Commonwealth Bank has claimed it will "confidently defend" itself against allegations it benefited from engineering Bankwest loan defaults.
CBA has been plagued by allegations it unfairly forclosed on some of Bankwest’s commercial customers since it bought Bankwest from HBOS at just 0.8 times its 2007 book value, and the bank faces possible class action next year.
CBA’s group general counsel David Cohen told The Australian CBA will “confidently defend its position” should class action occur.
Reports claimed that CBA benefited from windfall claims through foreclosing on Bankwest’s commercial customers and then invoking the adjustment provisions against HBOS.
While this resulted in a $26m increase in the Bankwest purchase price, CBA claimed warranty claims resulted in a payment to CBA of “less than $6 million”.
“No price adjustment for impaired loans could be made through the warranty regime, and none was made,” Cohen said.
“There was only a minor level of warranty claims, for matters unrelated to impaired loans, of less than $6 million.”
The price adjustment mechanism could only be invoked up until December 18, 2008 – the last day of HBOS’s ownership of Bankwest – said Cohen.
“So CBA’s subsequent ownership had no influence on the level of impaired loans that could result in a price adjustment for Bankwest.”