SYDNEY: Australia’s big banks and wealth managers pursued profit ahead of their customers’ interests and saw regulatory compliance as a cost rather than a guide to proper conduct, a scathing interim report from a commission of inquiry said on Friday.
The sector has been rocked by months of revelations of wrongdoing stemming from the Royal Commission, driving down share prices and trashing the reputations of some of the country’s biggest companies.
Commissioner Kenneth Hayne’s report was brutal in its assessment of the industry’s ethical standards and governance while also criticizing efforts by the regulator to police behavior, although it did not immediately recommend any legal action or reform. A final report is due in February.
In almost 60 days of public hearings, the inquiry has heard instances of bribery, fraud, fee-gouging and board-level deception across the industry.
Some of the more shocking allegations included the charging of fees to dead people, persuading a legally blind pensioner to be a loan guarantor without warning her of the risks, and the aggressive selling of a complicated insurance product to a boy with Down Syndrome over the telephone.
The three-volume report blamed a widespread culture of avarice.
“Too often, the answer seems to be greed – the pursuit of short-term profit at the expense of basic standards of honesty. How else is charging continuing advice fees to the dead to be explained?” it said.
The banking lobby said the interim report marked a “day of shame” for the country’s lenders.
“There are no excuses for the behavior that has been exposed by the Royal Commission,” said Anna Bligh, chief executive of the Australian Banking Association.
In separate statements, the Commonwealth Bank of Australia, Westpac Banking Corp, Australia and New Zealand Banking Group and National Australia Bank acknowledged the wrong-doing raised in the report.
They pledged to provide a more comprehensive response in October. The four are due to face questioning over the report before a parliamentary committee next month.
The lack of immediate recommendations helped lift Australia’s financial index 1.6 percent on Friday. The big four banks have lost some A$30 billion ($22 billion) in combined market value since the commission was announced in late November last year.
The report said the inquiry would probe further into whether commission remuneration structures for mortgage brokers and financial advisers — a pillar of the sector’s profitability — could actually serve customers properly.
“Should financial product sellers be permitted to provide financial advice ... at all?” the report said.
The final report could recommend major regulatory reform for banks, financial advisers, pension funds and insurers, as well as civil and criminal prosecutions.
In addition to the banks, wealth manager AMP Ltd. has taken a huge reputational hit due to the inquiry while the nation’s insurers have also come under fire.
Treasurer Josh Frydenberg said the report demonstrated a need for the corporate regulator, the Australian Securities and Investment Commission (ASIC), to do more to tackle misconduct in the troubled sector.
“They do need to pursue litigation, to impose the penalties that are available to them, rather than some of these negotiated settlements which have seen the perpetrators of these offenses or misconduct get off too lightly,” he said.
Australia’s center-right government late last year proposed new laws to increase penalties and lengthen prison terms for financial crimes in a bid to strengthen the regulator’s enforcement powers.
In particular, the inquiry found ASIC was too quick to negotiate settlements with banks following breaches.
“Much more often than not, when misconduct was revealed, little happened beyond apology from the entity, a drawn-out remediation program and protracted negotiation with ASIC of a media release, an infringement notice, or an enforceable undertaking that acknowledged no more than that ASIC had reasonable ‘concerns’ about the entity’s conduct,” the report said.
ASIC said in a statement on Friday that it would work toward building a system of tougher penalties.
Australian inquiry slams greedy banks and regulator for rampant misconduct
Australian inquiry slams greedy banks and regulator for rampant misconduct
- ‘There are no excuses for the behavior that has been exposed by the Royal Commission,’ said Anna Bligh, chief executive of the Australian Banking Association
- The big four banks have lost some A$30 billion in combined market value since the commission was announced in late November last year
Gold, silver, aluminum and coal gain as Middle East tensions stir supply concerns
RIYADH: Commodities such as aluminum, gold, coal, and silver have seen prices rise after US-Israeli strikes on Iran triggered supply chain concerns and prompted countries to consider shifting away from oil and gas.
Gold and silver rose on March 10, supported by a weaker US dollar and easing energy costs after US President Donald Trump suggested that the war in the Middle East could end soon, Reuters reported.
The increases have not been as dramatic as those seen on the oil markets, which saw the cost of barrel of Brent surpass $119 on March 9, before falling back below the $100 threshold the next day.
Abdulrahman Al-Sudairy, CEO of Vault Saudi, told Arab News: “Beyond oil and gas, gold is seeing the clearest safe-haven demand as Iran tensions escalate, with prices rising on investor rotation into traditional hedges.”
He added that the Strait of Hormuz is the critical chokepoint to watch, as any disruption threatens not just oil flows, but Qatari liquified natural gas exports and the ammonia and urea derivatives that feed global fertilizer markets.
“Shipping rates and insurance premiums in the tanker and LNG carrier segments are already reacting, serving as a real-time gauge of how seriously markets are pricing the risk of escalation,” Al-Sudairy said.
Vijay Valecha, chief investment officer at Century Financial, said that as of March 10, gold climbed 0.76 percent to $5,177, while silver surged 2.27 percent to $89.
“Signs that the US–Iran standoff may be moving toward a resolution sent oil sharply lower and softened the dollar, aiding the yellow metal after weeks of volatile, liquidity‐driven selling,” Valecha said.
He added that, impacted by geopolitical risk, higher oil prices and sticky inflation, gold prices have suffered from dwindling expectations for aggressive rate cuts, leading to exchange-traded fund outflows and investors selling gold to cover other positions in the equity market.
“The multi-year buying streak by central banks, led by China, has continued to underpin prices structurally as it remains firm in its role as an alternative to the dollar-based system,” Valecha said.
Similarly, aluminum prices surged to their highest level in nearly four years before erasing gains, as escalating conflict in the Middle East worsened supply prospects from the region, according to Al-Eqtisadiah.
The metal rose as much as 2.8 percent to $3,544 a tonne in London, its highest level since March 2022, before retreating to trade about $100 lower.
The spread between spot and three-month aluminum contracts closed at $47.40 a ton on March 6, also the widest level since 2022, indicating tight immediate supplies.
Aluminum had already jumped nearly 10 percent in the week ending March 6 after the conflict disrupted shipments from the Arabian Gulf, which accounts for about 9 percent of global supply.
Buyers in the US rushed to secure alternative shipments from Asia after at least two major smelters in the Middle East — one in Qatar and the other in Bahrain — were forced to suspend deliveries.
Copper and other industrial metals also declined due to reduced risk appetite.
Coal prices jumped to their highest level since November 2024 as military strikes continued in the Middle East, prompting countries around the world to consider shifting away from oil and gas tied to the region.
Newcastle coal futures, the Asian benchmark, climbed 9.3 percent to $150 a tonne on March 9, according to Al-Eqtisadiah.
This coincided with a surge in crude oil prices, which approached $120 a barrel after producers in the Arabian Gulf cut output.
An Iranian drone attack last week forced Qatar to shut down the world’s largest LNG export facility, which accounts for about 20 percent of global supply.
This prompted buyers to seek alternatives, with some importers, such as Taiwan, considering increasing reliance on coal-fired facilities if gas supply disruptions persist.
Gas prices have also risen, with natural gas prices in Europe jumping as much as 30 percent on March 9, while spot prices in Asia have doubled over the past week and remain elevated.
