Comyn is in for a rough ride

NEW Commonwealth Bank CEO Matt Comyn has struck exactly the right note with his combination of the “we done wrong” apology and a robust statement of how the CBA got much more right for customers.

What was particularly effective was his stress on the way the “wrongdoers/wrongdoing” let down all the others – again, the overwhelming majority of – CBA staff, as well as customers. The “bad stuff” was all just as much an exercise in bad banking as bad behaviour.

Unfortunately, good and important and even potentially effective as the message was, it was also the easiest thing Comyn is ever going to have to do as CEO.

Yesterday he was finally on top of the mountain he’s been climbing relentlessly for more than 20 years, and from such a peak there’s only one way to go.

But staying there effectively and successfully is going to be tough. This is not a great time to become CEO of a major bank, even a lilywhite spotless bank (is there such a beast?).

Putting aside the “regulatory issues”, these are extremely challenging operational and strategic times for banks and especially our Big Four.

The Big Four have been riding one big wave: very “easy” (easy to do and with very low default rates) residential property lending. It’s enabled them not to have to rely on the much more problematic lending to business that most of the other banks in most of the rest of the world have to do to try to make money.

They’ve also been riding a smaller wave: the explosion in the wealth and investment management business courtesy of the $2 trillion-plus superannuation pot which was Treasurer Paul Keating’s great “gift to the nation”.

Both of those waves are now receding, very fast for the banks in the case of the latter. And they are doing so just as the digital disruption – which up until now has been great for bank profits, and especially for the CBA – is building into a bank profit-wreaking tsunami.

Then add on those “regulatory issues”: for all banks, a trio of regulators (Austrac, APRA. ACCC) getting suddenly all hairy-chested plus a once-in-a-three-quarter-century Royal Commission, that has most definitely not been set in motion to do the banks a favour. This means that for starters Comyn has to structure a similar “twolevel” intersection with the regulators and the RC: ’fessing up to wrongdoing but also robustly arguing the CBA” ‘we done right” story.

Austrac and those 50,000plus (and indeed, plus again) breaches is both the first big cab off the Comyn-CBA rank and an exact profile of the challenge.

As I’ve written from the start CBA is done for all money on these breaches. It should cost it, in my judgment, around $500 million. But it’s also fixed the problem; absent a system meltdown these breaches won’t happen again.

It’s the other Austrac stuff that needs to be the focus, both for CEO Comyn and the regulators. He needs to be open and tough: confessing and fighting as both the facts and the CBA best-interest require.

Then there are the now two class actions. They are not life-threatening but will have to be dealt with. Again, the best mix is concession and robust rejection.

Sorry Matt, but the odds are that Monday was the best day in the rest of your working life.