08:22

The Commonwealth Bank has secured a significant victory at the banking royal commission, with the commission dismissing claims it deliberately defaulted loans of Bankwest customers after it bought the smaller bank in 2008.

CBA has been dogged by claims – for years – that it was motivated to impair the loans of some Bankwest SME customers in 2009 and 2010 after it acquired the smaller bank from HBOS in late 2008.

Former Bankwest customers have claimed that CBA unnecessarily defaulted their loans for its own financial gain, and their claims eventually led to a parliamentary inquiry in 2015 (thought the inquiry failed to produce a unanimous view on the events).



Senior counsel assisting the royal commission, Michael Hodge, told the commission he had investigated the “clawback ulterior motive theory” – pertaining to the claim that CBA deliberately impaired some Bankwest loans so it could “clawback” the amount of the impairment from HBOS under the price adjustment mechanism in the sale contract between CBA and HBOS – but he found no evidence for the theory.

“This ulterior motive theory is not supported by either the facts or the operation of the contractual mechanism,” Hodge said.

CBA executives will welcome the news with open arms – for obvious reasons.