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The Australian Securities and Investments Commission (ASIC) has been investigating Commonwealth Bank of Australia (ASX:CBA) for mis-selling of consumer credit insurance for quite some time now. Recently, the Royal Commission questioned ASIC regarding its methods of investigation related to the misconduct of banks.
The Australian Securities and Investments Commissionâs (ASIC) Chairman Mr. James Shipton told the Royal Commission that they should have launched an investigation into CBA's selling of the often-worthless insurance products and it was a mistake not to do so.
It is not the first time that CBA is in the limelight for misconduct. In the month of October, Mr. Matt Comyn did disclose about the thousands of Dollarmite accounts which were wrongly created by the staff members of CBA to earn bonuses. In the recently held Annual General Meeting, the chairman of CBA has acknowledged the Royal Commissionâs criticism which was highlighted in their interim report.
The CEO of CBA Mr. Matt Comyn recently revealed that he had informed the Former CEO about the CBA's mis-selling of consumer credit insurance products. As per Mr. Mattâs statement at Royal Commission, he warned former CEO Ian Narev and former chairman David Turner about CBA selling credit card insurance to ineligible customers such as unemployed people. Under the light of this confession, it is expected that ASIC may take action against CBA.
Recently at Royal Commission ASICâs James Shipton was accused by the Royal Commission of being lenient towards NAB, when it was revealed through companyâs emails that ASIC considered penalizing NAB through community benefit payment over home-loan misconduct. Mr. James agreed that they should have launched an investigation on NBAâs introducer program misconduct years ago. Mr. James Shipment told the Royal Commission that initially when CBAâ insurance mis- selling was spotted by ASIC, they were more focusing on the remediation program and less interested in pursuing CBA for legal breach.
When Royal Commission asked Mr. Shipton to explain why they did not conduct an investigation, Mr. Shipton replied by saying that as it was an Industry-wide issue and many banks were involved, an investigation would have a large amount on ASIC Resources. Further, CBAâs CEO has also hinted that the bank may have to compensate thousands of additional customers who purchased the CBAâs credit card insurance products.
In the September quarter of 2018, CBA earned a statutory net profit of around $2.45 billion. At the end of the September quarter, the Liquidity Coverage Ratio (LCR) was at 133 percent which is 131 percent higher than the June quarter. Further, the Net Stable Funding Ratio (NSFR) was at 113 percent which was 122 percent higher than the June 2018 quarter.
In the last six months, the share price of CBA increased by 0.54 percent as on 22 November 2018. CBAâs shares traded at $71.300 with a market capitalization of circa $125.03 bn as on 23 November 2018 (AEST 4:00 PM).
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