF 46KB)
ANZ23QON Wilson

Mr Corbally:  We have undertaken a program of work over the course of the last couple of years to proactively approach customers, particularly more vulnerable customers, who have persistent levels of credit card debt to encourage them to refinance in exactly the way that you've suggested—by using equity in home loans or other cheaper financial options. But we haven't done any other specific analysis as such.
...

CHAIR:  Just for clarity: what are the numbers of customers who have been in that situation?

Mr Elliott:  I'll get back to you on that. We have the data. Thousands of customers have taken that up. And we continue. That is an ongoing program that we have. We launched it about a year ago.

Hansard p.57           

15 November 2019

(PDF 46KB)
ANZ24QW Wilson Anti-money laundering:

(a) Can you please provide a copy of your anti-money laundering, or like, policy?
Written (PDF84KB)
ANZ25QW Wilson

Merchant facilities and low cost routing:

(a) Do you provide merchant facilities, and if so, to how many customers?

(b) Would your small and medium business customers save money if they moved to low cost routing, and if so, do you actively encourage customers to switch?

(c) If so, how do you encourage small and medium business customers to switch to low cost routing?

(d) Do you think all small and medium business customers should be on low cost routing?

(e) What are the fee structures for different merchant services available, including low cost routing options?

(h) What number and share (percentage of total) of merchant services for all customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?

(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?

(i) What number and share (percentage of total) of merchant services for small and medium business customers:

(i) use low cost routing?

(ii) provide access to low cost routing?

(iii) of those that provide it, default to low cost routing?

(iv) require automated software upgrades to access low cost routing, have they been provided, and what is the rollout schedule and deadline where it has not been provided?

(v) require a user requested software upgrade to access low cost routing, and what has been the uptake?

(vi) require a hardware upgrade to access low cost routing, and how many remain?

(vii) do not provide access to low cost routing?

(viii) and what is the rollout schedule for low cost routing and the deadline where low cost routing has not been provided?

Written (PDF114KB)
ANZ26QW Wilson Interest rates:

(a) Regarding principal and interest mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(b) Regarding interest-only mortgages, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?

(c) Regarding interest-bearing deposits, for the last three rate cuts what was the rate cuts provided, and what was the aggregate dollar value reduction in interest repayments compared to each previous month?
Written (PDF83KB)
ANZ27QW Wilson Terminations for misconduct:

(a) How many employees does the bank have?

(b) How do you define employee misconduct?

(c) How many employees have been cautioned for misconduct over the past five years?

(d) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years?

(e) How many employees have been terminated for misconduct over the past five years?

(f) How many employees have been cautioned for misconduct over the past five years, as a share of all employees over that timeframe?

(g) How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct over the past five years, as a share of all employees over that timeframe?

(h) How many employees have been terminated for misconduct over the past five years, as a share of all employees over that timeframe?

(i) What are the processes available for whistle-blowers into misconduct within the bank?
Written (PDF67KB)
ANZ28QW Wilson Of the twenty highest remunerated employees over the past decade, please provide the number whose total remuneration in a financial year (including all forms of remuneration, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF170KB)
ANZ29QW Wilson Of the twenty highest incentive bonuses paid over the past decade, please provide the number that fall within these brackets? Written (PDF156KB)
ANZ30QW Wilson Of the twenty highest performance bonuses paid over the past decade, please provide the number that fall within these brackets? Written (PDF121KB)
ANZ31QW Wilson Of the twenty highest severance packages over the past decade, please provide the number whose total package (including all forms of accumulated severance package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF80KB)
ANZ32QW Wilson Of the twenty highest termination payments over the past decade, please provide the number whose total package (including all forms of accumulated termination package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF157KB)
ANZ33QW Wilson Of the twenty highest redundancy payments over the past decade, please provide the number whose total package (including all forms of accumulated redundancy package, including but not limited to, base salary, regularized and deferred bonuses and incentives including, but not limited to, shares) falls within these brackets? Written (PDF46KB)
ANZ34QW Wilson International transfer of funds:

(a) What information does AUSTRAC require for reporting of the international transfer of funds?

(b) What data is required to be input for an international transfer of funds?

(c) What data is required to be input for the verification of an international transfer of funds?

(d) What difference is there between the data required for an international transfer of funds, and a verified international transfer of funds?

(e) What information do you provide to AUSTRAC for reporting of the international transfer of funds?

(f) Do you provide data for verified transactions to AUSTRAC?

(g) Do you provide data for unverified transactions to AUSTRAC?

(h) What difference is there between the data required for an international transfer of funds and the data required for AUSTRAC reporting?

(i) What difference is there between the data required for the verification of an international transfer of funds and the data required for AUSTRAC reporting?
Written (PDF117KB)
ANZ35QW Wilson Impact of Coronavirus:

(a) Has the bank completed any assessment or modelling of the potential impact of Coronavirus on the bank, or the Australian economy?

(b) If yes, can it please be provided?
Written (PDF598KB)
ANZ36QW Leigh In January 2020, February 2020, March 2020, and April 2020 (to date):

(a) For each month, how many mortgage customers have requested to defer home loan repayments?

(b) For each month, what percentage of all home loan customers do those requesting deferrals account for?

(c) For each month, what is the average debt for home loan customers requesting repayment deferrals?

(d) For each month, what is the average debt for all home loan customers?
Written (22 June 2020)
(PDF521KB)
ANZ37QW Leigh Some banks have recently changed the default payment amount for mortgage holders, so that borrowers pay only the minimum amount.

(a) Have you done this?

(b) If so, how many borrowers does it affect?

(c) If not, why have you decided not to take this approach?
Written

(11 May 2020)
(PDF328KB)

ANZ38QW
Leigh
On 31 March, the Australian Financial Review wrote that a branch manager at a big four bank was reported for berating staff who weren’t selling enough of the bank’s products, despite customer-facing employees being fearful of losing their jobs or catching the coronavirus.

(a) Did that report refer to ANZ?

(b) If yes, what was done to discipline or counsel the manager?

(c) Have there been any other similar incidents in ANZ branches?

(d) Have you since or previously issued directives to managers about appropriate targets and tactics for product sales?
Written
(13 May 2020)
(PDF328KB)
ANZ39QW Leigh Implementation of Coronavirus SME Guarantee Scheme:

(a) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received in total?

(b) How many credit arrangements has your organisation approved through the Coronavirus SME Guarantee Scheme?

(c) In relation to the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities and not-for-profit entities?

(d) How many credit arrangements for charities and not-for-profit entities has your organisation approved through the Coronavirus SME Guarantee Scheme?

(e) In relation to applications for credit under the Coronavirus SME Guarantee Scheme, how many requests for credit has your organisation received from charities registered with the ACNC?

(f) How many credit arrangements for charities registered with the ACNC has your organisation approved through the Coronavirus SME Guarantee Scheme?
Written (22 June 2020)
(PDF463KB
ANZ40QW Leigh In the months of March, April and May 2020—how many overdrafts or similar short term credit arrangements (other than those initiated through the Coronavirus SME Guarantee Scheme) has your organisation set up with each of the following overlapping populations:

(a) charities and not-for-profit entities;

(b) ACNC registered charities; and

(c) SMEs.
Written (22 June 2020)
(PDF429KB
ANZ41QW Wilson

Westpac has publicly stated that it will defer repayments on credit cards for COVID-19 affected customers (Westpac Freezes Credit Card Charges for COVID-19 hit customers, The Age, 24 April 2020). Therefore, can you please advise:

(a) What processes do you have in place to identify credit card customers who have been impacted by the COVID-19 pandemic?

(b) How many credit card customers have requested deferrals of repayments related to the COVID-19 pandemic?

(c) How many credit card customers have you identified as impacted by the COVID 19 pandemic?

(d) For those credit card customers that you have identified as impacted by the COVID-19 pandemic:

(i) What is the accumulated value of the credit card debt?

(ii) What is the average value of the credit card debt?

(iii) What is the accumulated value of the credit card limit?

(iv) What is the average value of the credit card limit?

(v) What is the accumulated value of the credit card monthly repayments?

(vi) What is the average value of the credit card monthly repayments?

(e) What deferral options are available for credit card customers that you have identified as impacted by the COVID-19 pandemic?

 (i) If none, do you intend on doing so?

Written (22 June 2020)
(PDF429KB
ANZ42QW Bandt In November 2019, CEO Shayne Elliott told the House of Representatives Standing Committee on Economics it did not have a set timeline to exit thermal coal, stating "having a deadline like that is not necessarily helpful".

However just three weeks later, ABC News reported it had seen an internal ANZ email, circulated in July 2019, detailing the bank's "orderly thermal coal mining reduction strategy" which had been approved by the bank's Credit and Market Risk Committee. ABC reported that part of the strategy is to shed more than $700 million of thermal coal loans by 2024, a reduction of 75 per cent.

The email reportedly stated:

"ANZ has benefited by being a dominant financier of this commodity and we recognise this is not an easy time for our team members who have built deep relationships and expertise. However, we also recognise that the time has come to manage this transition in a clearer way." and "The strategy has taken time to develop and is now agreed. We ask you all to support this strategy as we move forward."
Several weeks after that report, at ANZ's 2019 annual general meeting, Shayne Elliott told shareholders no such strategy existed, stating:

"There is no secret strategy. That document was an extrapolation. It was somebody just saying, if this continues at the rate, I've reduced it by 50 per cent, it will be down by 75 per cent at some point in the future. It's not a strategy."

(a) Is it ANZ's continued position that ABC News misreported the existence of an email detailing the bank's "orderly thermal coal mining reduction strategy"?

(b) How does ANZ explain this contradiction?

(c) Does ANZ in fact have plans to reduce by 75 per cent its exposure to thermal coal mining by 2024?
Written  (3 July 2020)
 (PDF33KB
ANZ43QW Wilson

Merchant services and low cost routing:


(a) In terms of your Point of Sale (POS) strategic merchant services:

(i) What is the total number of your POS strategic merchant services customers?

(ii) What is the number of small and medium business customers?


(b) What number and share (percentage of total) of your total strategic merchant services customers and number and share of small and medium business merchant services customers:

(i) Use the Least Cost Routing (LCR) or Merchant Choice Routing (MRC) option for multi-network debit transactions?

(ii) Have a contract for the lowest cost routing option, when including all fees associated with the transaction including interchange and scheme fees?


(c) Is LCR or MCR on multi-network debit transactions offered to all customers as an opt-out option to ensure all get access to savings? If not:

(i) Why?

(ii) Considering that the Reserve Bank of Australia has advocated LCR since 2013, why have you not found a way provide this service and the associated cost savings to all of your merchant services customers?

(iii) Do you believe you are acting in your merchants’ best interests by not passing on possible savings?


(d) Are LCR or MCR services offered on all terminal types for multi-network debit transactions? If not:

(i) Which terminal types do not have LCR or MCR?

(ii) What percentage of your terminal fleet does this represent?

(iii) When do you plan to upgrade those terminal types that do not have LCR or MCR to enable those merchants with those terminal types to access LCR or MCR?


(e) Are LCR or MCR services offered on all pricing plans for multi-network debit transactions? If not:

(i) Which pricing plans do not have LCR or MCR as an option?

(ii) What percentage of your small and medium business merchant customers are on these plans?

(iii) Why?


(f) If you provided all your strategic and small and medium business POS merchant services customers access to the lowest cost scheme on all multi-network debit transactions, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?

(g) If you passed on at POS the lowest cost per transaction via dynamic routing to your merchants, based upon current and eftpos 1 July 2020 pricing, what would the savings be for:

(i) Your strategic merchants customers?

(ii) Your remainder of medium and small business merchant customers?

Written (30 July 2020)
(PDF206KB)
ANZ47QW Wilson

In the context of an exchange that occurred during the House of Representatives’ Standing Committee on Economics’ hearing with the Reserve Bank Governor and the Member for Mackellar on 14 August 2020:

Mr FALINSKI: And I congratulate you for drawing attention to something that people have deliberately ignored for too long, but while we're on the point of bad regulations and unintended consequences, we, the federal parliament, introduced not long ago responsible lending obligations, which essentially have the principle that the lender is responsible for decisions that the borrower makes. Is it your evidence to this committee and to the parliament that that law is not having any impact on credit creation and lending to small business and to those enterprises that are taking a risk in starting new enterprises?

Mr Lowe: That's not my evidence. I think it is having an effect. Just to go back to the legislation the parliament passed, which at a very high level is eminently reasonable, it says that, when extending credit, the loan can't be unsuitable—who could argue with that?—and in making the loan you've got to take reasonable steps that the borrower can repay. Well, who could disagree with those two broad principles? I find it very hard to disagree with them. What has happened is that those principles have turned into hundreds of pages of guidance. Once the compliance people, the lawyers, the regulators and the media get involved, these high-level principles put in law get turned into a lot of guidance, because people don't want to offend these kinds of regulatory requirements.

Mr FALINSKI: Can I humbly put it to you that you're being very generous. Wasn't it the interpretation of the courts, until the recent ASIC v Westpac case, that what this actually did was put the obligations back on lenders to understand absolutely and completely the capacity of borrowers to service a loan? That's why it turned into hundreds of pages and, when this was tested before the courts, especially the lower courts, that's what they found. I guess that's why we say the principle makes sense but the unintended consequence was that it restricted lending in the Australian capital markets.

Mr Lowe: I agree with you. I think the principles in the legislation are sound, but I think the way we've translated those principles into reality needs looking at again. If we can't do that properly, maybe we need to look at the legislation. We can't have a world in which, if a borrower can't repay the loan, it's always the bank's fault. On a portfolio basis, we want banks to make some loans that actually go bad, because if a bank never makes a loan that goes bad it means it's not extending enough credit. The pendulum has probably swung a bit too far to blaming the bank if a loan goes bad, because the bank didn't understand the customer; if it had done proper due diligence—this is the mindset of some—the bank would never have made the loan. So some of the banks have had this mindset, 'Well, we can't make loans that go bad.' I would have to say, though, that in the past three or four months I've heard fewer concerns from the banks about the responsible lending laws. ASIC introduced new guidance. Institutions are gradually coming to grips with those.

Mr FALINSKI: That might be because, under the extraordinary powers we granted the Treasurer, he has given them relief from RLOs.


(a) Can you advise whether the Governor of the Reserve Bank of Australia’s views reflect that of your institution?

(b) Do you agree with the principles established in legislation on responsible lending obligations? If not, which principles and why?

(c) Are there any principles in the legislation that you believe could be amended or replaced that would better enable the bank to provide credit?

(d) Do you agree with ASIC’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(e) Are there any sections in ASIC’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(f) Do you agree with APRA’s guidance notes for the implementation of responsible lending obligations? If not, which sections do you disagree with, and why?

(g) Are there any sections in APRA’s guidance notes for the implementation of responsible lending obligations that could be amended or replaced that would better enable the bank to provide credit?

(h) Have there been any unintended consequences resulting from the rulings of courts or tribunals that have applied strict interpretations of responsible lending obligations?

(i) Have there been any decisions of courts or tribunals, such as AFCA, that you have chosen to appeal? If so, please provide details.

(j) Have you removed any products as a result of responsible lending obligations?

(k) Since 2008, what debt products have you removed from your product list as a result of responsible lending obligations?

Written (27 October 2020)
(PDF310KB)
ANZ48QW Wilson

(a) Have you completed a cost estimation of the impact of implementing responsible lending obligations for:


(i) Your institution? If so, please provide this estimation.

(ii) Your customers? If so, please provide this estimation.

(b) Since the exemption from the responsible lending obligations for small and medium enterprises has been in place:


(i) Have you adjusted your internal processes to assess credit approvals?

(ii) What impact has the exemption had on the bank’s capacity to lend?

(iii) If the exemption has had no effect, why?


(c) Have you seen small and medium enterprises turn to other lines of credit during the coronavirus pandemic? If so, why?

Written (27 October 2020)
(PDF268KB)
ANZ51QON Wilson CHAIR: Thank you very much, Mr Elliot. You, as a bank, do regular economic assessments of the state of the economy and where you see it going, and you've just made some reflections on that. Could you give us an outline about what you see as happening in the economy over the next 12 months?

Mr Elliott: Sure. I would just preface it by saying that this is clearly a very difficult time to make any predictions about the future, because there's the great unknown of how the progress is made on the bigger issue of public health. We understand that that's a very difficult thing to predict. And it is because of the federal government's and state governments' willingness to be responsive and act with speed that it is very difficult to understand what future policies may be. But having said all of that, our current assessment is that, while there's still much concern about the future state of the economy over the next 12 months, it is looking less bad than it did in March when we reported our half-year results. At that time, prior to really understanding the extent and the scale of government support, we were looking at an outlook where unemployment, we thought, might hit 13 per cent, for example. Yet, today, we're a little bit more optimistic. It's still bad. We think that unemployment will reach high single digits. So it is very difficult to say—

CHAIR: High single digits at this point in 12 months, or high single digit at the end of this calendar year?

Mr Elliott: In the next 12 months—in the second quarter of next year is roughly where we think the peak is.

CHAIR: Where do you expect it to be at the end of the calendar year?

Mr Elliott: I'd have to come back on what our team prediction is. I don't have that off the top of my head by month. But it's less bad. It's continuing to move around, as you can rightly imagine.
Hansard p.3
4 September 2020
(1 October 2020)
(PDF97KB)
ANZ52QON Wilson CHAIR: Can you give us some data on notice on the number of people who have applied for assistance through your various credit card facilities, the number that have been granted and the average of benefit, for want of a better phrase, that's been provided, either through deferrals or reduced payments, so that we get some understanding about what measures you're taking?

Mr Elliott: Sure, I'm happy to do that. I would just make one comment if I may. What's been very interesting is that, as opposed to what we've seen in other parts of the world, notably the United States, and also based on our history here in Australia in previous economic crises, Australians are behaving remarkably prudently, which is a good thing. There's been much comment about the increase in savings rates, but we've also seen quite a significant increase in people paying down their credit card debt, which is absolutely the right thing to do—pay down your most expensive debt. The average balances on cards at ANZ, in total, prior to COVID—we would have had lending of about $7 billion to $7.5 billion in our credit card portfolio. That is down in the $5.5 billion at the moment. That is because—
Hansard p.4
4 September 2020
(1 October 2020)
(PDF97KB)
ANZ53QON Wilson CHAIR: I look forward to getting that data. On the royal commission, and the issue of culture, we've seen particularly QBE and AMP—some issues we've had. The organised capital of representative bodies of industry super funds calling for non-disclosure agreements relating to sexual harassment and other matters. How many non-disclosure agreements does ANZ have at the moment?

Mr Elliott: I'm not aware that we have any, but I would need to go and—I'm happy to take that offline. I'm not aware of any. It's not a normal process for us. There will be non-disclosure agreements we have around commercial issues, but in terms of staff conduct, I'm happy to come back and provide the detail.
Hansard p.4
4 September 2020
(1 October 2020)
(PDF94KB)
ANZ55QON Wilson CHAIR: Let's compare it, then, to mortgages. Obviously one of the things that's going to concern a bank, as well as Australians, is what's going to happen in terms of house prices. I've no doubt you've done some modelling. What is ANZ expecting in terms of adjustments in house prices over this financial year?

Mr Elliott: What we expect is that there will be a reduction in house prices, and that's already evident. I think it's important to say that, as you know, Australia's not one market. So there's a danger in looking at averages, but, on average, I think, from memory, our latest forecast was something around the 10 per cent number from peak to trough—somewhere between 10 and 15 per cent.

CHAIR: But that will be weighted in different markets.

Mr Elliott: Yes.

CHAIR: What are you expecting in Sydney and what are you expecting in Melbourne, as averages?

Mr Elliott: I can get you the data. We've published those data. The only reason I'm hesitant is because they keep moving, quite understandably, as the health impacts shift. From memory, it was somewhere in that 10 to 15 per cent bucket, but I'm happy to provide the state-by-state and city-by-city projections that we have, which we do with CoreLogic.
Hansard p.5
4 September 2020
(1 October 2020)
(PDF120KB)
ANZ56QON Wilson CHAIR: Have you done any modelling or assessment of what you think is going to happen in terms of rental income for investor properties?

Mr Elliott: Yes, and that's in that same report, and, again, we would say that that's going to be under pressure, and the simple—

CHAIR: So when you say 'under pressure', how much of a drop do you expect there?

Mr Elliott: I will get you the data. The simple reason is: sadly, the most impacted members of our community, as a result of this downturn, have been those that are employed in retail, tourism, hospitality et cetera. Sadly, those, generally, have tended to be lower income. They tend to be younger people. They, sadly, tend to be more female. And those are more of a renter population than they are necessarily a home-owner population. It is our view at ANZ that that will have an impact on the rental market because of people's inability to continue to pay rents at the current rate, and therefore there will be a reduction in the value of those assets.
Hansard p.5
4 September 2020
(1 October 2020)
(PDF119KB)
ANZ58QON Wilson CHAIR: Has the Victorian lockdown produced a different outcome than in the rest of the country for ANZ in terms of loans for either mortgages or SMEs?

Mr Elliott: Actually, it was surprising and not as material as you might think. Despite the most recent lockdown, we haven't really seen a surge in people applying for deferrals or stress payments. There is a little bit, but it's not as material as one might imagine.

CHAIR: What about in terms of the geographies within the Victorian market?

Mr Elliott: Again, not that I'm aware of. Mark, do you have any insights as to any notable or material differences across the state?

Mr Hand: Not within the state, but, as you say, we've seen virtually no change in the SME market. We still get a handful of inquiries every day from customers looking to go onto a package. We've seen a slight increase in Victoria in the home loan space, but not in the SME space. We'd have to get down into the data to see if there are any significant issues in pockets of Melbourne.
Hansard pp.6-7
4 September 2020
(13 October 2020)
(PDF97KB)
ANZ59QON Leigh Dr LEIGH: But for most of the time since ANZ was founded in 1835, the ratio of pay between the CEO and the lowest-paid worker was much less than what it is now. Does it trouble you that that gap has grown so wide?

Mr Elliott: I think we'd have to go and look at the data. I don't have data about that at my fingertips. I understand why people are concerned about that. With respect, I don't think that's an issue particularly around ANZ. What we do know is that, in my time at ANZ—and I'm not talking about just the CEO—the relativity between the most senior people and the most junior people has reduced. My pay—and, again, I acknowledge that it's a lot of money—is substantially less than my predecessor's was. Everybody that has joined my team, which are the most senior people—and we've had significant turnovers; we've built a new team—have come in at less pay than their predecessors. In fact, if you look at the total cost of senior management over time, it's actually been on a downward trend. I'm sure there would be many who would prefer it came down faster. Again, what a fair and reasonable compensation for management is is an issue for the board and for our shareholders to determine.
Hansard p.11
4 September 2020
(1 October 2020)
(PDF93KB)
ANZ60QON Falinski Mr FALINSKI: Shayne, you previously said that with the models you have about what is going to happen next you draw on people's experiences. The government has been pretty transparent. I think even the Victorian government now is talking about Christmas being more fully open. On the basis of that, where do your models show the Australian economy heading over the next 12 to 48 months?

Mr Elliott: We've never bought the V-shaped recovery argument that people have. And the reason for that is that Australia, for good reasons, is an open, liberal economy and is dependent on the reasonably free flow of goods and people. It's almost impossible to imagine that that totally free flow of goods and people will resume in the short-term, particularly with the obvious ones like tourism and students. So, without them and without immigration, it's very hard to imagine a V-shaped recovery. We imagine it will be a lot more gradual, like a grind out of the recession. We think that GDP in absolute terms—

Mr FALINSKI: Sorry to interrupt. Could you possibly predict when you think that the bottom will be?

Mr Elliott: I will get our economists to come back to you. I think the latest is that we think that the bottom, from an economic point of view, is between now and the end of the year. From the banking point of view—from when do the problems start emerging and people start finding their businesses aren't able to operate?—we think it's probably more like the middle of next year when the crisis will start to hit the banks. We think that GDP recovers, in an absolute sense, at some point in 2022.
Hansard pp.14-15
4 September 2020
(1 October 2020)
(PDF101KB)
ANZ61QON Aly Dr ALY: Picking up on a line of questioning that Dr Leigh was pursuing around sexual harassment, I want to ask about the structures that you have in place. Do you have contact officers in place within your organisation at various levels who are trained to take confidential complaints and pursue investigations around allegations of sexual harassment and also other forms of harassment like bullying and discrimination within the workplace?

Mr Elliott: Yes, we do. At a simple level, in terms of the confidential approach, if people don't feel confident to raise it more publicly in the company we have two. We have a whistleblower program and we have designated whistleblower protection officers who are very senior people, including our chief risk officer, our head of audit and others, who have been trained from a legal perspective in terms of their obligations around confidentiality et cetera but also in how to deal with those complaints and maintain appropriate process. And then we have a completely independent channel, if our people prefer, which is run by one of the professional services firms. So there's no ANZ involvement, if they go that way, and those people have been appropriately trained as well.
To your point about the investigations, we have professional investigations team, which are part of our risk team. As I mentioned before, these are generally people with a police or similar background. That's what their core skill is, and they have been trained in how to be empathetic, how to maintain confidentiality and investigate those claims thoroughly, and then report to management at the appropriate level to decide the appropriate level of consequence.

Dr ALY: And are all your employees made aware of the fact that they don't need to pursue an internal process—that they can go directly to an equal opportunity commission or equal opportunity agency within each jurisdiction, should they have a complaint?

Mr Elliott: We very much promote our whistleblowing channels, as I said, which is either internally, or if they feel uncomfortable they can go externally to make a formal complaint or allegation—that's across all 33 markets in which we operate. To the specifics of your question about the equal opportunities area, I'll just have to check. I'm sure that that is the case, but I will check to make sure that we promote that appropriately.
Hansard p.15
4 September 2020
(1 October 2020)
(PDF100KB)
ANZ62QON Aly Dr ALY: And could you also please check—and perhaps this is a question on notice—how many contact officers you have within your organisation who are fully trained to take complaints and be points of contact for complaints of various natures within your organisation, please?

Mr Elliott: Sure. I will get you that data. As I say, we also report all of that data, and not just the number of people who take the complaints but the number of complaints, the nature of the complaints, the nature of the consequences and how long they take to investigate et cetera. All of that data is made available to our board at a regular level.
Hansard p.15
4 September 2020
(1 October 2020)
(PDF91KB)
ANZ64QON Simmonds Mr SIMMONDS: So you can search for key words, for example, and currently you just do it for swear words. How many transactions would you block in a year where somebody has put inappropriate language in the messaging?

Mr Elliott: I'd have to come back to you on the number.

Mr SIMMONDS: That would be great. If you're searching for these keywords, do your algorithms show you customers who are using vile and inappropriate language frequently and are having their messages blocked frequently?

Mr Elliott: We could find that, yes.
Hansard p.24
4 September 2020
(1 October 2020)
(PDF97KB)
ANZ65QON Simmonds Mr SIMMONDS: If you have numbers, it would be great if you could pass that on. You might be able to give a perspective from the ABA's working group as well, but, if you then identify these customers, what is your understanding of the powers you have to then, say, refer them to police, who might then investigate if it's part of a Family Court or domestic violence matter or something like that? Are you referring it to police or are you just taking your own action to block their accounts or something like that?

Mr Elliott: My understanding is that we block. It's a fair question and I'll need to take that on notice. Again, I don't mean to diminish it, but the difficulty is: sending an abusive text—I'm not clear in terms of our responsibilities to report that to the police. It's different if there is some sort of threat of violence or something else, but, again, if you permit us, I'll take that general subject on notice and we will come back to the committee with a report on what we do—

Mr SIMMONDS: That would be great. Let's just take a threat of violence, for example. If they're not swearing in the message but they're writing, 'I will kill you,' would that be picked up by your algorithm currently?

Mr Elliott: I'm not sure. It's a good question.

Mr SIMMONDS: Take it on notice for me, because I've got some other topics to cover, but, if somebody is doing something like threatening to kill someone—'I will kill you'—and it's part of an ongoing domestic violence matter, then I would like to think that that would be referred to the police. It would be good to get an understanding. If you think that those requirements aren't there for you to refer, or the police don't have the appropriate power at the moment, then we could consider what legislation we have to put in place around that.
Hansard p.24
4 September 2020
(1 October 2020)
(PDF96KB)
ANZ67QON Leigh Dr LEIGH: In July, NAB announced that it would be the first of the Australian banks to cease dealing with unlicensed fee-charging debt-management providers, so-called 'debt vultures'. They felt that that was an appropriate decision in the context of the COVID crisis. Will ANZ follow their lead?

Mr Elliott: I'm going to have to defer because I'm not up to date on this one. Mark, do you have any comments on that?

Mr Hand: Just to say that I'm not actually sure how NAB will operationalise that, because the firms that are used are at the customer's choice. Customers make a decision as to who represents them. We can't refuse to deal with the customer or their representative if they want to deal with us. We obviously see players in the market that we think are better players to deal with, but we have no influence over which representation a customer chooses.

Dr LEIGH: So you don't have any plans to cease dealing with debt vultures?

Mr Elliott: I think, Dr Leigh, what my colleague is suggesting is that the customer chooses to work with one of them. If we then refuse to work with them, we're essentially refusing to work with our customer. So it's sort of a circular question. We preference that they don't use those people, but it is their choice. Maybe I don't understand particularly what NAB are saying, and maybe it's worth us having a look into the detail precisely of what they are suggesting. We do know that AFCA have banned at least one of those representative firms. They will not deal with a certain firm. But I'll take that away and just look and see if I rightly understand what NAB is doing.
Hansard p.26
4 September 2020
(1 October 2020)
(PDF100KB)
ANZ68QON Leigh Dr LEIGH: I'd be grateful if you would. It doesn't strike me that refusing to deal with debt vultures necessitates refusing to deal with the customer. Can I move to the RBA's term-funding facility which offers funding at a fixed rate of 0.25 per cent for three years. How does that compare to your private sources of funding on similar terms?

Mr Elliott: Well, it's lower cost—

Dr LEIGH: How much lower?

Mr Elliott: I'd have to get you to talk to Treasury. The system today is flush with liquidity. The reality is, as I mentioned, we got, I think in Mark's business alone we had something like $12 billion of new deposits, and most of those deposits go into operating accounts which are essentially zero-cost. So it depends what you're comparing it to—now, they're not for three years, and I accept that. And I can get you the technical answer on it. But it's cheaper funding than we would otherwise be receiving, and that's the purpose of it. The purpose is to lower the cost of funding so that banks take advantage of it and continue to lend into the system.

Dr LEIGH: Yes, I'd be grateful if you could get me the details.
Hansard pp.26-27
4 September 2020
(1 October 2020)
(PDF77KB)
ANZ69QW Wilson Does ANZ have any data on young home mortgage applicants who get financial assistance from parents or other family members to support their deposit? If so, please provide the data. Written (1 October 2020)
(PDF91KB)
ANZ70QW Leigh In the recent House Economics Committee hearing, you noted that your bank no longer sells credit card insurance.

(a) For customers who previously purchased credit card insurance, have you taken steps to identify those who were sold the product when they were not eligible to claim on it? (For example, insurance to cover job loss but the customer was unemployed or retired when they purchased the product)

(b) If credit card insurance customers purchased your product when they were not eligible to claim on the policy, have you refunded them the cost of the policy?
Written (13 October 2020)
(PDF73KB)
ANZ71QW Leigh For your bank, please complete the table below relating to your bank’s branch and ATM coverage since 2000 as a point-in-time measure for each of the stated years. Written (13 October 2020)
(PDF101KB)
ANZ73QW Wilson

Of the shareholdings in your bank, at your five most recent Annual General Meetings, what is:

(a) The total number of shares eligible to be exercised for voting?

(b) The total number of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) in total?

(c) The total percentage of shareholdings that have been exercised by:

(i) the Chair?

(ii) a proxy?

(iii) the total percentage of all shareholdings exercised?

Written (16 December 2020)
(PDF142KB)
ANZ74QW Wilson For each year over the last fifty years, what has been the share of lending the bank has provided to finance real estate?
Written

(18 January 2021)
(PDF106KB)

ANZ75QON Wilson CHAIR: To early data on JobKeeper: obviously it ended at the end of March. You track consumer behaviour in data. I know it's early days, but, nonetheless, we now have at least 16 days. What are you seeing?

Mr Elliott: It is really early days, so I think we shouldn't take too much from the data, and there's one important reason for that: through a matter of coincidence, that early data includes Easter. Any extended public holiday period, whether it's Christmas, Easter or otherwise, distorts the data. I do think it's early days. We think we're going to get a better steer on that in the next two weeks, and we'll happily send that through and share that with the committee. There's nothing of concern that we can see in there at this stage, but we'll know more in the coming days.

CHAIR: That would be good, not least because it will help inform decisions by government but also our oversight of the sector.

Hansard p. 32
16 April 2021

(26 May 2021)
(PDF481KB)
ANZ77QON
Leigh Dr LEIGH: Would you take it on notice to supply us with the number of ATMs?

Mr Elliott: Of course, yes.

Dr LEIGH: Have you done work on ATM deserts, places which are no longer served by ATMs, particularly in remote Indigenous communities, for example?

Mr Elliott: I have not, but I wouldn't be surprised if people in my team have. Again, I'm happy to dig that out if we have such analysis.
Hansard p. 39
16 April 2021
(26 May 2021)
(PDF123KB)
ANZ78QON Hammond Ms HAMMOND: Thanks for that. That's a really clear answer. You mentioned $50 billion for renewable investment—was that it?

Mr Whelan: Yes.

Ms HAMMOND: Have you actually committed any of that yet?

Mr Whelan: Yes, we have. It's $50 billion to fund or facilitate, and I will make that distinction, because we might enter into a transaction with a number of other banks. Let's say it's a billion-dollar transaction. We might only facilitate $100 million of that, so we'd only account $100 million of that to our $50 billion. In fact, I think we will hit the target for 2025 earlier, because in the first five months of this year we've already participated globally in 19 transactions, to a total of about $39 billion. I'm not sure exactly how much of that we would count towards our target, but I can take that on notice and get back to you. So the activity in this area is enormous, and it's growing at a rapid rate.
Hansard p. 43
16 April 2021
(26 May 2021)
(PDF214KB)
ANZ79QW
Leigh

Consumer Data Right
(a) How many customers have requested that their data be shared with accredited data recipients through the Consumer Data Right regime?

(b) How long, on average, does it take for the bank to transfer data to accredited data recipients after it has been requested by customers?

(c) What strategies or processes has the bank implemented to overcome the following challenges with Consumer Data Right:

(i) The critical challenge of low consumer trust in the Consumer Data Right system;
(ii) Managing consent; in particular, balancing the need for consumers to understand what they are consenting to without being deterred by excessively complex procedures; and
(iii) The risk of data breaches.

Written (26 May 2021)
(PDF97KB)
ANZ81QW Leigh Remediation
(a) What processes are in place for situations where the bank has identified remediation commitments but cannot find or contact the person?

(b) What does the bank do with these funds?
Written (26 May 2021)
(PDF99KB)
ANZ82QW
Leigh Branch closures
(a) How many branches will you have at the end of 2021?

(b) For the branch closures that have taken place or are scheduled to take place during 2020 and 2021, please provide the postcode of the branch and an indication of whether the location is regional, suburban or metropolitan.

(c) For the branch closures that have taken place in 2020 and 2021, were there other branches in the postcode that remained open?
Written (26 May 2021)
(PDF138KB)
ANZ83QW
Leigh Business loans
(a) Are you required to follow responsible lending laws for loans that are predominantly for a business purpose?

(b) Is that requirement different if the family home is being used as security for the business loan?
Written (26 May 2021)
(PDF70KB)
ANZ84QW Leigh Lending practices and coercive control
(a) What elements of the loan application process are in place to identify and mitigate the risk that the bank is party to coercive control practices?

(b) Does the bank seek specific information from potential borrowers to identify signs of coercive control practices or financial abuse?
Written (26 May 2021)
(PDF408KB)
ANZ87QW
Wilson What regulatory changes would be necessary to enable banks to lend to individuals with SMSFs, who are in the retirement phase, to allow them to seek credit for the purchase of assets (such as homes) or to address short-term cash flow issues?  Written (26 May 2021)
(PDF96KB)
ANZ88QW
Wilson At the last round of hearings your bank stated that it could devise a product that utilises superannuation as a form of security to enable Australians to purchase a first home. To do so, please advise what legislative change would be required to enable you to do so?
Written (26 May 2021)
(PDF128KB)
ANZ89QW
Wilson Pension Loans Scheme
The Pension Loans Scheme (PLS) is a Government scheme that allows older Australians, who own real estate in Australia, to get a voluntary non-taxable fortnightly loan from the Government to supplement their retirement income.

(a) Do you allow customers to use a property that has an existing mortgage or reverse mortgage with your bank as security for the PLS? If not, why?

(b) Do you allow the Government to lodge a caveat for the PLS against the title of a property that has an existing mortgage or reverse mortgage with your bank? If not, why?
Written (26 May 2021)
(PDF91KB)
ANZ96QW
Wilson

Banking services in the Pacific Islands

(a) Please list the countries in the Pacific Islands where your bank currently provides banking services.

(i) Please outline what banking services are offered in each of these countries.

(b) Are there any countries in the Pacific Islands where your bank provided banking services in the past 5 years but no longer provides banking services?

(c) If you have stopped providing banking services to any Pacific Island country, please list the name of the country and for each country explain:

(i) the reason for ending banking services;

(ii) whether the cost of meeting Australian AML/CTF requirements contributed to your decision to stop providing banking services.

Written (2 September 2021)
(PDF143KB)
ANZ97QON
Simmonds Mr SIMMONDS: What about the scenario where somebody who opened an account 20 years ago had declared themselves a student? Obviously life has progressed since then, but you've also got the ability that you don't know—the example straight out of NAB was that somebody could have taken over the account in that period and be now using it for very different purposes. Are you comfortable you don't have those kinds of scenarios where somebody has opened an account and basically hasn't touched it again?

Mr Elliott: I'm sure there are cases there. We monitor activity. To your example: no, I'm not going to know that you were a student and you are now a hairdresser, unless you tell me. The real question is: is there anything unusual in a retail customer account? They look very different to businesses. Frankly, the biggest issue that we have had historically is not so much retail but businesses. You start a business in one area, and, probably for very reasonable reasons, it changes; you might have started manufacturing something, and you have moved into retailing or property development. The best way we will know that is when the activity in your account starts to change—the nature of payments.

Mr SIMMONDS: How many customers a year would DIA flag, in those circumstances?

Mr Elliott: I couldn't tell you. It's a good question. I'm happy to take it on notice.

Hansard p. 46

23 September 2021

 

(22 October 2021)
(PDF407KB)
ANZ98QON
Bandt Mr BANDT: I'm not asking you to divulge anything about confidential discussions with your clients; I'm talking about what's on the public record. New Hope Corporation said publicly that the $600 million arrangement they got from a syndicate of banks, including yours, was 'sufficient to also fund medium-term growth projects, including New Acland stage 3'. Given your previous answer, that should ring some alarm bells for you, shouldn't it?
...
Mr BANDT: I would like you to take that on notice and come back to us, because here is a company that has gone out and said, 'Thanks to funding, including funding from ANZ, we're now able to go and open up New Acland stage 3,' which is something that is very contested. We accept that the IEA and the IPCC have said there is no room to do that. Either they told you when they were seeking the money that they wanted it for New Acland or they told you it was for something else, and then they are going out and using it for a purpose for which they knew they might not have got the funding if they'd told you about it. That should cause you concern, shouldn't it?

Mr Elliott: I don't know that it's appropriate to talk about individual customers. I don't have the details in front of me. I'm happy to take it on notice and talk to you about the application of our policy and if I think we have mis-stepped in any way.

Hansard p.50

23 September 2021

(22 October 2021)
(PDF408KB)
ANZ99QON
Falinski Mr FALINSKI: Let me ask you a question to test how good you really are, Mr Elliott. Do you know how many small business loans you issue are not secured by real property—in particular, the home of the director or the business owner?

Mr Elliott: I'm clearly going to fail on this one! No, I don't know off the top of my head. What I can tell you is that we have about a half a million small business customers and about 150,000 of them borrow from us. If you sit down with most of them, they'll tell you that the most effective way for them to borrow at a decent rate is to de-risk the loan by using their home as security, or perhaps the premises or some other asset. I think that's just a reasonable outcome. So, yes, it's unsurprising that many small-business people use the equity in their home to secure lower-rate finance rather than seek unsecured finance, which by definition will be a lot more expensive. So that's a decision for those small businesses, but I think generally it works out in a pretty balanced way.

Mr FALINSKI: Would it be unreasonable for me to ask you that question on notice? Is that going to take a lot of time?

Mr Elliott: I'd say it’s highly unreasonable! But given it’s you, Mr Falinski, I will certainly do my best. I will get you that data.

Hansard pp. 52-53

23 September 2021

(22 October 2021)
(PDF416KB)
ANZ100QON
Simmonds Mr SIMMONDS: Mr Elliott, I just want to expand on my last line of questioning. Could you just go into your engagement a little bit more, particularly with those who have been subject to these kinds of messages?

Mr Elliott: As I said, the transactions get filtered manually. An individual assesses whether that is abuse or not. If it is deemed to be abuse, the transaction gets stopped, and then we talk to the victim—in this case, the recipient of the intended message—through our customer care angle. Then we would typically write to or communicate with the perpetrator to say why that is unacceptable and ask them to stop doing it, essentially.

Mr SIMMONDS: Can you quantify for me how many you've had to write to?

Mr Elliott: I don't know, and that's where I've let us down and you down, and we've got to build a better system of counting that. It's not acceptable; I'm the first to admit that. So I don't know.

Mr SIMMONDS: Is it worth taking on notice, or is it just that your systems don't allow it at this stage?

Mr Elliott: They don't allow it. I can get my team to do their best estimate, certainly. They did do a sample base for the board, and we can certainly give you what we do know.

Hansard p.56

23 September 2021

(22 October 2021)
(PDF427KB)
ANZ101QON
Simmonds Mr SIMMONDS: I think that's eminently sensible. What stage are your systems at? Are people able to do that reporting at the moment, and then it's just a matter of them being able to block the messages and keep the payments, or are people not able to report that at the moment?

Mr Elliott: They're only able to report in a very manual sense. I've had situations where a customer has written to me and said, 'In my personal circumstances'—typically, through separation, although not always—'this is what's happening.' So it's very manual and it's not appropriate for an organisation of our scale. What we need to be able to do is essentially automate that, maybe through the app or online, where you can click a button and report an abusive message.

Mr SIMMONDS: Okay. How many people have you got manually looking at the individual cases?

Mr Elliott: I don't know, actually. I'd have to come back to you on that. That's part of that financial crime team. We've got 980 people in financial crime. It'll be some segment of that. I couldn't tell you.

Hansard p. 57

23 September 2021

(22 October 2021)
(PDF408KB)

Committee Secretariat contact:

Committee Secretary
Standing Committee on Economics
PO Box 6021
Parliament House
Canberra ACT 2600

Phone: (02) 6277 4587
Fax: (02) 6277 4774
economics.reps@aph.gov.au