Commonwealth Bank set out to reduce the commercial property exposure of its Bankwest arm by around one tenth in 2009, but the bank wasn't seeking any early exit early from loans that were not in default, the financial services royal commission heard yesterday.Brett Perry, general manager for restructuring and credit management at CBA, touched on the thinking behind the infamous (in some eyes) Project Magellan undertaken by CBA in 2009, months after its late 2008 takeover of Bankwest.Michael Hodge, counsel assisting the commission, put it to Perry that "there was this concern, which was 51 per cent of assets had been classified as commercial property, and there was a target by the end of 2009 to reduce this to 45 per cent?""Yes," Perry agreed. Perry, in a witness statement, said he was not aware of any Bankwest records that indicate that there was any general policy to withdraw from funding property deals for existing bank customers before any facility's expiry date. Hodge asked: "What you're trying to say is Bankwest isn't trying to exit early from loans that it has already made that have an expiry date and that aren't in default?"Perry replied: "Correct" Perry agreed with propositions that "when the borrower enters into the facility at the time they enter into it, they understand, or they ought to understand, that it has a particular term", and that "the borrower takes the risk that, as at the end of that expiry date, Bankwest may or may not be willing to refinance." Hodge asked: "And one of the things that you understand that happened within Bankwest was that, once this level of risk associated with borrowing for commercial property was identified, that there were then caps that were put in place to try to reduce the level of borrowing for commercial property and the consequence was that, when it came to considering extending a facility, or refinancing a facility, that this policy would be relevant?""Yes", Perry said. "Because extending a facility is not terminating a facility early; it's making a decision that the bank wants to continue or enter into a new relationship?""At the end of a term, yes," Perry said.Commissioner Kenneth Hayne heard from three Bankwest borrowers, none from the small business end of the market and all with significant commercial experience.