Australian bank shares gain on inquiry report relief

Ivan Schwartz
February 8, 2019

Australia's big four banks have gained more than $20 billion in value after relieved investors welcomed the Kenneth Hayne's royal commission's recommendations by driving the financial sector to what looks like its best day in a decade.

"There will be nothing positive in the recommendations because the banks have clearly breached various obligations in the laws, and obligations to good customer service", said Matthew Wilson, a banking analyst at Deutsche Bank.

It is now confirmed that Hayne does recommend a change to broker commissions, encouraging a flat fee for service to be paid by the borrower.

Not really. While the industry's worst fears didn't materialize in Commissioner Kenneth Hayne's final report, released February 4, banks had already made some sweeping changes.

"The board and I have reflected deeply on those and other issues and, as I have said previously, we take them very seriously".

"More particularly, I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly".

ONE of Australia's most respected regulators today warned banks might quickly forget the torrent of criticism they received from the Hayne royal commission.

"He was critical of the Chief Executive Andrew Thorburn". I know that it is not so.

"Rewarding misconduct is wrong", the report reads.

Henry: I've answered the question how I could answer the question.

Henry: I wish we had. They're the people who I want to spend some time with.

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Twitter users were not the only ones who thought Dr Henry's responses were unacceptable.

"I can't confirm that [I will still have a job]", he said.

Australia's two biggest financial institutions, National Australia Bank and Australia and New Zealand Banking Group, alongside counterparts Commonwealth Bank of Australia, Westpac Banking Corp, and wealth managers AMP and IOOF, were among the worst hit by the inquiry, although widespread impropriety was also found in other sectors including insurance. Henry said it was "not so" that he had been unwilling to accept criticism.

"I think that the legacy from Commissioner Hayne's report will be the conduct norms that he'd laid out and principles that regulators or governments should apply in legislation".

CBA CEO Matt Comyn said there was a "clear need for change", while ANZ's Shayne Elliott described the royal commission as "a humbling experience". I know that it is not so. The Board has led a deep examination of our culture, governance and accountability.

/Public Release. View in full here.

"It is our highest priority for everyone at NAB to put customers first".

"The price paid by our community has been vast and goes beyond just the financial", Australian Treasurer Josh Frydenberg said as the government promised to take action on all the recommendations.

In a statement to the Australian Securities Exchange on Tuesday morning, both said they were planning to stay on, with Thorburn announcing that he had cancelled his planned long-service leave, which had been scheduled to continue for the rest of the month.

NAB chairman Ken Henry addresses NAB's 2018 annual general meeting in Melbourne on Wednesday, December 19, 2018.

"But let's be frank, I called for the Royal Commission", he told reporters.

Other reports by GizPress

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