What happened to all the promises of change from those ‘bastard’ banks?
In regional Australia, banks were once part of the backbone of the small communities but no longer. Now, the actions of one small bank could collapse the rural property market, writes Piers Akerman
Opinion
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Why the Australian Banking Association chose failed former Queensland Labor Premier Anna Bligh as its CEO two years ago says a lot about bankers.
Her behaviour in that important role says a lot more about Ms Bligh.
The banking industry was given a well-deserved shellacking by ex-judge Kenneth Hayne in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which lifted the lid on a reeking sewer of institutionalised scandalous misbehaviour.
The executive summary asked rhetorically “Why did it happen?”. And answered its own question thus: “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?”
“But it is necessary then to go behind the particular events and ask how and why they came about,” it said.
“Banks, and all financial services entities recognised that they sold services and products. Selling became their focus of attention. Too often it became the sole focus of attention.
“The conduct regulator, ASIC, rarely went to court to seek public denunciation of and punishment for misconduct. The prudential regulator, APRA, never went to court.”
“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.”
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Last week I met a farmer from North Queensland along with several other men who has experienced the worst the banks handed out.
I won’t name the bloke from up near Townsville but he had an album of photos with him which showed him shooting his cattle on dry plains. The only moisture was the tears in his eyes.
He then showed me a detailed letter he had written Ms Bligh about the conduct of the Rural Bank, now owned by Bendigo Bank (the one which laughably advertises “Your best interests at heart”). Not surprisingly, he hasn’t heard back from Ms Bligh — and next week he will be back in the courts as the bank tries to force him off his property, bankrupting him in the process.
After the Royal Commission report was released, Ms Bligh was everywhere echoing the nonsense spouted during the commission hearings by Rural Bank chief executive Alexandra Gartmann. The final report was handed to Governor-General Sir Peter Cosgrove on February 1. Three days later Ms Bligh issued a press release which included the following: “(B) banks have failed their customers and let down the public, banks accept full responsibility for these failings and know that they must now change to ensure that this never happens again.”
Check that Ms Bligh. The Rural Bank hasn’t changed. The problems aren’t being fixed and things certainly aren’t being made right.
In her evidence to the Commission, Ms Gartmann acknowledged district banking managers “had manipulated and suppressed information from the bank. part of the poor performance in that area was failure for our district banking managers to inform our credit team of the performance of individual farm businesses and their loans . and … appraisal values appearing to have been inflated to improve the security position of the exposures; there was suppression of information pertinent to the credit; deteriorating features were not reported to the Rural Bank in a timely manner.”
The failures are still continuing and they are still causing hurt, pain and suffering.
As the stretched farmer I met with has written to Ms Bligh: “there is no identifiable understanding and banks continue to exert their unequal power over cashflow poor banking victims.”
In regional Australia, banks once formed part of the backbone of the small communities but no longer.
The rural managers don’t understand the businesses of their customers.
Some appear unaware that much of Queensland and NSW has been in one of the nation’s cyclical droughts for most of the last decade.
If the small banks start foreclosing, the prices for properties will plummet.
The Big Four and Rabobank won’t appreciate that.
Unless Ms Bligh steps up, the actions of one small bank could collapse the rural property market.
People embrace stereotypes because there is generally more than a grain of truth reflected in the stereotype.
The stereotypical banker is still a greedy bastard. Commissioner Hayne was right. Ms Bligh, what are you doing about it?