A Statement From BOQ Chairman, Neil Summerson
I would like to take this opportunity to set the record straight regarding tonight’s 60 Minutes story regarding BOQ and Storm Financial.
First and foremost, let me make one thing clear - we genuinely feel for those who were affected by the collapse of Storm Financial and have been working directly with many impacted customers, one on one.
Regarding tonight's story, BOQ has been in discussions with 60 Minutes regarding their story for some time and, based on these discussions it became evident that the story would focus largely on the Bank’s dealings with Storm Financial.
We have been made aware that a law firm acting for Storm clients against the Bank in two current legal actions has allegedly been communicating with representatives of 60 Minutes and contacting Storm customers with a view to putting them forward in the program’s story.
That law firm has pursued an aggressive media strategy against the Bank for the past 12 months with commentary in various media forms for its own purposes, in an endeavour to exert pressure on the Bank.
We do not believe it is appropriate to be involved in a story that is potentially being contributed to by a legal firm acting for clients in current litigation with the Bank.
In addition, we do not believe that it would be considered appropriate by either our regulators, or the courts overseeing the current litigation, for the Bank to be providing public comment regarding these issues, until these proceedings are completed, and so we felt we had no choice but to decline 60 Minutes’ request for interviews at this time.
As David Liddy outlined in a letter to the 60 Minutes Executive Producer, our hands are effectively tied on any issue that touches or may be relevant to current legal actions and regulatory investigations.
However, 60 Minutes decided to push ahead with the story regardless of the constraints the Bank is bound by.
Then they went further; they attacked the integrity of our people and of our CEO, David Liddy.
The fact that a journalist, whose response to our polite and well-reasoned decline to a pre-recorded interview request was to hide out and ambush David Liddy, and our people, at their homes and offices in a most aggressive manner, and who drew information from a law firm currently taking action against the Bank to pull together her story, would attack the integrity of a highly regarded and widely respected CEO and Managing Director with more than 40 years’ banking experience is not without irony.
David Liddy is one of the most ethical and straight-talking business leaders in our country today. His commitment to our Bank, our customers, our employees and our shareholders is without question.
As Chairman of this Bank, and on behalf of Managing Director David Liddy, and our BOQ Owner-Managers and employees, I simply won’t stand for this kind of attack. The public deserves more than this level of one-sided tabloid journalism.
In fact, BOQ did provide as much information to 60 Minutes as we were able, given the constraints outlined above but they chose not to provide both sides of this story.
So here are the facts:
The story questioned the way we calculate how much people can borrow. Without getting in to the complex detail of how various loan serviceability figures are arrived at, let me make one thing clear. We would never settle a loan unless the customer had signed the loan contract. And we would never settle a loan that we thought a customer couldn’t service. It simply isn’t good business sense.
The story implied that our North Ward branch was "loan central" for Storm Financial customers. This is hardly the case, given we understand BOQ wrote only a very small proportion of home equity loans for Storm Financial customers (and zero margin loans).
The story made claims around the fact that we have not lived up to our promises to our customers. I couldn’t disagree more. Not only do we live up to the promises to our customers, we usually exceed them. We deal with our customers in the manner that suits them – if this means through Internet Banking, phone banking, mobile phone banking or through the branches, we’re happy to deal with customers however it suits them, not us. And if a customer instructs us, in writing, to deal directly with their authorised and licensed financial planner, or with their accountant, we will honour their wishes. It’s about convenience for customers. Nothing more sinister than that.
The story implied that we dealt on the margins of truth. That we covered up information that didn’t reflect well on us, and raised concerns about our processes.
This is an easy allegation for the program to make, as they know Mr Liddy is severely constrained as to what he can say in reply due to current legal restrictions. It is always easy to make a point when someone else has the veil of silence put over them.
What I will say is our banking processes and operations are of a similar nature to most of the banks in this country. While we are not perfect, and we are not always going to get everything right 100% of the time, like most organizations we focus on constant improvement and make changes where needed.
In tonight’s program, it was suggested that the Bank bent and broke its own rules and loaned money to people who would not have qualified for a loan. This allegation is untrue. At all times, the Bank had in place appropriate policies for assessing customers’ incomes and capacity to repay their borrowings. For the most part, those policies were the same policies that were applied for all home equity loan borrowers. If a Storm client was not capable of repaying a loan, the Bank would not have loaned him or her money. It’s as simple as that.
We are never going to be Australia’s biggest bank. To be honest, we don’t want to be. Australia has enough big banks, we simply want to offer customers an alternative, a bank that does things differently and puts the customer first. And we have a unique model that helps us deliver on that promise.
Whilst our model may be unique, we are still at the core a Bank. And as such, this means we are governed by the same level of regulation that all of our larger competitors face. We are an integral part of one of the most stable banking systems in the world.
I would reassure all of our stakeholders that we have and will continue to act only in the best interest of our customers, as without them, BOQ does not exist.
Over the past 12 months we have been quietly going about our business, assisting customers who need help, without feeling the need to talk about it in the press every five minutes.
It has been implied that because we are not following in the same footsteps of one of our larger peers in relation to Storm Financial, we are not helping our customers. This is simply untrue. We genuinely feel for those who were affected, both directly and indirectly, by the Global Financial Crisis and will continue to work directly with any BOQ customers who are experiencing financial hardship as a result of the GFC, or as a result of the collapse of Storm. In fact, we have written to all Storm affected customers asking them to contact the bank if they are experiencing hardship. We have already provided relief to many BOQ and Storm customers and as we have said a number of times, we are committed to keeping Storm affected customers in their homes by working with them on a one-on-one basis to find the best solution for them.
We have been compared with larger banking organisations whose involvement with Storm was different to our own in many ways. Let me reiterate – we did not provide margin lending, and we provided quotes, along with a variety of banks, for predominantly home equity loans. Each home equity loan we wrote was valued by an independent valuer. We did not have a formal relationship with Storm Financial, and did not receive or pay commissions to them. We were not a corporate banker to Storm. And we did not provide financial advice to customers as to where they should invest their money – in fact, under our banking license we are not permitted to do so. We made loans in good faith, and they were accepted by customers in good faith.
We have come under public attack from parties with their own agendas and vested interests, but we haven’t taken the bait. Because that’s not how we operate. We simply get on with the business of offering excellent service to our customers, great value to our shareholders, being a fun and rewarding place for our staff to work and providing competition to the big banks.