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John Symond sells up final stake in Aussie

Colin Kruger, CBD
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CBD was pleased to see that someone in the Commonwealth Bank family had reason to smile on Wednesday. 

Aussie Home Loans founder John Symond will be making out like a bandit – again – as he sells his remaining 20 per cent stake in the mortgage broking business to the bank, which could yield a $100 million-plus pay day. 

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Narev: CBA made 'mistakes'

Commonwealth Bank chief executive Ian Narev says the bank has 'made mistakes' relating to alleged breaches of anti-money laundering and counter-terrorism financing laws.

It also ends his ownership of the business that broke the banking sector's stranglehold on the home loan market in the 1990s, armed with the catchcry "we'll save you".

They meant save you, the customer, from the banks. 

That ended in 2008 when financing options for the non-banks evaporated in the face of the financial crisis, and these players, like Aussie, were pushed into the arms of the big banks at what would have been a bargain price. They probably saved him. 

When Symond sold a 20 per cent stake to CommBank, he was dealing with one of its promising executives, a young gun by the name of Ian Narev. 

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Symond probably got a better deal in 2012 when he received 2.75 million CBA shares for the 47 per cent stake he handed to the bank.

The stock was worth $185 million when he received it, and more than $220 million today if he still holds it. And CBD is told he does. 

​The 2012 sale agreement included an option for the bank to acquire the remainder of the business.

There was also a four-year contract for Symonds to remain as executive chairman, which would have expired before Christmas.  

So the only question really was, what price the two parties would agree on for that final stake. 

CBD is told a final price will be set later this month based on the June 30 financial results of the Aussie Home Loans business. It reported a net profit of $35 million for the 2016 financial year. 

Symond is hoping to do an even better deal, proportionately speaking, for his remaining stake in the business, but CommBank may beg to differ.

It values its 80 per cent stake at $272 million in last year's annual report, which puts Symond's stake at $68 million.   

A bigger issue might be Aussie's claims of independence. 

Symond will remain as non-executive chairman, and his nephew James Symond will remain the boss. 

"Give it a month and ask the consumer in the street, they wouldn't have a clue who owns what," Symond said when the previous deal was consummated in 2012. "They just want the best deal they can get."

And Narev was assuring there would be no change to this message on Wednesday. "They come into Aussie for its independence. That's how we aim to continue to run it," he said. 

Lost in the matrix

No prizes for guessing that CommBank's press conference on Wednesday attracted a bit of interest. And former child actor Narev did a great performance of someone trying to be as open as possible about the whole Austrac fiasco. 

"We made mistakes," he told the journos assembled at its Sydney HQ. "We're not saying it's all about a software error." 

Which adds to the accountability muddle due to the bank's matrix business structure. 

As Narev pointed out, the intelligent deposit machines (IDMs) are deployed in the bank's branches, which means they come under the retail department. But the infernal coding issue that caused part of the problem comes under enterprise, and the whole monitoring shemozzle comes under the risk management team. 

So does the investigating committee take the red pill or blue pill? 

Narev was also asked if he had offered his resignation to the bank's new chairman, Catherine Livingstone.

He was not going to go into that sort of detail about their discussions, but he did helpfully offer the fact that "we have a very open relationship".

Livingstone may have been thanking her lucky stars that Narev was not asked to clarify that any further. 

Earlier he was asked whether anyone at CommBank has lost their job over the scandal.

"What Catherine's announcement has made clear is that since 2015 there have been changes in the leadership positions," replied Narev rather vaguely.

"People can have confidence that there are very capable people running these areas and the board's also said it's got a subcommittee that, in the course of what it does, will identify whether there's any further management accountability and will have more to say about that as it does its work."

Follow-up question: has anyone lost their job?

"That's where we are at the moment," came the helpful reply.

​The bank was also pretty strident in claiming there was no commercial motive to rolling out the IDMs at the centre of the scandal.

"A lot of people have inferred that there's a connection between a desire to ... make money through the IDMs and there isn't."

Did we mention that the bank announced a $9.9 billion profit on Wednesday, coming in ahead of market expectations? 

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

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