Commonwealth Bank of Australia shares fell as much as 3.74 percent on Wednesday morning, their biggest intraday fall since February, as executives of its pension unit give evidence at a powerful inquiry into financial-sector wrongdoing.
The inquiry heard on Tuesday that the country’s largest bank had breached a “legislative provision” when it failed to transfer 15,000 pension customers to a low-cost product.
The Royal Commission inquiry has already roiled the banking and funds management industries, and is now questioning managers of some of the largest retirement funds about suspected misconduct and poor governance.
Documents read at the Royal Commission on Tuesday showed the CBA failed to comply with a law introduced in 2014 to provide low-cost retirement funds — dubbed superannuation funds — to some clients who did not choose a specific retirement savings product.
Linda Elkins, executive general manager of CBA’s Colonial First State unit, said some pension fund clients were not transferred to low-fee products because the company’s computer systems could not support the move.
The inquiry had previously exposed how the Sydney-based bank overcharged and misappropriated funds from customers, including extracting fees from deceased clients.
CBA bank this month reported its first profit fall in almost a decade due to mounting regulatory costs, including provisions to cover costs related to the year-long inquiry and penalties for breaches of anti-money laundering rules.
Contributing to the fall in value, CBA shares began trading ex-dividend on Wednesday as Elkins and other executives continue to be questioned at the quasi-judicial inquiry in Melbourne.
Shares in Australia’s three other big banks were little changed, in line with the broader market.