There was no process by Commonwealth Bank of deliberately defaulting loans against Bankwest business customers, the royal commission into misconduct in banking heard on Friday. Michael Hodge, counsel assisting, in effect exonerated CBA from any findings of mischief of a cynical nature, as championed by more than 60 Bankwest business borrowers in submissions to the royal commission. This amounts to a second blow evaded by CBA at this recent round of hearings by the royal commission into business lending. The commission had already, at the start of hearings, scorned all claims of "ulterior motives" including the populist "clawback theory" in connection with the CBA takeover of Bankwest. In the clearest nod yet to the conservative leanings of Kenneth Hayne's inquiry, Commonwealth Bank was judged to have taken actions, "necessary so as to address the risks that CBA and Bankwest had identified in the Bankwest business loan book following the acquisition" at the end of 2008. In his closing address for Hayne on Friday, Hodge skipped through the elements of the argument that allowed CBA to dodge claims of misconduct. "First, there were indications of serious problems with the quality of the business loan book," Hodge told the commissioner. He said that the evidence of David Cohen, now CBA's chief risk officer, "was that the quality of the Bankwest business loan book was not as good as CBA had expected it to be. By March 2009 there had been a notable increase in the concentration of troublesome assets, and from July 2009 to February 2010 there had been a significant transfer of assets into asset management with a value of $1.4 billion. "Further, during 2009 the provisions that were being made for the Bankwest business loan book had been increasing" while there were "indications of significant problems with the diversity of the loan book. "That is, Bankwest had a high exposure to commercial property during the period of and immediately after the GFC." Hodge said "there were indications of problems with business functions, including loan management by Bankwest. "Mr Cohen's evidence was that it became apparent that some of the relationship managers at Bankwest were not actively monitoring the progress of a loan through its life cycle as they ought to have been, and he said that there were concerns about the operation of the business itself when it was assessing credit. "The evidence was that there was an underlying question as to whether the Bankwest business loan portfolio was being credit rated in accordance with the equivalent CBA standard, including concerns about the risk ratings that were given to particular loans. "There are also concerns about adequate collective provisioning of the Bankwest business loan book." Hodge told Hayne it will be open to you to conclude that 'Project Magellan' was necessary, so as to address the risks that CBA and Bankwest had identified in the Bankwest business loan book following the acquisition. "Looking at it in hindsight, CBA had valid concerns about Bankwest's approach to credit writing and account management."It