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CBA CEO denies 'loyalty tax' on customers

Stuart Condie
CBA CEO Matt Comyn has denied slugging existing mortgage customers with a "loyalty tax"

Commonwealth Bank chief executive Matt Comyn has denied slugging existing customers with a "loyalty tax" despite newcomers often being able to secure a lower mortgage rate.

Mr Comyn told the House of Representatives' economics committee on Friday that Australia's biggest bank did not actively seek to keep existing borrowers on a higher rate, but was operating in a very competitive market.

"We don't seek to distinguish between new or existing but we do recognise that the prevailing offers that are available in any market at a point in time can occasionally differ," Mr Comyn said.

Mr Comyn said the bank had proactively contacted customers to offer them some of the same deals available to new customers, although he was referring to fixed-rate products rather than the variable-rate loans that are typically discounted to attract new business.

The discrepancy between rates offered new borrowers and existing customers is one of the issues being considered by the consumer watchdog in the government-mandated inquiry into home loan pricing announced last month.

Mr Comyn acknowledged the bank - and industry as a whole - had more work ahead if it was to win back customer trust following the costly misconduct revelations aired at last year's financial services royal commission.

"We expect to be judged on our actions, not on our words," Mr Comyn said.