Home Page - Death of a Bank

Bank shuts down controversial North Ward branch
  • by: TONY RAGGATT
  • From: Townsville Bulletin
  • May 30, 2015 8:28AM

BANK of Queensland’s North Ward branch is to be shut down just weeks after another scandal involving false witnessing of loans.

The bank last night confirmed the “mutually agreed” closure would occur on June 30, with clients moved to other local branches.The North Ward branch came under heavy scrutiny for its lending to clients of Storm Financial.
It was responsible for low-doc loans to pensioners and borrowings of more than $100 million, mostly secured against people’s homes.

Bank spokesman Jamin Smith said agreement on the closure had been reached by the bank and branch owner-managers Declan Carnes and Matthew Buchanan.

The franchise agreement would not be renewed, Mr Smith said.

“As a result of this decision, the North Ward branch will be closing on June 30, 2015,” he said.

The branch’s customers would be “very well looked after by other managers”, while the bank would work with other Townsville owner-managers to try to find roles for the branch’s employees, Mr Smith said.

Mr Carnes sent an email to some clients yesterday thanking them for their “business and trust”.

“BOQ and both Matthew and myself have mutually agreed that, after 11 years as owner-managers, we will be leaving the bank,” the email read.

“As most of you know, Matthew and I have been with the bank over 20 years and it is time for a change.”

The North Ward branch was a key conduit for Storm, lending more than $20 million a month at the height of Storm’s popularity in 2007.

Bank documents indicated the branch was earning $100,000 a month in upfront commissions, while the bank’s take was estimated at more than $175,000 a month.

Property data showed Mr Carnes and Mr Buchanan amassed about $10 million in property assets in the four years leading up to the collapse.

But the bank’s 260 Storm clients as well as some other clients unrelated to Storm have been ruined.

North Ward client Helen Chambers, 75, whose income was found to have been incorrectly listed in loan documents at $104,000, yesterday said she was subject to bank reviews to be able to stay in her home.

This year Bank of Queensland sued Mervyn and Pamela Hills, both 70, for hundreds of thousands of dollars owed on a loan to buy a fish shop.

During the court case, Mr Carnes admitted staff regularly falsely witnessed loan applications.

In 2010, ASIC sued North Ward franchisee Senrac Pty Ltd but the case was dropped when Bank of Queensland agreed to a $17 million settlement with Storm customers.

One of those, Townsville’s Steve Reynolds, said he was in a no-win situation, with the bank now threatening to remove hardship provisions in return for him accepting a 10 per cent payout from the settlement.

“(They) have me and all the others by the short and curlies,” he said.

Comments