Wednesday, August 13, 2014

Commonwealth Bank record profit fails to quell heat from financial planning scandal

For Ian Narev, today's full year financial results presented a rare opportunity to accentuate the positive.

There was little else to do given the damage already done to the Commonwealth Bank's reputation over the scandal embroiling its financial planning arm.

So today, the full tool box of public relations spin was deployed as the results hit the stock exchange just after 8.30am.

Here's my analysis from today's edition of The World Today.

Not surprisingly, the CBA's team of media, investor and government relations advisors have spent recent weeks and days polishing messages and preparing Ian Narev and chief financial officer David Craig for the inevitably tricky questions on how they plan to defuse the fallout from the scandal.

This morning's investor briefing was a tame affair and Mr Narev was under little pressure to account for the conduct of his financial planners.

However, journalists are certain to pose harder questions at a media conference later today given the financial and reputational cost to the CBA, which over 102 years has been trusted for its conservative strategy and management.

The intensifying scrutiny is unavoidable, and today despite some hoarseness, Mr Narev will embark on print, television and radio interviews that will run until late in the afternoon.

And given the widespread concern about the financial planning scandal, Commonwealth Bank media minders are likely to have received interview requests from the range of media outlets across Australia.

As the CBA boasts in today's media release on today's results, there are nearly 800,000 households who own the bank's shares directly or through their superannuation schemes.

And in addition to employing 50,000 Australians, the CBA reminds us of its contribution to the economy and $4 billion pumped into local suppliers and partners.

The CBA brands itself with charities, sporting organisations and communities across the country with big financial contributions that are part of its charter for corporate social responsbility.

However, even another record result of $8.63 billion posted today will not be enough to deflect the glare of a concerned federal government and a corporate regulator under pressure to lift its game.

Ian Narev knows it will be a long road before the noise from the scandal begins to fade.

But it emerged on his watch when he was a key member of the CBA's senior management team and one that could partly define his legacy as chief executive.

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