Response

(Publication date)

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?

NAB02QW 

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?

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?

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.

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?

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?

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?

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

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

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

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)

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

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

Hansard p. 32

15 November 2019

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?

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?

(PDF77KB)

(13 May 2020)

Attachment 1
(PDF91KB)

Attachment 2
(PDF501KB)

Attachment 3
(PDF298KB)

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.

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?

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?

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

(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?

(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.

(2 October 2020)
(PDF114KB)

(2 October 2020)
(PDF109KB)

Attachment
(PDF1,461KB)

(2 October 2020)
(PDF120KB)

Attachment
(PDF6,178KB)

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?

(27 July 2021)
(PDF138KB)

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?

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?

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?

(14 April 2021)
(PDF126KB)

Attachment
(PDF282KB)

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?

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.

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?

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?

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

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

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

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.

Hansard p. 15

9 September 2021

Hansard p. 16

9 September 2021

Hansard p. 19

9 September 2021

Hansard p. 26

9 September 2021

Hansard p. 27

9 September 2021

Response

(Publication date)

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?

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?

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?

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.

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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/

8 November 2019

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.

8 November 2019

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.

8 November 2019

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?

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.

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?

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?

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?

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.

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?

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?        

(8 April 2020)
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(13 May 2020)
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(22 June 2020)
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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?

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?

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.

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

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?

(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?

(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.

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?

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?

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.

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?

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?

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?

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?

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?

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?

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?

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

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

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

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.

Hansard p. 14

23 September 2021

19 November 2021
(PDF528KB)

Hansard p. 17

23 September 2021

Hansard p. 18

23 September 2021

Hansard p. 20

23 September 2021

Hansard p. 21

23 September 2021

Hansard p. 22

23 September 2021

Hansard p. 23

23 September 2021

Hansard pp. 7-8

23 September 2021

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?

(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?     

(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?

(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.

(PDF 885KB)

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.

8 November 2019

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

8 November 2019

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

8 November 2019

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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.

8 November 2019

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?

8 November 2019

(PDF 323KB)

Attachment 1
(PDF 100KB)

Attachment 2
(PDF 203KB)

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

8 November 2019

(PDF 341KB)

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

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.

8 November 2019

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.

8 November 2019

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?

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.

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?

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?

(PDF 323KB)

Attachment
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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?

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.

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?

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?

(PDF 92KB)

Attachment 1
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Attachment 2
(PDF 92KB)

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?

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?

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.

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

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?

(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?

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.

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?

(22 January 2021)
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Attachments
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Hansard p. 43
15 April 2021

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.

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.

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?

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?

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.

Hansard p. 42

9 September 2021

(19 November 2021)
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Hansard p. 54

9 September 2021

Hansard p. 57

9 September 2021

Hansard p. 60

9 September 2021

Response

(Publication date)

(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?

ANZ02QW 

Wilson 

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

(PDF 50KB)

(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?

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.

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?

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?

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?

(PDF 76KB)

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?

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?

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? 

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.

15 November 2019

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.

15 November 2019

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.

15 November 2019

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.

15 November 2019

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.

15 November 2019

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?

(11 May 2020)
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