We did not deal unfairly with mortgage customers: Bankwest and CBA

Bankwest and parent bank the Commonwealth Bank have strongly denied acting unfairly or inappropriately when they terminated property loans to business customers following the acquisition of Bankwest by the Commonwealth Bank in December 2008 for $2.1 billion.

The statements were posted on the ABC’s Four Corners website following last night’s broadcast of “Happy Banking” which featured interviews with Bankwest customers who claimed they were treated unfairly following the Commonwealth Bank takeover.

Both Bankwest and the CBA declined to be interviewed by Four Corners.

The show featured interviews with a developer, a couple who dreamed of owning a holiday motel as a retirement nest egg and a publican who ran a country pub, who all claimed unfair and harsh action by Bankwest - following the Commonwealth Bank takeover - caused them to lose their businesses.

“The terms of the sale [to the Commonwealth Bank] had no impact on the Bank’s approach to its business lending and we strongly deny the speculation that the sale agreement encouraged the Bank to deal unfairly with customers,” said Bankwest in a statement.

“Claims that the CBA/Bankwest took unnecessary recovery action to generate a larger adjustment in the purchase price are completely baseless because...it is inconceivable that HBOS (the former UK owner of Bankwest), as vendor, would allow CBA as the purchaser to unilaterally take action that could decrease the purchase price,” added Bankwest.

In a separate statement the CBA said there was no basis for speculation or conjecture that Bankwest customers were treated unfairly due to the terms of the Bankwest acquisition.

The CBA says it was “standard practice” under the type of sales agreement negotiated with Bankwest for a “purchase price adjustment process to ensure that the final price accurately reflected the balance sheet of Bankwest”.

Furthermore, CBA says Bankwest honoured all existing contractual and credit commitment post-acquisition adding that it was the interests of Bankwest to “rehabilitate customers in financial difficulty”.

“Bankwest only appoints receivers if it considers it appropriate,” the CBA says.

In its statement Bankwest says that while it is in its “clear commercial interests, to rehabilitate customers in financial difficulty.

“[However] unfortunately some customers cannot be rehabilitated and do fail and the bank takes appropriate steps to protect its position”

Bankwest points out that “the number of individuals coming forward with complaints about Bankwest are only a small fraction of the 1 million plus Bankwest customers”

The bank also labelled as “false” accusations that it sold properties for a fraction of their value:

“If Bankwest were to sell at under market value it is generally the Bank that would bear the loss thus it does not make any sense for it do this.

“Bankwest does not gain anything by selling properties for less than market value and relies on independent valuers and selling agents to sell properties.”

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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