Under pressure: The Commonwealth Bank. Photo: AFR
The Commonwealth Bank may offer victims of its widely condemned financial planning scheme compensation worth hundreds of millions of dollars after intense pressure from the federal government to make a more ''considered'' public response to the scandal.
Shock-jock Alan Jones, the Greens and super funds have thrown their weight behind a royal commission.
The government's efforts to squeeze a more generous settlement from the bank's chief executive, Ian Narev, come as it seeks to shore up political support for its controversial wind-back of consumer protections in the former Labor government's Future of Financial Advice (FoFA) laws.
Mr Narev is also believed to be under pressure from the government to shuffle executive ranks over the debacle, which was the subject of a scathing Senate committee report recommending a royal commission on the bank, released on Thursday.
Pressure is also mounting from within the bank for Mr Narev, who has been largely absent from the public debate over allegations of forgery, fraud and a management cover-up within CBA's financial planning division, to step into the spotlight ''so clients can see the bank is taking it seriously''.
The Senate inquiry found that there should be a royal commission because regulator the Australian Securities and Investments Commission was ''reluctant to actively pursue misconduct'' within the bank.
ASIC chairman Greg Medcraft on Friday admitted there was ''an issue with trust and confidence in the financial advice industry''.
''The financial advice industry has to win the confidence of Australian consumers,'' he said.
Finance Minister Mathias Cormann this week met with Mr Narev to discuss the scandal and the Senate inquiry's findings.
On Friday, Senator Cormann was talking down the inquiry's recommendation for a royal commission on CBA.
There has only been one royal commission focusing on a single company in living memory, on the collapse of insurer HIH in 2001.
Shock-jock Alan Jones, the Greens and industry super funds have thrown their weight behind a royal commission, with Jones asking Prime Minister Tony Abbott to call one ''immediately'' during his breakfast radio slot on Sydney's 2GB on Friday.
However, Senator Cormann said that arguments against a royal commission mounted in a dissenting report tabled by the committee's deputy chairman, Liberal senator David Bushby, were ''persuasive''.
In a statement, CBA also pointed to Senator Bushby's six-page dissent, and said it had ''worked openly and transparently'' with the inquiry and ASIC.
Senator Cormann said: ''I have spoken to Ian Narev about the findings of the Senate economics committee today and I am confident that he and the CBA will have more to say by way of a considered response to their report next week.''
He dismissed suggestions the government should reconsider its rollback of FoFA, saying that the financial planning industry had ''worked hard to lift professional, ethical and educational standards'' since the CBA debacle, which ''happened some time in the past, incidentally over the period of the previous government''.
Australian Electoral Commission records show that last year the Liberal Party's Cormack Foundation reaped $938,400 from dividends earned from CBA shares. A spokeswoman for Senator Cormann said the money played no part in the minister's decision-making.
While the CBA has issued seven public statements on the financial planning scandal since June last year, when Fairfax Media first revealed allegations of misconduct, Mr Narev is not quoted in any of them. A CBA spokeswoman said Mr Narev was not available for comment and declined to say where he was on Friday.
She also declined to say whether executives named by Fairfax Media had the confidence of Mr Narev and the bank board.
During a conference call on Friday morning, financial planners at one of the bank's advice arms, Financial Wisdom, called for Mr Narev and the bank to mount an ''all guns blazing'' defence in the media.
''Unless Ian Narev comes out this will drag on for a long time and cause a lot of pain,'' one planner said. ''Narev as CEO needs to talk.''
Asked about one of the bank's worst planners, named in the Senate as ''Dodgy'' Don Nguyen, on ABC TV's Lateline in March, Mr Narev said: ''Well, I don't want to talk about that specific case.''
While not ruling out that a royal commission might eventually be needed, opposition financial services spokesman Bernie Ripoll said the government should first look at the results of a raft of inquiries that are already under way, including the Financial Services Inquiry being run by former Commonwealth Bank chief David Murray.
''Let's make sure that people who are named in this - CBA and others - learn from this.'' He said the government should abandon its plans to roll back FoFA.