ANZ admits loan fee and rate hikes after Landmark takeover unfairly caused distress to farmers
ANZ lacked empathy and “caused distress” to farmers as it ramped up efforts to become an agribusiness lending powerhouse, the banking royal commission has heard.
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ANZ lacked empathy and “caused distress” to farmers as it ramped up efforts to become an agribusiness lending powerhouse, the banking royal commission has heard.
Internal documents also show the bank talked about making an extra $6 million by hiking rates and fees on loans it purchased through the takeover of the Landmark Financial Services company, the commission has heard.
CRIMINAL CARTEL CHARGES LAID AGAINST ANZ, DEUTSCHE, CITIGROUP
In the first day of the fourth round of public hearings yesterday, the commission heard desperate farmers hid from banks and refused to open mail as their financial situation worsened.
The latest round of hearings is probing financial issues affecting Australians in remote and regional communities.
Counsel assisting the commission Rowena Orr, QC, said ANZ thought it could become the second biggest agribusiness lender in the nation through its $2.2 billion acquisition of the Landmark loan book in 2010. But Ms Orr said the deal resulted in ANZ providing service to some customers it now admits “fell below community standards and expectations”.
Many former Landmark customers felt they were treated unfairly by ANZ, Ms Orr said.
ANZ had also said that, in a small number of cases, its conduct in dealing with former Landmark customers might have constituted a breach of the obligation in the Code of Banking Practice to act “fairly and reasonably” towards customers, Ms Orr noted.
“ANZ acknowledged that it should have been more responsive and empathetic to some former Landmark customers, particularly given their difficult financial circumstances, and it acknowledged that its failure to do so caused distress in some cases,” she said.
Ms Orr asked ANZ head of lending services Benjamin Steinberg if the bank saw an opportunity immediately to reprice many of the loans, with a $6 million benefit to the lender.
“I think that’s what the … the document says,” Mr Steinberg said. “The view at the time was that the Landmark book was potentially underpriced relative to the ANZ portfolio.
“And I believe what this is saying is that as a result of that, there is an opportunity to have a revenue uplift through repricing the Landmark portfolio.”
ANZ picked up 10,000 agribusiness customers through the Landmark acquisition.
Opening yesterday’s hearings, royal commissioner Kenneth Hayne, QC, took the unusual step of rejecting criticisms from some former Bankwest customers that his inquiry had devoted insufficient time to the Commonwealth Bank’s 2008 takeover of Bankwest.
Mr Hayne said a very considerable amount of research and analysis was devoted to the takeover by lawyers assisting the commission.
He said the premise that it was the commission’s role to advance the interests of Bankwest’s victims “misunderstands the role and the duty of a royal commissioner, which is to inquire, without fear or favour, into matters falling within the terms of reference”.
— with AAP
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