The Commonwealth Bank of Australia (CBA), or CommBank, is an Australian
multinational bank
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Because ...
with businesses across
New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
,
Asia
Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an are ...
, the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
and the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
. It provides a variety of
financial service
Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...
s including retail, business and institutional banking,
funds management
Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...
,
superannuation, insurance, investment and broking services. The Commonwealth Bank is the largest Australian listed company on the
Australian Securities Exchange as of August 2015 with brands including
Bankwest
Bankwest is an Australian full-service bank based in Perth, Western Australia. It was sold in October 2008 to the Commonwealth Bank of Australia for 2.1 billion and operates as a division of its parent company.
Bankwest previously had branch ...
, Colonial First State Investments,
ASB Bank (New Zealand),
Commonwealth Securities
CommSec is Australia's largest online brokerage firm, stockbroking firm. It is a subsidiary of the Commonwealth Bank.
Though its Internet trading platform constitutes the vast majority of its business, it also offers a telephone based brokerage ...
(CommSec) and Commonwealth Insurance (CommInsure).
Its former constituent parts were the Commonwealth Trading Bank of Australia, the Commonwealth Savings Bank of Australia, and the Commonwealth Development Bank.
Founded in 1911 by the
Australian Government
The Australian Government, also known as the Commonwealth Government, is the national government of Australia, a federal parliamentary constitutional monarchy. Like other Westminster-style systems of government, the Australian Government ...
and fully privatised in 1996, the Commonwealth Bank is one of the "
big four" Australian banks, with the
National Australia Bank (NAB),
ANZ
ANZ may refer to:
People
* Anz (musician), a British DJ and electronic musician
Banks
* ANZ (bank), Australia and New Zealand Banking Group Limited, the fourth-largest bank in Australia
** ANZ Bank New Zealand, the largest bank in New Zealand
** ...
and
Westpac
Westpac Banking Corporation, known simply as Westpac, is an Australian multinational banking and financial services company headquartered at Westpac Place in Sydney, New South Wales.
Established in 1817 as the Bank of New South Wales, ...
. The bank was listed on the Australian Stock Exchange on 12 Sep 1991.
The former global headquarters of Commonwealth Bank were the
Commonwealth Trading Bank Building
The Commonwealth Trading Bank Building, also known as the Commonwealth Bank Building, is a historically significant building in the Sydney central business district, New South Wales, Australia, located on the corner of Pitt Street and Martin Pl ...
on the corner of
Pitt Street
Pitt Street is a major street in the Sydney central business district in New South Wales, Australia. The street runs through the entire city centre from Circular Quay in the north to Waterloo, although today's street is in two disjointed sect ...
and
Martin Place
Martin Place is a pedestrian mall in the Sydney central business district, New South Wales, Australia. Martin Place has been described as the "civic heart" of Sydney. ,
Sydney, which was refurbished from 2012 for retail and commercial uses, and (from 1984 to 2012) the
State Savings Bank Building on
Martin Place
Martin Place is a pedestrian mall in the Sydney central business district, New South Wales, Australia. Martin Place has been described as the "civic heart" of Sydney. , which was sold in 2012 to
Macquarie Bank
Macquarie Group Limited () is an Australian global financial services group. Headquartered and listed in Australia (), Macquarie employs more than 17,000 staff in 33 markets, is the world's largest infrastructure asset manager and Australia's t ...
. The headquarters were moved to Tower 1, 201 Sussex Street and two new nine-storey buildings which were built at the site of the former
Sega World Sydney, in
Darling Harbour on the western side of Sydney's city centre.
In 2018, findings from the
have indicated a negative culture within the Bank, amid allegations of fraud, deception, and money laundering, among various other crimes.
History
Foundation (1911–1919)
The Commonwealth Bank of Australia was established by the ''Commonwealth Bank Act 1911'', introduced by the
Andrew Fisher
Andrew Fisher (29 August 186222 October 1928) was an Australian politician who served three terms as prime minister of Australia – from 1908 to 1909, from 1910 to 1913, and from 1914 to 1915. He was the leader of the Australian Labor Party ...
Labor
Labour or labor may refer to:
* Childbirth, the delivery of a baby
* Labour (human activity), or work
** Manual labour, physical work
** Wage labour, a socioeconomic relationship between a worker and an employer
** Organized labour and the la ...
Government, which favoured bank
nationalisation, with effect on 22 December 1911.
In a rare move for the time, the bank was to have both savings and general bank business. The bank was also the first bank in Australia to receive a federal government guarantee. The bank's earliest and most strenuous proponent was the flamboyant American-Australian Labor politician,
King O'Malley
King O'Malley (2 July 1858? – 20 December 1953) was an American-born Australian politician who served in the House of Representatives from 1901 to 1917, and served two terms as Minister for Home Affairs (1910–1913; 1915–16). He is remember ...
, and its first Governor was Sir
Denison Miller
Sir Denison Samuel King Miller , (8 March 1860 – 6 June 1923) was the first governor of the Commonwealth Bank of Australia.
Early life
Miller was born at Fairy Meadow, near Wollongong, New South Wales, the son of Samuel King Miller, head t ...
.
The bank opened its first branch in
Melbourne
Melbourne ( ; Boonwurrung/Woiwurrung: ''Narrm'' or ''Naarm'') is the capital and most populous city of the Australian state of Victoria, and the second-most populous city in both Australia and Oceania. Its name generally refers to a met ...
on 15 July 1912. In an agreement with
Australia Post that exists to this day, the bank also traded through post office agencies. In 1912, it took over the
State Savings Bank of Tasmania
State may refer to:
Arts, entertainment, and media Literature
* ''State Magazine'', a monthly magazine published by the U.S. Department of State
* ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States
* ''Our S ...
, and by 1913 it had branches in all six states.
In 1916, the bank moved its head office to
Sydney. It also followed the Australian army into
New Guinea
New Guinea (; Hiri Motu: ''Niu Gini''; id, Papua, or , historically ) is the world's second-largest island with an area of . Located in Oceania in the southwestern Pacific Ocean, the island is separated from Australia by the wide Torr ...
, where it opened a branch in
Rabaul and agencies elsewhere.
Central bank (1920–1959)
![CBA Martin Place 001](https://upload.wikimedia.org/wikipedia/commons/2/22/CBA_Martin_Place_001.jpg)
In 1920, the bank began acquiring
central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central b ...
powers when it took over the responsibility for the issue of Australian bank notes from the Department of the Treasury. Also in 1920, the Commonwealth Bank took over the
Queensland Government Savings Bank
The Queensland Government Savings Bank was a bank in Queensland, Australia. It was operated by the Queensland Government. It was also known as the Government Savings Bank of Queensland.
History
The Queensland Government Savings Bank was establ ...
.
In 1924, the federal government of
Stanley Bruce
Stanley Melbourne Bruce, 1st Viscount Bruce of Melbourne, (15 April 1883 – 25 August 1967) was an Australian politician who served as the eighth prime minister of Australia from 1923 to 1929, as leader of the Nationalist Party.
Born ...
sought to place further checks and limits on the powers of the governor of the bank, and passed the ''Commonwealth Bank Act, 1924'', which created a seven-member Board of Directors comprising the Governor, the Secretary of the Treasury, and six directors "actively engaged in agriculture, commerce, finance or industry", and a Chairman of the Board elected annual from its members. The first six board members was appointed on 10 October 1924:
Sir John Garvan,
Sir Robert Gibson,
Sir Samuel Hordern
Sir Samuel Hordern (24 September 1876 – 3 June 1956) was an Australian businessman, animal breeder and philanthropist. Born into the prominent Sydney trading family, Hordern directed the family company of Anthony Hordern & Sons from 1909 t ...
,
Robert McComas, Richard Samuel Drummond, and John McKenzie Lees.
Garvan was appointed as the first chairman on 13 October 1924.
In 1931, the bank board came into conflict with the
Labor
Labour or labor may refer to:
* Childbirth, the delivery of a baby
* Labour (human activity), or work
** Manual labour, physical work
** Wage labour, a socioeconomic relationship between a worker and an employer
** Organized labour and the la ...
government of
James Scullin
James Henry Scullin (18 September 1876 – 28 January 1953) was an Australian Labor Party politician and the ninth Prime Minister of Australia. Scullin led Labor to government at the 1929 Australian federal election. He was the first Cathol ...
. The bank's chairman Sir Robert Gibson refused to expand credit in response to the
Great Depression, as had been proposed by Treasurer
Edward Theodore
Edward Granville Theodore (29 December 1884 – 9 February 1950) was an Australian politician who served as Premier of Queensland from 1919 to 1925, as leader of the state Labor Party. He later entered federal politics, serving as Treasurer in ...
unless the government cut pensions, which Scullin refused to do. The conflict surrounding this issue led to the fall of the government, and to demands from Labor for reform of the bank and more direct government control over monetary policy.
Also in 1931, it took over the savings bank business of the
Government Savings Bank of New South Wales (est. 1871), the current account and fixed deposit business of the NSW Rural Bank Department, and the State Savings Bank of Western Australia (est. 1863).
In 1942, the Commonwealth Banking Corporation (CBC) suspended its operations in
Papua New Guinea
Papua New Guinea (abbreviated PNG; , ; tpi, Papua Niugini; ho, Papua Niu Gini), officially the Independent State of Papua New Guinea ( tpi, Independen Stet bilong Papua Niugini; ho, Independen Stet bilong Papua Niu Gini), is a country i ...
as the
Imperial Japanese Army
The was the official ground-based armed force of the Empire of Japan from 1868 to 1945. It was controlled by the Imperial Japanese Army General Staff Office and the Ministry of the Army, both of which were nominally subordinate to the Emperor o ...
captured many of the towns in which it operated, and bombed
Port Moresby
(; Tok Pisin: ''Pot Mosbi''), also referred to as Pom City or simply Moresby, is the capital and largest city of Papua New Guinea. It is one of the largest cities in the southwestern Pacific (along with Jayapura) outside of Australia and New ...
. The bank resumed operations later, possibly in 1944.
The bank had many branches across Papua New Guinea including Port Moresby, Boroko, Rabaul, Lae, Wau, Bulolo, Goroka, Kavieng, Madang, Mount Hagen, Kundiawa, Popondetta, and Wewak. On Bougainville, there was Kieta, Panguna, Arawa and early on a part-time sub-branch at Loloho. It maintained those facilities to support trade, local business, government, and small savers.
The Commonwealth Bank received almost all central bank powers in emergency legislation passed during
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...
and at the end of the war, it used this power to begin a dramatic expansion of the economy. This was also the aim of the federal government at the time, which attempted to compel the Australian states to conduct their banking with the Commonwealth under the ''Banking Act 1945'' (Cth), but the High Court in ''Melbourne Corporation v Commonwealth'' (1947) 74 CLR 31, blocked this move.
In August 1945, the federal government of
Ben Chifley
Joseph Benedict Chifley (; 22 September 1885 – 13 June 1951) was an Australian politician who served as the 16th prime minister of Australia from 1945 to 1949. He held office as the leader of the Australian Labor Party (ALP) from 1945, follow ...
passed the ''Commonwealth Bank Act, 1945'', which repealed the 1925 act and abolished the Board of Directors, returning full executive control of the bank to the Governor.
The government also dramatically expanded immigration programs. In response, the bank established a Migrant Information Service (later known as the Australian Financial & Migrant Information Service, or AFMIS). The bank expanded during this period, and in just five years it opened hundreds of branches throughout Australia and in 1951 it established a branch in the
Solomon Islands
Solomon Islands is an island country consisting of six major islands and over 900 smaller islands in Oceania, to the east of Papua New Guinea and north-west of Vanuatu. It has a land area of , and a population of approx. 700,000. Its capit ...
.
In 1958 and 1959, there was a controversy concerning the dual functions of the organization, operating as the central bank on the one hand and a commercial bank on the other. As a result, the government separated the two roles, creating the
Reserve Bank of Australia
The Reserve Bank of Australia (RBA) is Australia's central bank and banknote issuing authority. It has had this role since 14 January 1960, when the ''Reserve Bank Act 1959'' removed the central banking functions from the Commonwealth Bank.
Th ...
to exercise the central bank function, and leaving the Commonwealth Banking Corporation to operate purely as a commercial bank. Those commercial functions were exercised by the organization's constituent sections: the Commonwealth Trading Bank of Australia, the Commonwealth Savings Bank of Australia, and the newly-formed Commonwealth Development Bank.
From 1958 to 1976 the Commonwealth Bank operated savings bank agencies in the
New Hebrides
New Hebrides, officially the New Hebrides Condominium (french: link=no, Condominium des Nouvelles-Hébrides, "Condominium of the New Hebrides") and named after the Hebrides Scottish archipelago, was the colonial name for the island group ...
.
Diversification (1960–1991)
A new Commonwealth Development Bank was established in 1960 and during the 1970s the bank diversified its business into areas like insurance and travel. It established a finance company, CBFC in 1974. The bank also became more heavily involved in foreign currency trading and international banking in general.
The bank actively supported the introduction of
decimal currency
Decimalisation or decimalization (see spelling differences) is the conversion of a system of currency or of weights and measures to units related by powers of 10.
Most countries have decimalised their currencies, converting them from non-decimal ...
in the years leading up to 1966 and, like most banks, it gradually converted its paper records onto a new computer-based system. The bank created the first
credit card
A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
in Australia in 1974 when it established
Bankcard. In later years the bank began offering
MasterCard (1984) and
Visa
Visa most commonly refers to:
*Visa Inc., a US multinational financial and payment cards company
** Visa Debit card issued by the above company
** Visa Electron, a debit card
** Visa Plus, an interbank network
*Travel visa, a document that allows ...
(1993) cards as well.
In 1974, as
Papua New Guinea
Papua New Guinea (abbreviated PNG; , ; tpi, Papua Niugini; ho, Papua Niu Gini), officially the Independent State of Papua New Guinea ( tpi, Independen Stet bilong Papua Niugini; ho, Independen Stet bilong Papua Niu Gini), is a country i ...
approached independence, the bank formally handed over its PNG operations to the newly created and government-owned
Papua New Guinea Banking Corporation Papua most commonly refers to:
* New Guinea, the world's second-largest island in the southwestern Pacific Ocean
* Western New Guinea, the western half of the island of New Guinea, which is administered by Indonesia.
** Papua (province), an Indones ...
(PNGBC). The bank retained a restricted branch in Port Moresby that it finally closed in 1982.
In 1981 the bank transferred its operations in the
Solomon Islands
Solomon Islands is an island country consisting of six major islands and over 900 smaller islands in Oceania, to the east of Papua New Guinea and north-west of Vanuatu. It has a land area of , and a population of approx. 700,000. Its capit ...
to the
National Bank of Solomon Islands, which operated as a joint venture (51% Commonwealth Bank, 49% Government of the Solomon Islands).
In 1989 the bank acquired 75 per cent of
ASB Bank in
New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
.
In 1991 the bank acquired the failing Victorian Government-owned
State Bank of Victoria
The State Bank of Victoria was an Australian bank that existed from 1842 until 1990 when it was taken over by the Commonwealth Bank. It was owned by the State of Victoria.
History
A government-controlled savings bank had been founded on 1 Janua ...
(est. 1842).
Privatisation (1991–present)
Between 1991 and 1996 the Australian Government under the
Keating regime fully privatised the Commonwealth Bank. The first share offer in 1991 was valued at $1,292 million, the second in 1993 for $1,700 million and the third was sold for $5,000 million in 1996. It is a public company, but one of the few such companies in Australia whose official name does not end in 'Limited'.
In 1994 Commonwealth sold its shares in
National Bank of Solomon Islands to
Bank of Hawaii
The Bank of Hawaii Corporation ( haw, Panakō o Hawaii; abbreviated BOH) is a regional commercial bank headquartered in Honolulu, Hawaii. It is Hawaii's second oldest bank and its largest locally owned bank in that the majority of the voting sto ...
. In 1994, Commonwealth took a 50% share in PT Bank International Indonesia.
On 10 March 2000, the Commonwealth Bank and Colonial Limited announced their intention to merge, with seven Commonwealth Bank shares being offered for twenty Colonial Shares. The merger received final approval from the Supreme Court of Victoria on 31 May 2000 and was completed on 13 June 2000. This brought into the fold Colonial’s stake in
Colonial National Bank
The full name of the bank is National Bank of Fiji trading as Colonial National Bank. The bank is as of December 2009 a subsidiary of Bank South Pacific and has the largest branch network in Fiji. It also has a majority holding in one of the tw ...
, the former National Bank of Fiji. The bank also acquired the remaining 25% of
ASB Bank.
Banking opportunities in Asia saw the Bank in 2000 acquire full ownership of PT Bank International Indonesia and rename it (PT Bank Commonwealth). This bank now has over 16 branches and has opened several FX shops to cater to Commonwealth Bank clients who are tourists in
Bali.
In 2005, the bank established strategic co-operation agreements with two Chinese banks, Jinan City Commercial Bank and Hangzhou City Commercial Bank; it took an 11% stake in Jinan Commercial, and a 19.9% stake in Hangzhuo Commercial. Commonwealth also established a representative office in
Bangalore
Bangalore (), List of renamed places in India, officially Bengaluru (), is the Capital city, capital and largest city of the Indian state of Karnataka. It has a population of more than and a metropolitan area, metropolitan population of a ...
,
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
.
On 27 January 2006, the bank acquired the remaining 49% stake in Colonial National Bank (Fiji).
![Tumbalong Park DSC08472 (cropped)](https://upload.wikimedia.org/wikipedia/commons/d/d8/Tumbalong_Park_DSC08472_%28cropped%29.jpg)
At the beginning of 2008, Commonwealth Bank opened a branch in
Ho Chi Minh City (Saigon). Then in October, Commonwealth announced that it had purchased
Bankwest
Bankwest is an Australian full-service bank based in Perth, Western Australia. It was sold in October 2008 to the Commonwealth Bank of Australia for 2.1 billion and operates as a division of its parent company.
Bankwest previously had branch ...
and St Andrew's Insurances from their parent company
HBOS plc
HBOS plc was a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group, having been taken over in January 2009. It was the holding company for Bank of Scotland plc, which operated the Bank ...
for
A$2.1 billion. The acquisition was scheduled to be completed in early 2009, subject to regulatory approval. Lastly, on 24 December, Commonwealth announced that it had, in joint
partnership
A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments ...
with
Aussie Home Loans, purchased Wizard Home Loans. As part of the deal, the Commonwealth Bank will acquire Wizard mortgages up to the value of
A$4 billion. The Commonwealth Bank currently owns an 80% stake in
Aussie. Commonwealth Bank held about 30 percent of the loan business of financial advisory company
Storm Financial
Storm Financial Limited was a financial advice company, based in Townsville, Queensland, Australia. The company was founded by Emmanuel Cassimatis and his wife Julie Cassimatis as a private company initially with the name Cassimatis Securities P ...
when it collapsed in January 2009.
In December 2009, Commonwealth sold
Colonial National Bank
The full name of the bank is National Bank of Fiji trading as Colonial National Bank. The bank is as of December 2009 a subsidiary of Bank South Pacific and has the largest branch network in Fiji. It also has a majority holding in one of the tw ...
to
Bank of South Pacific
Bank South Pacific (or BSP) is the largest bank in Papua New Guinea, with 35 branches throughout the country and in 6 countries. BSP currently services over 650,000 business banking customers throughout the Pacific. As at 31 December 2014, BSP had ...
.
The bank transferred their
ATM service desk from
HP Enterprise Services
DXC Technology is an American Multinational corporation, multinational information technology (IT) services and consulting company headquartered in Ashburn, Virginia.
History
DXC Technology was founded on April 3, 2017 when the Hewlett Packar ...
in
Adelaide
Adelaide ( ) is the capital city of South Australia, the state's largest city and the fifth-most populous city in Australia. "Adelaide" may refer to either Greater Adelaide (including the Adelaide Hills) or the Adelaide city centre. The dem ...
to ITS (Armaguard) in
Sydney from March 2012. The bank will change from
NCR and
Diebold
Diebold Nixdorf is an American multinational financial and retail technology company that specializes in the sale, manufacture, installation and service of self-service transaction systems (such as ATMs and currency processing systems), point ...
ATMs to
Wincor Nixdorf
Wincor Nixdorf was a German corporation that provided retail and retail banking hardware, software, and services. Wincor Nixdorf was engaged primarily in the sale, manufacture, installation and service of self-service transaction systems (such a ...
ATMs over the coming years.
The bank is the only financial services organisation to appear in the Dream Employers' top 20 list of preferred employers for 2010 and 2011.
During the
it was discovered that the Commonwealth Bank had charged dead people for financial advice services. On 9 May 2018, Commonwealth Bank settled an interest rate rigging case brought by
ASIC for $25 million. In the settlement, the bank admitted it engaged in "unconscionable conduct" and manipulated the bank bill swap rate five times between February and June 2012.
Controversies
Environmental
Commonwealth Bank is one of the major Australian banks known to be financing and profiting from activities destructive to the Great Barrier Reef, something the bank has been facing increased public scrutiny over since a 2013 report by Market Forces; the ''Sydney Morning Herald'' had this to say:
In 2014, CBA and the big four Australian banks faced increased pressure to end their support for reef-threatening mining projects, as surveys have shown that "the big four banks would be risking customers shifting up to $236 billion in household deposits if they were to finance a project like the Abbot Point expansion".
In late 2014, it "was revealed
BAwas advising Indian coal miner Adani on its proposed development in Queensland's Galilee basin", while by 2015, it has been reported that "all the major American and European banks have refused funds to the project, citing environmental damage".
In May 2015, a report by Market Forces showed that CBA is the single biggest lender to fossil fuel projects within the Great Barrier Reef World Heritage Area during the six-year period from 2008 to 2014. Almost immediately following, protests were held at over fifty CBA branches in Australia and around the world.
Billboards, hoardings and branch signs were revised to read "Coal Bank" and company slogans changed to highlight its investment in fossil fuels.
Later in May, a report by MSCI showed that while other banks are reducing their funding for fossil fuel projects, Australia's largest banks are ramping up this same funding; ''
The Guardian
''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
'' reported:
2008 financial planning scandal
In October 2008, former CBA financial planne
Jeff Morrisalleged to the
Australian Securities and Investments Commission (ASIC) and subsequently a Senate Inquiry, the extent of the misconduct of CBA's financial planning arm, Commonwealth Financial Planning Limited (CFPL), but it was not until 16 months later that ASIC would launch an investigation. "There was forgery and dishonest concealment of material facts," the Senate Inquiry found in its report. They concluded a Royal Commission or Judicial Inquiry as it was deemed ASIC lacked the investigative powers required to uncover the full extent of the allegations. A week following the Senate Inquiry, CEO Ian Narev publicly apologised while announcing a compensation scheme. Former CEO Ralph Norris also conceded that he was aware of problems within CFPL acknowledging the presence of rogue financial planners but rejected the assertion of a conspiracy to cover it up. CBA has been criticised in the Senate for appointing Dr. Brendan French, who was the General Manager of Group Customer Relations before, as the head of the Open Advice Review program. The CBA defended Dr. Brendan French successfully in a defamation lawsuit in 2015; the decision was a single judge decision and was not appealed after the defence was withdrawn. Criticism has also been leveled at the fact that Dr. Brendan French was formerly a member of the board of directors of the
Financial Ombudsman Service
The Financial Ombudsman Service is an ombudsman in the United Kingdom. It was established in 2000, and given statutory powers in 2001 by the Financial Services and Markets Act 2000, to help settle disputes between consumers and UK-based bus ...
and is now working in CBA with respect to customer complaints.
2016 $76m Ponzi scheme
In 2016, it was revealed that some CBA staff were implicated in an alleged $76m
Ponzi scheme fraud. The alleged architects of the scam were professional poker player Bill Jordanou and accountant Robert Zaia.
Insurance division scandal
It was reported alleged systemic issues about the insurance division of CBA. A claimant who suffered a heart attack and nearly died had his claim declined based on an outdated medical definition in his insurance policy. The company admitted this decision was a bad judgement. The insurer also "refused to pay total permanent disability (TPD) and terminal illness claims on the chance that a dying person facing organ failure may have their life saved by a transplant, and that a person can claim their life insurance if they are declared terminally ill by two doctors and deemed likely to die within 12 months." In March 2016, ASIC announced it would be investigating CBA about the allegations. After the serious allegations were aired in an episode of ''
Four Corners'' two parliamentary inquiries were conducted. One into the life insurance sector, and another into protection of whistleblowers. The inquiries found that no staff involved in the wrongdoings were fired. The only person who suffered a consequence was the whistleblower who had tried to do the right thing. There were also calls for a
Royal Commission into the insurance industry. The Financial Services Royal Commission was eventually called and found widespread issues. The Commonwealth Bank was called the gold medallist for ripping off customers by the counsel assisting the royal commissioner.
Money laundering scandal
In August 2017, the financial intelligence agency
Australian Transaction Reports and Analysis Centre (AUSTRAC) launched civil proceedings in the
Federal Court of Australia, alleging that CBA had breached money laundering and terrorism financing laws on 53,700 occasions. The breaches related to the bank's use of intelligent deposit machines (IDMs) between November 2012 and September 2015—the bank claimed that a programming error allowed depositors to instantly credit cash deposits to their accounts, whilst failing to report amounts over $10,000 to AUSTRAC, and not enforcing any limits to the number of transactions.
Bank bill swap rate allegations
ASIC commenced legal proceedings in the Federal Court on 30 January 2018 alleging manipulation of the
bank bill swap rate (BBSW). The BBSW rate is the rate of interest that banks charge to lend money to each other, and is a key interest rate used as the benchmark for interest rates on a number of products, most notably business loans, currency derivatives and floating rate bonds. It is alleged that the manipulations took place on three specific occasions in 2012.
BankWest commercial loan book
The change from
Basel I
Basel I is the first Basel Accord. It arose from deliberations by central bankers from major countries during the late 1970s and 1980s. In 1988, the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, published a set of minimum ...
to
Basel II
Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. It is now extended and partially superseded by Basel III.
The Basel II Accord was publ ...
capitalisation requirements, due to take effect on 1 January 2009, require
BankWestto increase its
Tier 1 capital
Tier 1 capital is the core measure of a bank's financial strength from a regulator's point of view.By definition of Bank for International Settlements. It is composed of ''core capital'', which consists primarily of common stock and disclosed res ...
(share capital) by an additional A$17 billion. BankWest's owner HBOS lent this money to Bankwest, but required the money be repaid to meet HBOS's own capital requirements.
HBOS, therefore, agreed to sell BankWest to Commonwealth Bank (CBA) in October 2008. The sale completed on for A$2.1 billion on 19 December 2008, and required Commonwealth Bank to repay the capital HBOS had loaned Bankwest.
One of the provisions of the sale agreement was an ability for CBA to claim a price adjustment a loan was later found to have been impaired at the time of purchase but had not been identified to Commonwealth Bank by HBOS as impaired during the acquisition.
Commonwealth Bank declared 1,958 out of 26,000 BankWest commercial loans impaired (in default of the loan terms),
with a total face value of $17.9 billion. As they were deemed to be in breach of their loan conditions, the bank was able to charge increased interest rates, or require early repayment.
Commonwealth Bank lost A$2 billion on defaulted loans that were not repaid
(2.1% of the loan book, in comparison to an average of 0.4% across the
Big Four Australian banks).
Of the defaulted loans, the calling-in of 117 resulted in the borrowing company going into receivership.
Borrowers complained that they had complied with the monetary conditions of the loans: they had kept up interest payments and repayments, and disputed whether it was reasonable to apply penalty interest and require early repayment for non-monetary issues (for example, not having invested the funds for the purpose borrowed, or no longer having adequate security to back the loan).
The Australian Parliament requested that the Parliament's
Joint Committee on Corporations and Financial Services conduct an inquiry into the matter, which reported on 4 May 2016.
The committee concluded that there was no evidence to suggest that impairment of loans was related to an attempt to 'claw back' any of the BankWest purchase price.
However, it did find that "in a minority of cases" there was abuse of the asymmetry of power between the bank and the borrower.
The committee recommended that there be improvements in the consistency of lenders' valuation of property used as security for loans.
Dollarmites
Dollarmites is the Commonwealth Bank's school banking program. In a 2020 Report, the Australian Securities and Investments Commission recommended against these programs.
The Victorian Government and later the Queensland Government planned to stop allowing these programs in their state schools. Consumer group
Choice
A choice is the range of different things from which a being can choose. The arrival at a choice may incorporate motivators and models. For example, a traveler might choose a route for a journey based on the preference of arriving at a give ...
continued to lobby for more State governments to also ban the banking program from public schools.
Finally in 2021, after the New South Wales Government banned it too, the Commonwealth Bank announced the end of the program.
Bank structure
Customer Service Network
![Commonwealth Bank branch office](https://upload.wikimedia.org/wikipedia/commons/5/50/Commonwealth_Bank_branch_office.jpg)
This division delivers financial services to personal and small business customers.
Premium Business Services
Premium Business Services was formally split into two departments in 2009, Institutional Banking & Markets (IB&M) and Business & Private Banking (B&PB). IB&M includes areas of the bank that provides services to Institutional Clients and Global Markets. B&PB includes areas of the bank that provides services to Business customers and private banking customers.
Wealth Management
Wealth Management brings together the Groups funds management platform, master funds, superannuation, insurance and financial advice business support.
Colonial First State
Colonial First State (CFS), is an Australian wealth management group that provides investment, superannuation and retirement products to individuals and corporate and superannuation fund investors.
History
The company was established in 1988 ...
, Colonial First State Global Asset Management and CommInsure all form part of Wealth Management. CBA has been granted a
MySuper
MySuper is part of the Stronger Super reforms announced in September 2011 by the Gillard Labor government for the Australian superannuation industry to replace the previous default funds system with a new default system using low cost and simple ...
authority, enabling it to continue to receive default superannuation contribution from 1 January 2014.
Executive leadership
Governors/Chief Executive Officers
The following individuals have been appointed to serve as chief executive of the Commonwealth Bank of Australia, or precursor titles:
Chairs of the Board
International operations
The Commonwealth Bank's international presence includes:
*Retail
banks in New Zealand (
ASB Bank) and Indonesia (99% of PT Bank Commonwealth)
*Banking investments in China (20 per cent in both Qilu Bank and Bank of Hangzhou) and Vietnam, (20 per cent stake in Vietnam International Bank)
*County banks in Hebei and Henen Provinces of China (15 branches and 8 sub-branches)
*Commonwealth Bank branches in
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
,
New York City
New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...
,
Tokyo
Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and List of cities in Japan, largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, ...
,
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delta i ...
,
Shanghai
Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowin ...
,
Beijing
}
Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 21 ...
,
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
,
Auckland
Auckland (pronounced ) ( mi, Tāmaki Makaurau) is a large metropolitan city in the North Island of New Zealand. The most populous urban area in the country and the fifth largest city in Oceania, Auckland has an urban population of about ...
,
Ho Chi Minh City and
Mumbai
Mumbai (, ; also known as Bombay — List of renamed Indian cities and states#Maharashtra, the official name until 1995) is the capital city of the Indian States and union territories of India, state of Maharashtra and the ''de facto'' fin ...
*Joint venture life insurance businesses in Indonesia (PT Commonwealth Life) and China (37.5% stake in BoCommLife)
*First State funds management business in the United Kingdom, Germany, France, Hong Kong, Singapore, Indonesia, Japan, United States and Dubai
*Representative office in
Hanoi
Hanoi or Ha Noi ( or ; vi, Hà Nội ) is the capital and second-largest city of Vietnam. It covers an area of . It consists of 12 urban districts, one district-leveled town and 17 rural districts. Located within the Red River Delta, Hanoi is ...
*A Global Capability Center in
Bangalore
Bangalore (), List of renamed places in India, officially Bengaluru (), is the Capital city, capital and largest city of the Indian state of Karnataka. It has a population of more than and a metropolitan area, metropolitan population of a ...
,
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
Products and services
The Commonwealth Bank is Australia's largest retail bank and offers customers a range of products and services, including loans, credit cards, transaction and savings accounts. It has the largest branch and ATM network. It also offers services to people planning to move to Australia.
NetBank
The Commonwealth Bank offers online banking services throug
NetBank NetBank allows customers to transfer funds, manage accounts, access assets and liabilities and also manage savings and saving goals.
NetBank is also offered with a mobile app available for
iOS
iOS (formerly iPhone OS) is a mobile operating system created and developed by Apple Inc. exclusively for its hardware. It is the operating system that powers many of the company's mobile devices, including the iPhone; the term also include ...
and
Android.
Beem It
Beem It Beem is a surname. Notable people with the surname include:
* David Enoch Beem (1837–1923), lawyer, banker, and American Civil War veteran
* Eva and Abraham Beem (born 1930s), Holocaust victims
* Frances Beem (1881–1971), early 20th century ...
is an instant payment free-to-download mobile application owned by Commonwealth Bank,
NAB and
Westpac
Westpac Banking Corporation, known simply as Westpac, is an Australian multinational banking and financial services company headquartered at Westpac Place in Sydney, New South Wales.
Established in 1817 as the Bank of New South Wales, ...
later sold to Eftpos Australia. It offers an instant payment transfer service between registered users of the app regardless of which bank they are with. The app's main features include options to pay, transfer, request and split money.
Subsidiaries
Australia
*
Bankwest
Bankwest is an Australian full-service bank based in Perth, Western Australia. It was sold in October 2008 to the Commonwealth Bank of Australia for 2.1 billion and operates as a division of its parent company.
Bankwest previously had branch ...
*
Colonial First State
Colonial First State (CFS), is an Australian wealth management group that provides investment, superannuation and retirement products to individuals and corporate and superannuation fund investors.
History
The company was established in 1988 ...
*CommInsure
*
Commonwealth Securities
CommSec is Australia's largest online brokerage firm, stockbroking firm. It is a subsidiary of the Commonwealth Bank.
Though its Internet trading platform constitutes the vast majority of its business, it also offers a telephone based brokerage ...
Asia Pacific
*PT Bank Commonwealth (Indonesia)
New Zealand
*
ASB
See also
*
Australian Cricket Academy
The Australian Cricket Academy was founded in 1987 as a joint initiative of the Australian Institute of Sport (AIS) and the Australian Cricket Board (ACB). It was initially located at Henley Beach in Adelaide before moving to the Allan Border F ...
*
Banking in Australia
Banking in Australia is dominated by four major banks: Commonwealth Bank, Westpac, Australia & New Zealand Banking Group and National Australia Bank. There are several smaller banks with a presence throughout the country, and a large number of ...
*
Commonwealth Bank Series
The Australian Tri-Series was an annual one day international (ODI) cricket tournament held in Australia, and contested by Australia and two touring teams.
The series was the primary format for international one-day cricket throughout most of ...
*
Commonwealth Bank Trophy
The Commonwealth Bank Trophy, also referred to as the National Netball League, was the top level national Australian netball league between 1997 and 2007. The league was organized by Netball Australia. Its main sponsor was the Commonwealth Ba ...
*
List of banks in Australia
The following is the list of banks in Australia, as well as restricted ADIs, credit unions, friendly societies and subsidiaries and branches of foreign banks in Australia. Financial institutions in Australia are supervised by the Australian Pr ...
*
List of banks in Oceania
This is a list of banks in Oceania
Australia
Central bank
*Reserve Bank of Australia
Major banks
*ANZ Bank
*Citibank Australia
*Commonwealth Bank
*HSBC Bank Australia
*National Australia Bank
*Suncorp
*Westpac
Local banks
*BankSA
* Bank of Me ...
*
List of companies of Australia
This is a list of notable companies based in Australia, a country in Oceania. For further information on the types of business entities in this country and their abbreviations, see " Business entities in Australia".
Australia is a wealthy country ...
*
Reserve Bank of Australia
The Reserve Bank of Australia (RBA) is Australia's central bank and banknote issuing authority. It has had this role since 14 January 1960, when the ''Reserve Bank Act 1959'' removed the central banking functions from the Commonwealth Bank.
Th ...
*
State Bank of New South Wales
*
State Bank of Victoria
The State Bank of Victoria was an Australian bank that existed from 1842 until 1990 when it was taken over by the Commonwealth Bank. It was owned by the State of Victoria.
History
A government-controlled savings bank had been founded on 1 Janua ...
References
Further reading
*
External links
*
*
*
*
*
*
{{Authority control
1991 initial public offerings
Australian companies established in 1911
Banks established in 1911
Banks of Australia
Companies listed on the Australian Securities Exchange
Financial services companies based in Sydney
Former Commonwealth Government-owned companies of Australia
Multinational banks