CBA admits fault on Storm Financial client loans
The Commonwealth Bank of Australia (CBA) has issued an apology regarding its involvement with the clients of failed financial planning group Storm Financial.
A statement issued by the bank said it acknowledged that while the circumstances relating to some clients of Storm were "not caused directly by the bank", they did involve CBA to "some degree".
CBA chief executive Ralph Norris said the bank had identified "shortcomings in how we lent money to our customers involved with Storm Financial".
"We are not proud of our involvement in some of these issues and we are working toward a fair and equitable outcome for our affected customers."
Norris said those affected "can be assured that where we have done wrong, we will put it right".
"I am committed to the identification and resolution of all issues relating to the bank's involvement with Storm Financial," Norris said.
The statement, which the bank issued to the Australian Securities Exchange, said it would meet its obligations to customers who are in financial difficulty "as a result of any shortcomings identified in the bank's lending practices".
The bank said it would "immediately suspend repayment obligations until 31 August 2009 for all loans made to customers in relation to Storm Financial".
The statement also said any settlements already reached between the bank and some customers would not preclude them from having their situations reviewed and improved, if that is what it takes for the bank to meet its obligations.
CBA will provide funds to cover the costs of independent legal and financial advice for those affected.
Norris, however, placed the blame for the losses incurred by the clients as a result of the financial advice provided by Storm Financial firmly with the financial planning group, saying the bank was not responsible for the advice provided by Storm.
"That was clearly the responsibility of Storm Financial, a licensed financial advisory company," Norris said.
The statement from the bank said it is continuiung its discussions with the Australian Securities and Investments Commission regarding the matter.
CBA said it would "learn from the mistakes made in relation to Storm Financial customers".
"We will do everything possible to ensure that they will not recur."
CBA said the Storm Financial issue involved around 2,500 of its customers. CBA said the financial impact on the bank as a result of this issue is not considered material, but it did acknoweldge the "impacts for customers are more than financial".
AUTHOR
Recommended for you
With Fortnum Private Wealth and Professional Financial Services now unified under the Entireti umbrella company, CEO Neil Younger has detailed to Money Management the firm’s new direction and future expansion.
The FAAA has suggested looking offshore for overseas financial advisers to ease the adviser shortage, but are employers willing to take on the burden of workplace visas?
There may be a huge influx of alternatives coming to the market, but timing and access difficulties mean advisers can easily end up disappointed with their selection, according to Morningstar global CIO Dan Kemp.
An NSW individual has pleaded guilty to one criminal charge of providing unlicensed financial services after promoting crypto investments at national seminars.
