GOVERNMENTAL INVESTIGATIONS – AUSTRALIA

Banks’ election risks rise

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 12-Feb-19

Labor requires 76 votes in the lower house to force parliament to sit for an additional two weeks to legislate some of the Hayne royal commission’s recommendations. The support of crossbenchers may be crucial, and independent MP Bob Katter says he may be prepared to back Labor’s motion. This could potentially see the government abandon a deal struck with Katter regarding supply and confidence following the Wentworth by-election. Prime Minister Scott Morrison argues that there is insufficient time before the election to enact all of Hayne’s recommendations that will require legislation.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DIRECTOR OF PUBLIC PROSECUTIONS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Henry should not pick new NAB chief: Costello

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 18 : 12-Feb-19

Former federal treasurer Peter Costello suggests that regulators’ failure to prosecute misconduct in the financial services sector was due to reluctance to enforce the law rather that funding constraints. Costello also believes that it is inappropriate for National Australia Bank chairman Ken Henry to oversee the appointment of a new CEO. Henry will step down after a successor to Andrew Thorburn is recruited. Costello adds that bank directors and executives must prioritise compliance with the law in the wake of the financial services royal commission.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC

APRA holds back on Hayne rebuild

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Original article by Ben Butler, Joyce Moullakis
The Australian – Page: 17 & 21 : 12-Feb-19

The Australian Prudential Regulation Authority has stated that it will implement nine of the 10 banking royal commission recommendations concerning it by 2020. However, APRA has not given a timeframe on when it will implement the recommendation to change its prudential focus to concentrate on misconduct. APRA has also stated that an increase in its budget, currently at around $140 million a year, might be needed to implement this recommendation.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BAKER AND McKENZIE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Big four back in favour for investors

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Original article by Scott Murdoch
The Australian – Page: 17 & 20 : 11-Feb-19

Australia’s banking index gained six per cent in the week ended 8 February, with the rally being attributed to renewed interest in the sector among international equity investors. Rahoul Chowdry of law firm Minter Ellison notes that sovereign risk concerns regarding Australian banks have abated following the release of the financial services royal commission’s final report. Mike Evans from the Bank of America Merrill Lynch and Marianne Birch of Macquarie Capital agree that the final report has created greater certainty for investors.

CORPORATES
MINTER ELLISON, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, MACQUARIE CAPITAL PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CITIGROUP PTY LTD

NAB in turmoil as duo exit

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Original article by Joyce Moullakis, Ben Butler
The Australian – Page: 1 & 4 : 8-Feb-19

Phil Chronican will become acting CEO of National Australia Bank after Andrew Thorburn advised that he will step down on 28 February. Chairman Ken Henry will also step down when a permanent CEO is appointed. Thorburn and Henry in particular had attracted criticism in the financial services royal commission’s final report over their reluctance to accept responsibility for the misconduct that was exposed by the inquiry. Some fund managers expect NAB to choose an external candidate to replace Thorburn, although Mike Baird and Anthony Healy are said to be among the internal contenders.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC, MEDIBANK PRIVATE LIMITED – ASX MPL, AMP LIMITED – ASX AMP, COMMONWEALTH AGRICULTURAL BUREAU INTERNATIONAL, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, THE HUMAN GROUP, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

Finance Royal Commission likely to disrupt distribution of financial products

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Original article by Roy Morgan
Market Research Update – Page: Online : 8-Feb-19

Financial intermediaries (including mortgage brokers and financial planners) currently account for the distribution of 35% of the total value of the major financial products. A number of the recommendations of the Financial Services Royal Commission relate to mortgage brokers and financial planners and if adopted, are likely to negatively impact their usage, particularly as it relates to borrowers rather than the lenders paying fees. Financial planners are also likely to be impacted by the need for greater fee disclosure, clarification of independence, improved focus on the best interests of the customer and the need to provide service for any fee involved. These are some of the latest findings from Roy Morgan’s Single Source survey in the 12 months to August 2018, which is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including detailed questioning across all aspects of investing, borrowing, insurance and banking.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Morrison faces recall push over proposals

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Original article by Phillip Coorey
The Australian Financial Review – Page: 10 : 7-Feb-19

Opposition Leader Bill Shorten says the federal government must begin implementing the recommendations of the financial services royal commission’s final report prior to the upcoming election. Labor will seek the support of lower house crossbenchers for a motion to recall parliament for an additional two weeks in March, with a view to legislating some of commissioner Kenneth Hayne’s recommendations. Shorten says that unless action is seen to be taken quickly, the general public will believe that the misconduct exposed by the inquiry will be allowed to continue.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

Prosecutors told to push the envelope

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Original article by James Frost, Liz Main
The Australian Financial Review – Page: 10 : 6-Feb-19

The fees-for-no-service scandal has cost Australia’s four major banks and wealth manager AMP more than $2bn to date. They may also face prosecution under section 1041G of the Corporations Act, after the final report of the financial services royal commission recommended that ASIC should expand its existing probe into potential breaches of this section to include more companies. This is in addition to a recommendation by commissioner Kenneth Hayne that 24 cases of misconduct should be referred for potential civil or criminal action.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AMP LIMITED – ASX AMP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, IOOF HOLDINGS LIMITED – ASX IFL, SUNCORP GROUP LIMITED – ASX SUN, COLONIAL FIRST STATE GROUP LIMITED

NAB bosses dig in: we’ll fix culture

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Original article by Joyce Moullakis
The Australian – Page: 1 & 5 : 6-Feb-19

Brett Le Mesurier of Shaw & Partners expects National Australia Bank CEO Andrew Thorburn to resign by the end of February, followed by chairman Ken Hendy later in the year. However, Thorburn has indicated that he will remain in his role despite attracting criticism in the final report of the financial services royal commission. He also says NAB will review and revise its strategy to improve its culture and governance.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, SHAW AND PARTNERS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI

Labor says PM squibbed on Hayne

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 6-Feb-19

Opposition Leader Bill Shorten has called for federal parliament to sit for an additional two weeks in March to allow some of the financial services royal commission’s recommendations to be enacted before the election. Meanwhile, Labor claims that the government has not fully committed to implementing 14 of the 76 recommendations outlined in the inquiry’s final report. Both Prime Minister Scott Morrison and predecessor Malcolm Turnbull have conceded that the inquiry should have begun much earlier.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN CONSUMERS’ ASSOCIATION