The Commonwealth has worked out how much the bank levy will cost

Photo: Anoeke De Groot/AFP/Getty Images

The Commonwealth Bank says the new federal government levy on major banks will cost it $315 million a year — or about $220 million after tax.

In an letter to shareholders, Australia’s biggest bank says it had limited information on which to base its calculations.

The liability base on which the levy is calculated will exclude about $240 billion of deposits covered by the Financial Claims Scheme, as at the end of March.

“We have expressed serious concerns that the new levy is a poorly designed policy, done without consultation, which impacts not just on the banks but also on our shareholders and customers,” says chairman Catherine Livingstone.

“The budget announcement also included a number of other measures which potentially intrude into the operations of the banks and have significant implications for good corporate governance.

“For example, the fact that regulators will be empowered to override your Board calls into question the established fundamental governance framework which governs publicly listed companies.”

The bank in February posted a record half year cash profit of $4.91 billion.

Westpac earlier today announced the federal budget’s new bank levy will cost about $370 million a year.

And that means the tax will strip 8 cents a share, or about 4.3% of dividends, based on Westpac’s 2016 full year dividends of 188 cents.

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