TORONTO (Reuters) - Bank of Nova Scotia (BNS.TO) and Bank of Montreal (BMO.TO), two of Canada’s biggest banks, on Tuesday defended their sales practices after media reports that staffers were pressured to meet targets.
Canada’s financial watchdog is investigating sales practices at the country’s banks and expects to conclude its investigation by the end of the year.
The probe follows media reports that staff at the country’s biggest banks were pressured into meeting sales targets by moving customers to higher-fee accounts and raising credit card and overdraft limits, both without customers’ permission.
Scotiabank Chief Executive Brian Porter told shareholders at the bank’s annual meeting on Tuesday that he believed the bank’s sales practices were “very sound”.
“We have over 8 million customers in Canada, we did over 400 million transactions last year and we had only eight customer complaints about sales practices,” he said.
Scotiabank Chairman Thomas O‘Neill told the meeting the bank had already been paying greater attention to its sales practices after U.S. bank Wells Fargo & Co (WFC.N) agreed to a $185 million settlement with regulators last year following allegations its staff opened unauthorized customer accounts.
O‘Neill said attention on the issue was heightened further following the recent media reports in Canada and the board spent an hour reviewing the topic at a meeting on Monday.
Speaking to reporters after the meeting, James O‘Sullivan, Scotiabank’s group head, Canadian banking, said the bank was sifting through customer data to assess its sales practices.
“Since the Wells Fargo issue, we’ve been looking at it very, very deeply,” he said. “Our sales practices are sound. That is not opinion. That’s a reasoned conclusion based on the information and the data that we have.”
Speaking to shareholders at Bank of Montreal’s annual meeting on Tuesday, Chief Executive Bill Downe said he had a “high degree of confidence” in the bank’s staff and believed the bank had good practices with regard to sales.
“With respect to our bankers, I have confidence that they know we’re not in business to push products. We guide our customers in picking services that best meet their needs.”
Downe said the bank had been reviewing its procedures since the reports.
“We track incidents of customer or employee dissatisfaction and I’ve seen no movement in the numbers in the most recent period,” he said.
Fair Canada, a group advocating for investor rights, on Tuesday called on the Canadian Securities Administrators, an umbrella body of all of Canada’s provincial securities regulators, to address the recent reports.
Reporting by Matt Scuffham; Editing by Chizu Nomiyama and Matthew Lewis