SYDNEY, Feb 5 — Australian bank bosses lined up to offer mea culpas over shocking behaviour exposed by a landmark misconduct inquiry, but there was relief in the stock market today that proposed remedies would not radically remake the industry.
The chairman of AMP Ltd, the country’s largest financial planner, said he was ready to deal with any criminal prosecutions that could come out of the Royal Commission’s report, which was made public late yesterday.
The report, headed by former High Court judge Kenneth Hayne, concluded a year-long inquiry that aired allegations of fee-gouging, irresponsible lending and other wrongdoing.
Hayne made 76 recommendations for change, which the government said it would act on, and referred two dozen cases to regulators for possible prosecution.
Investors took comfort from the fact most recommendations centred on behaviour and culture, rather than the structure of banking itself, with shares of the four major banks and AMP all jumping at the start of trade.
“The recommendations... whilst promoting a stronger framework for conduct, culture and operational risks, are unlikely to alter the favourable structure of the banking industry, which supports its profitability,” Moody’s Investors Service said a statement on the report.
Shares of the biggest bank, Commonwealth Bank of Australia , were up 4 per cent in early trading, while No. 2 lender Westpac Banking Corp jumped 5 per cent and third-ranked Australia and New Zealand Banking Group Ltd rose 4 per cent.
National Australia Bank Ltd was up 3 per cent, the smallest gainer of the “Big Four”, while AMP shares, which had move than halved during the inquiry, leapt 7 per cent.
UBS analysts said in a note that while it was possible that the banks may face criminal proceedings “we do not believe that any of the 76 recommendations by themselves will have a material financial impact on the banks”. — Reuters
