GOVERNMENTAL INVESTIGATIONS – AUSTRALIA

CBA shock that Bankwest wasn’t up to scratch

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Original article by James Frost
The Australian Financial Review – Page: 7 : 30-May-18

The business loans portfolio of Bankwest came under scrutiny by the banking royal commission on 29 May. The Commonwealth Bank’s chief risk officer David Cohen told the inquiry that the loan book was reviewed after Bankwest’s acquisition in 2009, and concerns were raised about the quality of the loan book and the procedures used for granting loans. Bankwest CEO Jon Sutton also expressed concern about the quality of its business loan book in April 2009 and again in March 2010.

CORPORATES
BANKWEST, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Banking inquiry risks credit crunch

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Original article by Adam Creighton
The Australian – Page: 4 : 30-May-18

Treasury secretary John Fraser appeared before the Senate economics committee on 29 May. He said the banking royal commission may lead to stricter lending standards in the sector, which could in turn potentially result in a "credit crunch". Meanwhile, Finance Minister Mathias Cormann has told the committee that there is no reason for the government to provide year-by-year costings for its personal income tax cuts package. He argued that Labor did not provide such costings for the National Disability Insurance Scheme when it was in office.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. SENATE STANDING COMMITTEE ON ECONOMICS, AUSTRALIAN LABOR PARTY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANK OF WESTERN AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Lawyers alarmed by Hayne inquisition

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Original article by Misa Han
The Australian Financial Review – Page: 34 : 25-May-18

There are suggestions that the banking royal commission lacks procedural fairness, both for companies and individuals that appear before it. Dr Matt Collins, who is the ANZ Bank’s chief counsel and president of the Victorian bar, notes that the rules of evidence that apply in a normal court do not apply in a royal commission, and this means that some of the evidence given before the commission can be unreliable. Grant Hoole from the Gilbert + Tobin Centre of Public Law at the University of New South Wales says witnesses before a royal commission who are facing serious allegations should have the right to be questioned by their own counsel, for the sake of fairness.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, UNIVERSITY OF NEW SOUTH WALES, GILBERT AND TOBIN LAWYERS, HENDERSON MAXWELL PTY LTD

Westpac filled forms with false details

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Original article by Ben Butler, Elizabeth Redman
The Australian – Page: 17 & 21 : 23-May-18

Westpac’s loan practices continued to attract scrutiny by the banking royal commission on 22 May, in the wake of revelations regarding the bank’s handling of a case in which a blind woman had acted as a guarantor. Westpac executive Alastair Welsh told the inquiry that the bank’s employees have been known to enter false information into loan documentation. He also conceded that the procedures Westpac follows in assessing whether a guarantor is likely to gain any financial benefit are more "form than substance".

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, FINANCIAL OMBUDSMAN SERVICE LIMITED, NEW SOUTH WALES LEGAL AID COMMISSION

Bank confessions reach new lows

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Original article by James Frost
The Australian Financial Review – Page: 1 & 4 : 22-May-18

The banking royal commission is currently examining small business lending, with public hearings on the issue commencing on 21 May. Counsel assisting the commission read out a summary of admissions of poor behaviour in this area from various banks, including a confession from the Bank of Queensland that it had been charging corporate loan customers the wrong interest rates and fees. The commission was told that 87 per cent of loans to small businesses are secured by real estate.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN BANKERS’ ASSOCIATION

Westpac in hot seat over business lending

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Original article by James Frost, James Eyers, Edmund Tadros
The Australian Financial Review – Page: 1 & 6 : 21-May-18

The banking royal commission’s third round of hearings will focus on loans by banks to small and medium businesses. The hearings are expected to examine issues such as unfair contracts, what defines a small business and the banking code of practice. Australian Banking Association CEO Anna Bligh is among the witnesses who are scheduled to appear before the inquiry, while Westpac is expected to come under attack over its lending practices to small businesses.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN BANKERS’ ASSOCIATION, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, CAMERON RALPH PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, SUNCORP GROUP LIMITED – ASX SUN, CUSTOMER OWNED BANKING ASSOCIATION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Super funds slam short term banks

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Original article by Michael Roddan
The Australian – Page: 17 & 21 : 17-May-18

Institutional investors want directors and executives of Australia’s banks to be more accountable in the wake of the banking royal commission. AustralianSuper’s chief investment officer Mark Delaney says the major banks have been too focused on short-term profits, although he notes that this has changed in the last two years. UniSuper chief investment officer John Pearce says the findings of two recent Australian Prudential Regulation Authority investigations have been more damning than the royal commission’s revelations.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIANSUPER PTY LTD, UNISUPER LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, IFM INVESTORS PTY LTD, FIRST STATE SUPER, REST SUPER PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AMP LIMITED – ASX AMP, COCA-COLA AMATIL LIMITED – ASX CCL, BLOOMBERG LP

Wilson warns on rotten AMP

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Original article by Sarah Turner
The Australian Financial Review – Page: 13 & 26 : 16-May-18

Fund manager Geoff Wilson says former AMP employees have told him that its financial planning division is completely "rotten" and the banking royal commission’s revelations of misconduct are just the beginning. Wilson says the scandals at AMP have made it difficult to value the stock, and there may not be a price at which it constitutes a "buy". There is speculation that the royal commission may result in stricter regulation of the financial services sector, but Antipodes Partners’ Graham Hay cautions against any action that may actually reduce competition.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, ANTIPODES PARTNERS

Fears of big job losses from inquiry fallout

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Original article by Michael Roddan
The Australian – Page: 20 : 15-May-18

Automation has already put around 50,000 financial services jobs at risk, and job losses in the sector may increase in the wake of the banking royal commission. Sally Auld of JPMorgan says the loss of jobs as a result of the inquiry could be greater than those shed during the last financial crisis. Tommy Wu of IBISWorld notes that the banking sector’s revenue has fallen by over $A10 billion in the last five years, and it could fall even further as a result of the royal commission.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, JP MORGAN AUSTRALIA LIMITED, IBISWORLD PTY LTD, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, UBS HOLDINGS PTY LTD, RICE WARNER ACTUARIES PTY LTD, MOODY’S INVESTORS SERVICE INCORPORATED, MACQUARIE GROUP LIMITED – ASX MQG

Bank scandals to impact all business: BHP

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 14-May-18

BHP CEO Andrew Mackenzie warns that the banking royal commission’s revelations about misconduct in the financial sector have implications for the broader business community. He says other companies will have to be more transparent and accountable, particularly with regard to remuneration. A survey has found that BHP’s reputation has risen strongly in the wake of a marketing campaign and rebranding in 2017. BHP and Rio Tinto have had their own scandals in recent years, including corruption investigations and tax disputes.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RIO TINTO LIMITED – ASX RIO, SAMARCO MINERACAO SA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT