CBA prepares Bankwest class action defence

by 02 Dec 2013

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.”


  • by mac 2/12/2013 10:13:25 AM

    The development industry knows exactly what happened and it is worthy of a royal commission. I hope they have to pay but I fear the bank will tie them up for many years. I also hope the people behind the decisions get what they deserve which is at least career death.

  • by dpathle 2/12/2013 10:13:04 PM

    The poor Senators will have a snowflakes chance in hell of making this one stick. Barristers for CBA with more letters after their names than they have in them; with more experience in banking than the combined brains trust of the whole upper house...... they have forgotten more than Doug Cameron knows about banking. Give up now boys, you can't take on the biggest bully in the playground, you will only end up with your undies over your head. "How much do you want, to make this go away?" "$50mil sounds fair - now how do we make this back for the shareholders?" "Let's write off a heap of bad and doubtful debts and claim the insurance ...... oh um, but hang on didn't we just pay $50mil in fines for doing that?" Pay the fines or blame someone else and the guilt don't stick. CBA will blame Bankwest, Bankwest will blame the GFC and so around and around it goes.

  • by Diane Lock 7/07/2014 12:25:35 PM

    I think in light of what has come out about the dodgy practices of the CBA senate inquiry recently, they should look back to the senate inquiry of 2012 Bankwest/CBA where looking at the videos ASIC shrugging, non committal, dreadful stories, corruption and fraudulent behaviour most shocking, how can senators, CBA ASIC ignore the obvious