Australia's largest bank is having to pay exceptional compliance costs because of its part in the series of scandals unturned by the Banking Royal Commission that have rocked the country's financial sector.

In a recent press release it has pledged: "A provision of $100 million will be recognised to cover the higher-than-expected total cost of the multi-year financial crime compliance Program of Action and other ongoing compliance and remediation programs. This is in addition to provisions taken for the Program of Action in the year ended 30 June 2018, and previously announced remediation provisions for Credit Card Plus, Personal Loan Protection and Home Loan Protection insurance."

The A$100 million is a newly announced part of "charges of A$300 million (US$216 million) that would be reflected in its first-half results ending in December," according to Reuters.

Pending the demerger of CBA’s wealth management and mortgage broking businesses (NewCo), A$200 million will be held as an indemnity provision for historical NewCo-related remediation issues [i.e. compensation and extra comliance to preclude recurrences] and associated programme costs. This is in addition to the A$270 million in compensation (including interest) already paid by CBA to customers who were provided with advice of poor quality or charged fees in return for no service.

The bank’s financial advisors charged dead clients for financial advice. One advisor was fully aware that a customer had died in 2004 but kept the charges to his estate going for 10 years. The bank charged "fees for no service" many times. When Marianne Perkovic, the head of the private bank that is being spun off, had to answer questions she was admonished for being persistently evasive.

The bank's share price is falling. In August it announced that its full-year net profit had fallen by 4% to A$9.38 billion, due partly to a civil penalty of A$700 million it had to pay to AUSTRAC, the Australian Transaction Reports and Analysis Centre, for bad money-laundering controls.

In October, according to the Australian Stock Exchange, Commonwealth Bank tried to make things better for wealth management customers with the rebating of grandfathered commissions for Commonwealth Financial Planning customers and a review and remediation programme for any instances where unauthorised advice fees have been charged to deceased estates. It promised to:

• review any advice fees charged to deceased estates across all its advice licensees and refund with interest any instances where unauthorised fees had been charged;
• take steps to remove certain fees on legacy wealth products from January 2019, saving customers about A25 million per annum;
• rebate all grandfathered commissions to CFP customers from January 2019 on, benefiting around 50,000 customer accounts by approximately $20 million annually;
• provide all CFP customers with an option to renew their ongoing service arrangements every two years.

Michael Venter, the CBA Wealth Management chief operating officer, said: “The changes announced today continue the process of reform underway in our wealth management businesses and form part of our response to specific issues identified this year through the Royal Commission. Charging unauthorised advice fees to deceased estates is unacceptable."