The Commonwealth Bank of Australia Ltd
(ASX:CBA) has reportedly agreed to pay victims of the collapsed Storm Financial a possible $200 million in compensation.
The Age reports CEO Ralph Norris saying that the bank’s commitment to its customers is to put things right where it had done wrong, and it is honouring this commitment.
Storm Financial was placed into liquidation after the financial planner’s business model, which relied on investors taking money out against the value of their home to invest in the sharemarket, was destroyed after the market took a dive in 2008.
According to the Age report the average CBA customer had a Storm margin loan of $1 million.
The bank will give each investor who took up a margin loan with the bank, a set amount of compensation and write-off any negative equity when the margin loan borrower owes the bank.
The move has not been reiterated by the banks peers with Macquarie Bank and Bank of Queensland ruling out any compensation for Storm Financial victims.
In fiscal 2009 the Commonwealth Bank earned profit of $4.7 billion.
