This morning Crikey received the below internal memo from Commonwealth Bank CEO Ralph Norris sent to Commonwealth employees. We received this from an anonymous tipster:
From: Chief Executive
Sent: Friday, 5 November 2010 10:55 AM
To: All Bank Staff
Subject: Message from CEO Ralph Norris (5 November 2010)A message from Ralph Norris
Dear Colleagues
I have been in China this week on a planned visit to meet with leaders of our partner banks. However, I wanted to write to you as I know for many people this has been a very difficult week dealing with customers who have expressed concern at our announced increase in interest rates.
These decisions are always difficult to make, as we need to achieve the right balance between the interests of our borrowers, depositors and shareholders. Since the Global Financial Crisis began our total funding costs have increased by 1.35 per cent above the Reserve Bank of Australia cash rate. It is important to note that throughout the crisis we have supported customers with home loan lending rates that have been either at the lowest or second lowest level in the Australian market.
We have continued to absorb a significant proportion of the increased costs and have held off for several months in adjusting our lending interest rates as our cost of funding has continued to rise. Even with this increase our retail lending rate margins are still lower than they were going into the crisis as we have absorbed the additional costs, and will continue to do so.
The alternative to making these changes would mean that we would have to seriously look at other options to reduce costs, such as curtailing services. I don’t believe our customers would want us to reduce our services, which have significantly contributed to our tremendous progress on customer satisfaction measures in recent years.
All of us have friends and relatives who are affected by these interest rate changes and it is important to let them know that the Bank is endeavouring to balance the interests of its stakeholders. I also realise that you, as employees of the Group, are affected.
You can be assured that this decision was not taken lightly and if there had been any way to avoid lifting our lending rates I would have taken it. Again, thank you for the effort you have given in what has been a very difficult week.
Kind regards
Ralph Norris
Hey Ralph,’
Show you care by dropping your pay by a couple of Mill
You know, I reckon the simple solution to the banks – for two weeks after any rate rise, all senior executives and board members must work on the front line. One per outlet (no safety in numbers) with a sign over their desk informing everyone they were responsible for the rate rise.
I understand about increasing costs – I’ve had a few of them myself lately – but WHEN will we see the explanation of how all the costs going up … are not linked to the %&*@#$ (emphasis on the ‘$’) profit going up too!!!!
@aufozzy – GREAT idea.
Ralph needs to get his hand off it.
He has NO credibility based on his own outrageous pay grab…..no-one is worth $320K a week in a public company, particularly when it’s guaranteed by the Federal Government.
What a monumental jerk.
It’s a bit mysterious as to why the banks continue to post healthy profits while raising interest rates to ‘cover costs.’
Perhaps one overhead that could well be trimmed is executive salaries.
It’s hard to see why the CEO of a bank which routinely fleeces its customers (bank charges, anyone?) should claim a salary in the tens of millions without some consideration of the relationship between the scale of charges and customer satisfaction.
If that’s an important benchmark, then the mock-on-wealth really has a long way to go yet if it’s going to truly ‘earn’ peoples’ custom.