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10,000 CBA customers answer CEO letter

Stuart Condie
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COMMONWEALTH BANK AGM

CBA CEO Matt Comyn and chair Catherine Livingstone say the bank is listening to customer complaints

More than 10,000 Commonwealth Bank customers have responded to chief executive Matt Comyn's request for feedback on how the bank does business.

Mr Comyn had written to the bank's eight million customers after Australia's largest lender had been embroiled in a series of scandals including the money-laundering law breaches that led to a $700 million fine and the departure of his predecessor.

The bank, which like its peers has been accused at the financial services royal commission for prioritising profits over customer wellbeing, is now looking at how to address the sometimes critical responses.

"I have received more than 10,000 responses: a mixture of complaints, compliments, and general suggestions from our customers on how we can become a better bank," Mr Comyn told Wednesday's annual general meeting in Brisbane.

"My leadership team and I are personally engaging in long-standing disputes to review these with fresh eyes."

Mr Comyn said deputy chief executive David Cohen will take direct responsibility for managing complaints.

He announced that Patricia Faulkner - the deputy commissioner at the 2015 royal commission on family violence - will chair an external advisory panel helping executives engage with customers, employees and the community.

The bank could also generate shareholder goodwill with a buyback, according to UBS analysts.

In a first-quarter trading update, CBA said its common equity tier 1 ratio would be at about 11.2 per cent once recent asset sales are accounted for.

That exceeds the 10.5 per cent regulatory target set for 2020, which UBS said could prompt the return of up to $5 billion to shareholders in the 2020 financial year.

Chair Catherine Livingstone told the AGM that CBA, whose first-quarter unaudited cash profit fell 5.7 per cent to $2.5 billion, acknowledged the royal commission's criticism that customers had suffered from the bank's focus on profitability.

"When people or processes failed, there were neither the systems nor processes in place to identify and fix the problems, nor a sufficient sense of urgency to identify the root cause, and take steps to prevent similar issues arising again," Ms Livingstone said.

Commonwealth Bank in August posted a 4.8 per cent drop in full-year profit to $9.23 billion, hit by a total of more than $1 billion in anti-money laundering fines, customer remediation and royal commission costs.

Cash earnings for the three months to September 30 have now fallen from $2.65 billion a year ago as higher funding costs and competition for borrowers putting pressure on margins.

Home lending grew 3.1 per cent on an annualised basis, below system growth of 3.6 per cent.

Impaired assets rose to $6.6 billion from $6.1 billion the same time a year ago, with personal loan, credit card and mortgage arrears all ticking up.

Home loans 90 days or more overdue rose from 0.59 per cent a year ago to 0.67 per cent, although that was down from 0.70 per cent at the end of the last quarter.