CBA denies claims by Bankwest customers
Commonwealth Bank has denied claims put in submissions to a Senate committee that it called in Bankwest loans to force the bank's previous owner to cover the losses.A public hearing of the Senate Standing Committee on Economics, which is inquiring into the post-GFC banking sector, was held in Sydney yesterday.Many of the 150 submissions received by the committee are complaints about CBA, which bought Bankwest from HBOS in 2008, in the depths of the financial crisis.The guts of the complaints are that CBA and Bankwest hastened to appoint receivers to businesses in technical default, refused to allow troubled borrowers to trade out of their difficulties and worked to inflate lending losses once receivers were appointed.Supposedly, the reason they did these things was to maximise they claims they could make against the vendor, HBOS.According to a report in the Australian Financial Review, CBA general counsel David Cohen told the committee yesterday: "Let me say categorically that suggestion is untrue."Cohen acknowledged that the sale agreement allowed the price paid for Bankwest to increase or decrease depending on the number of distressed loans. However, this agreement applied to loan deemed problematic at the time of the acquisition and not subsequently.The AFR quoted Cohen saying: "Any loans that became distressed after the purchase date became a liability for Bankwest, and CBA had no right to recoup related losses."Former Bankwest customers will give evidence today.