Media Release ¹8 January 2010
Are Commonwealth Bank Profits a Fair Suck of the
Taxpayer Sauce Bottle?
An investor lobby group “Light of Day Inc” has called on the Commonwealth Bank to reveal the how
much of the record $2.9 billion cash profits announced on FRIDAY (just six months after the Global
Financial Crisis) that has come from bank’s lending to the unlisted property sector.
Owen Lennie spokesman for the organization said Light of Day Inc is a not for profit group formed to
promote the interests of some 250,000 investors in the $60 billion unlisted property sector who are
having their investments and future retirement lifestyle converted into bank profits by excessive fee and
interest rate gouging.
The Prime Minister Mr Rudd should launch a Parliamentary Enquiry into whether these record cash
profits are a fair suck of the tax payer’s sauce bottle following the Government’s Guarantee and the
permissive stance of the ACCC to mergers in the banking sector.
“With one face the banks have been solemnly assuring customers and the government that they are
forced to raise interest rates because of the cost of money and with the other face they immediately
announce and celebrate record cash profits”.
Given the fact that the CBA has enjoyed a tax payer funded guarantee paid for by the community during
the Global Financial Crisis the Chairman of the Commonwealth Bank, John Schubert, should outline the
percentage of the profits which came from lending to the unlisted property sector, relative to the size of
this part of the CBA loan book.
Light of Day Inc also wants the Commonwealth Bank and all other Banks to announce their corporate
policy and activity on “Bundling”, where individual property trust investors can have their returns
impacted or stopped when the interest rate on one trust is determined across all property trusts under
one fund manager and the fund manager itself and its related companies, assessed as a single
customer group.
“This means investors who have chosen well performing trusts and syndicates could be paying higher
interest rates and fees because another legally separate fund operated by the same fund manager – or
even the fund manager itself or a related company – presents increased risk to a lender.”
“Mr Lennie said the domino impact on the property market of Australian banks forcing sales on unlisted
property trusts will ultimately flow on to lower valuations on a wide range of commercial property
securing banks’ loans, increasing provisioning and reducing funds available for bank lending to small
business.
Media Enquiries: Owen Lennie, Spokesperson, Light of Day Mobile: 0411 507 505
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