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We’ve seen the odd apology from bank CEOs and other senior executives over the years for “misconduct” of a bank under their watch. But what has changed after that?

Nothing, nothing at all. Saying sorry, apologising, is part of the ritual. And that only after the institution has been found out, the misdeeds exposed and the senior execs are on the back foot.

It’s all crocodile tears.

This activity has been going on now for decades. And so has the malpractice. The most recent sorry statement is presented as if it is something new and of substantial ethical significance. A breakthrough in reforming the errant institutionalised culture? On the contrary. It’s a pantomime.

The sorry soft shoe routine

In 2003, the NAB experienced a scam perpetrated by its “hot shot” currency traders, ultimately costing the bank over $300 million. APRA was forced out of its habituated slumber and issued a report in March 2004 that charted the deep dysfunctionality of NAB culture that facilitated such an event.

In response, the NAB, under its new CEO John Stewart, issued in August 2004 an elaborate Statement of Corporate Principles. There we read, inter alia:

‘We take ownership and hold ourselves accountable (for all our actions)

We acknowledge our mistakes and if we get it wrong we will put it right

We all take responsibility for the way that customers experience the organisation’

Nothing changed.

In a Today Tonight program, shown first in Adelaide on 5 April 2006, that gave exposure to three NAB victims, senior executive Ahmed Fahour is shown as claiming that the NAB:

‘… lost touch with its customers; lost touch with what matters; lost touch with the key things that drive the business — that’s the customers and looking after its staff. It became an. arrogantorganisation, developed a culture that was inwardly focused rather than outwardly focused.’

In his shortish period at the NAB, Fahour did nothing to fix that bank’s dysfunctional and corrupt culture. Fahour was an integral part of the problem.

In June 2009, during a Parliamentary inquiry into the Storm Financial debacle, then CBA CEO Ralph Norris issued a press release, claiming ('Joint Committee on Corporations and Financial Services Report', p.45.)

The Bank acknowledges that the position in which some Storm Financial clients find themselves, while not caused directly by the Bank, involves the Bank to some degree… In some cases we have identified shortcomings in how we lent money to our customers involved with Storm Financial… We are not proud of our involvement in some of these issues and we are working toward a fair and equitable outcome for our affected customers.

No “fair and equitable” outcome for affected customers took place.

In 2014, the ANZ bank foreclosed on Charlie Phillott's Queensland farm after an unconscionable drought-inspired property valuation rejig — even though Phillott was not in default. Following Phillott’s protest, then ANZ CEO Mike Smith “apologised” in 2015, handing back the title deeds to Phillott.

At the same time, the ANZ was unconscionably screwing Landmark farming borrowers who it acquired when it took over Landmark in 2009 by imposing harsher terms —

In July 2014, following the issue of the Senate Economics Committee ASIC Inquiry (which concentrated on ASIC’s neglect of the financial planning scandal), we read that:

‘Commonwealth Bank chief executive Ian Narev has apologised unreservedly to customers who lost money in the bank's multi-million-dollar financial planning scandal.’

Said Narev in a statement:

Poor advice provided by some of our advisers between 2003 and 2012 caused financial loss and distress and I am truly sorry for that. We're here today because we ultimately, having listened to the sentiment, looked at our vision to secure and enhance the financial wellbeing of people, businesses and customers and asked ourselves: 'What is the right thing to do?’ It may be that we have done that later than we might have, but it's never too late to do the right thing.

“Some of our advisers”? No. It was directed and condoned right from the top.

In May 2016, following further disclosures (not least regarding CommInsure) from a 28 April hearing during the Scrutiny of Financial Advice Inquiry, Narev apologises again, for comparable sins ongoing.

This followed an apology in March 2016 from CommInsure Board Chairman Geoff Austin regarding the insurer’s brutal treatment of customers.

In September 2018, the NAB apologised for delays in compensation for its scams against its superannuation clients.

NAB Super Head Andrew Hagger admitted:

"[I] take accountability for what has occurred on my watch, and accept that alongside successes were failures, including instances where we did not act with the pace required. I leave NAB with confidence that we are creating a better bank."

Finally, here is NAB CEO Andrew Thorburn, 28 September, following the publication of the Financial Servies Royal Commission 'Interim Report':

For us at NAB, where we have made mistakes or done the wrong thing, we will own them and fix them. It is difficult to face the statement of ‘profits before people’, but this is exactly what we need to confront. Banking was built on putting people first and earning the trust of customers. We must return to these principles once again, rather than continuing to be short term managers.

As for a long line of NAB dissemblers, this is complete bollocks. Thorburn and his partner in crime, board chairman Ken Henry, show every indication of continuing NAB’s corrupt tradition and continuing to ignore the horde of past and present victim complaints.

One could go on, but it would be more of the same.

Calling the farce

Alan Kirkland, CEO of consumer organisation Choice, outlined the phenomenon and its character in an article in February 2018.

Kirkland noted:

When then Commonwealth Bank CEO Ian Narev made his much-publicised apology to the bank's financial advice clients in 2014, he used the very same speech to argue that financial advice laws needed to be watered down.

If there's one lesson from these experiences it's that we've got to be radically more sceptical when industry asks us to trust it to act. Where the best way to protect consumers is by dismantling the business model that causes them harm, firms have no incentive to act.

When things go wrong, we need less trust, faster action.

Here’s Adele Ferguson commenting on the banks’ appearance during the Royal Commission’s hearings on banks’ insurance arms (14 September):

"Sitting here now, looking at the way it was positioned, I can see how ASIC’s concerns were legitimate,” [Comminsure boss Helen] Troup said.

It seems appearing contrite on the day of reckoning is the latest technique being employed by executives, hoping to duck the blade. …

Sorry, not so sorry — or maybe not sorry at all.

In short, bank senior executives are not sorry at all. Why should they be, as apologies cost nothing? They purposely divert. They are in essence an obscenity and an outrage.

Narev deservedly lost his job, but not his emoluments. He was a sacrificial lamb for CBA corporate crimes in general. All other senior executives responsible for corporate crimes under their “watch” have not been touched.

The swamp needs to be drained.

Behind the crocodile tears, what?

In May 2016, former Labor Senator Mark Bishop penned an article for Fairfax.

After long experience on Senate Committee inquiries, Bishop noted:

Bitter experience told me that industry was incapable of putting its own house in order. There was still way too much denial. There was no willingness to accept responsibility. I knew that cabinet ministers were reluctant to enforce reform. It was likely that the then government had given assurances to the banks. A solution would not come from within the industry.

The sector was beset with “way too much denial” and “no willingness to accept responsibility”.

Hence Labor’s call for a Royal Commission.

The Joint Committee Inquiry into the Impairment of Customer Loans reported in that month, May 2016. That inquiry was the second into the CBA’s default of hundreds of Bankwest customers after it acquired Bankwest in December 2008.

The report notes (p.xvi):

The Commonwealth Bank… have (sic) consistently denied that there have been issues with their conduct and the way in which they have engaged with their customers. The evidence of witnesses and submitters to this inquiry has strongly called into question the Commonwealth Bank's denial of unreasonable or unethical conduct.

This is a whopper of a denial — the grand lie. The lie was reproduced in Commissioner Hayne’s Interim Report (Vol.1, Ch.5), to the horror of the Bankwest victims who have been pushing for a royal commission for years and for a forensic investigation of their parlous experiences.

This is the litmus test of the CBA’s mentality. If it continues to claim that Bankwest’s loan portfolio was stuffed with rotten loans which necessitated an inevitable cleanout (Hayne called CBA’s actions “prudent”), then one can’t trust the post-Commission CBA with anything.

In February 2017, Phil Khoury delivered a report on the Code of Banking Practice, an investigation instigated by the banks themselves. Regardless, the banks rejected Khoury’s recommendation that unsolicited pushing of credit card limit upgrades had to stop and also his recommendation that banks should focus on debtor’s ability to repay the entire debt rather than merely financing the interest on that debt.

Thus the banks signalled that the most straitened segments of the population would continue to be a vehicle for predation and an ongoing source of exploitation. The consumer law organisations – underfunded – experience the human cost of this predation, but their voice struggles to be heard.

Following the Royal Commission’s (cursory) hearings on the small business sector, the banks denied guilt.

This from Fairfax in June 2018:

Westpac, National Australia Bank and Commonwealth Bank have denied breaking the law through various dealings with small business customers that were explored in last month's royal commission hearings.

However, the banks have admitted some of the behaviour put before the commission's hearings on small business last month was unfair, and that there were breaches of the industry code of conduct.

This audacious word mincing has been facilitated by the original Royal Commission Terms of Reference (which some victims claim was written by ANZ Board Chair David Gonski and the ABA’s CEO Anna Bligh). The tepid operative word “misconduct” facilitates all but the most grievous sins to be included in the “rap over the knuckles” category.

All of the banks’ treatment of their small business and family farmer customers is steeped in criminality — period. Some of the behaviour was “unfair”? Puleez. And of course, the Code of Banking Practice, in all of its many manifestations, is a charade meant to be ignored.

The insurance companies and bank insurance arms also hit back recently, in October 2018:

In its submission, the Commonwealth Bank's CommInsure has denied breaching laws governing insurance companies, saying admissions by its executive Helen Troup that the insurance group did not act in the utmost good faith with ill customers making claims against their policy might be true in fact, but not in law. …

AMP dug in its heels over the legality of its alleged decision to charge insurance premiums to dead people, arguing that it only charged them for the short time it took for its processes to recognise the notification of the death and had refunded premiums in the majority of cases.

Ah, the law’s the thing. We have the law on our side – or rather the complicit legal system – and what we do with the law on side, no matter how heinous, is frankly none of your business.

Other insurers chimed in with comparable denials, claiming that their treatment at Commission hearings cast them in the “worst possible light”. These included Youi, Suncorp, Allianz and IAG.

Thus:

‘Insurance Australia Group rejected counsel assisting's findings that it engaged in misconduct when it sold junk car insurance through its Swann brand but conceded such action was conduct falling below community standards.’

“Misconduct” is seen as a draconian appellation? God help us.

What does it mean?

A simple label for the overall demeanour of the banking sector, continuing through the Royal Commission hearings, is “unrepentant”.

This does not bode well for what happens once the Royal Commission disappears into history. The Coalition itself is also unrepentant — deeply complicit. The Labor Party, though making lots of good noises, has yet to display the requisite backbone.

Nobody is talking about adequate compensation — for good reason as the appropriate sums are enormous.

Nobody is talking about the deep asymmetric structures behind bank/customer relations that provide the incentive and capacity for malpractice and criminality.

Nobody, save the victims, is talking about the deep corruption of the sectors that mediate between bank power and customer victimisation — the law firms, the valuers, the receivers and so on.

Nobody is talking about the educated prejudice and/or the complicity of the judiciary (apart from my submission to the Royal Commission). Banking system integrity and justice for victims will never be achieved unless the integral contribution of the legal system and the judiciary to bank criminality is addressed head-on.

Add another dimension to the character of banking culture — one never acknowledged but which is compatible with regular bank practices. That dimension is sadism. Bank senior executives, lending staff and “asset restructuring” staff torture customers, destroy their livelihood, destroy their humanity, even pursue family members — because they can. The typical “critical” evaluation has it that it’s all about greed and maximum profit. It isn’t. Indeed, profit might take backstage. It’s about power and its abuse.

The banking sector is full of sociopaths and psychopaths.

Women – whether single or married with their partner sometimes teaming with the bank in the abuse – are favoured subjects of the abuse.

The banking mafia has received very bad press leading up to and during the Royal Commission hearings. Coupled with its denial of its crimes, as above, I have no doubt that they have acquired resentment at their “undeserved” treatment.

I would infer that this mafia is looking forward to the time, post Commission, when they can get their own back on the classes of customers (all of them) that have exposed their bastardry to light and to condemnation. The power structures remain in place for the renewed exercise of that bastardry.

Some victims and some commentators are optimistic. For them, the Royal Commission is a watershed. I remain a pessimist.

A new arena, however, is opening up.

The victims, now more assertive and better organised, are furious regarding the limited exposure allowed to their sectors in the Commission hearings (wide-ranging, limited time). They are peppering multiple members of parliament and senators with details of their experience.

They are getting a more sympathetic hearing than before — when parliamentarians either ignored them or advised them to go to the Financial Ombudsman Service, which victims experience as complicit with the banks. Labor has responded by organising forums in selective locations around the country to gather victim stories with greater efficiency.

The party machines are going to have to accommodate this groundswell and Parliament itself will be forced to rise from its indifference regarding what is a nation-wide crime scene with an uncounted number of victims.

The Royal Commission is definitely a watershed in this sense. The victims are no longer going to lie down, suffer and die in obscurity.

To my mind, the real watershed will come when criminal acts are met with criminal charges. Send senior bank executives to gaol. Watch the crocodile tears become the real thing.

Dr Evan Jones is a retired political economist.

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