Media Release
Monday, 23 November 2009
Storm Financial collapse means now’s the time to end reckless sales and bonus culture: FSU
Tuesday’s Parliamentary report into the collapse of Storm Financial should take direct aim at the runaway
culture of sales and bonuses that plagues Australian banking, the Finance Sector Union said.
The Parliamentary Joint Committee heard shocking evidence of banks jacking up sales targets for debt
products in North Queensland—to entice more people to go into debt by getting into Storm products.
Commonwealth Bank alone increased targets by $170 million in the area.
“Banks have tried to portray Storm Financial’s collapse as a local, one-off issue,” said Rod Masson, the FSU’s
Acting National Secretary. “Nothing could be further from the truth. The sales and bonus culture was alive
and well in bank head offices from Brisbane to Sydney, cashing in no matter how high the risk.”
Despite Commonwealth openly admitting it had made mistakes, the bank still tried to pin blame on local
branches. But the inquiry heard evidence to the contrary, as Commonwealth, along with Bank of Queensland,
showed some of the systemic failures behind the sales and bonus culture.
A Commonwealth bank audit of 600 Storm-related files showed no departure from approved internal process.
“From Wall Street to Townsville, a banking system driven by incentives to sell more debt is blinded to the
risks,” Mr Masson said. “It’s time to break this cycle before it creates the next economic mess. The committee
needs to make eradicating the sales and bonus culture one of its core recommendations.
“If the committee fails to heed the Storm warning, more Australian families will be at risk of losing their life
savings as bank executives enjoy the latest bonus season,” he said.
Well before the global financial crisis hit, the Finance Sector Union called for a de-linking of bank worker
remuneration from aggressive sales targets designed to get more Australians into debt. And in the crisis’s
wake, it said the committee should make it clear that banks doing business as usual isn’t on.
“We’ve heard a lot from the Government about the dangers of high-risk, high-debt practices from banks,” Mr
Masson said. “But we’ve not seen much action in stamping those practices out. We hope tomorrow’s report
takes a firm first step towards the sustainable finance sector that Australians want.”
For more information:
Jamey Heath, media, 0432.828.005
Rod Masson, spokesperson, 0408.374.677
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