Anna Bligh to enter witness box at royal commission

Australian Banking Association chief Anna Bligh is likely to give evidence as Kenneth Hayne’s royal commission resumes.

Australian Bankers Association CEO Anna Bligh. Picture Kym Smith

Australian Banking Association chief Anna Bligh is likely to give evidence in coming weeks as the Kenneth Hayne financial services royal commission kicks off its third round of hearings this morning.

Ms Bligh, who took charge of the Australian Banking Association early last year, has given a witness statement to the commission, suggesting she will likely be called to the hearings, which is set to examine lending to small and medium businesses.

Both access and the cost of ­finance is set to come under focus in the Melbourne hearings over the next two weeks.

A recent paper by Treasury into small business lending noted cost of finance for some businesses remained high since the global financial crisis due, in part, to “a less competitive market” than that for large business lending.

“Obtaining credit can also be an issue for certain types of small businesses,” the Treasury paper notes.

The business lending hearings will kick off with an outline by Phil Khoury, the former ASIC executive who reviewed the code of banking practice for Ms Bligh’s Australian Banking ­Association.

Westpac’s general manager for commercial banking, Alastair Welsh, will be the first banker in the witness stand over responsible lending, according to an initial scheduling list released by the royal commission on Friday. In addition, Commonwealth Bank chief risk officer David Cohen is expected to be called as a witness.

In examining banks, commissioner Kenneth Hayne has repeatedly shown he is only interested in the law as it relates to misconduct, and cases where bank behaviour has fallen short of community expectations.

The hearings into SME lending comes as bank regulator the Australian Prudential Regulation Authority is considering easing some of the high-risk weightings given to small business loans.

Small business advocates warn against further regulations on banks, saying lenders are ­already becoming more risk ­adverse in the commercial space.

Council of Small Business Australia CEO Peter Strong said many owners wanting to grow their small business find it hard to get finance, often having to use their homes as security for the loan.

“What we need to do is make sure that at the end of this royal commission they don’t make it harder for banks to give money out by making a new set of rules.”

He and other small business advocates argue against consumer regulations being extended to commercial lending because of fundamental differences, such as in-loan products, purposes, terms and pricing. “Businesses that want to grow but are considered high risk in theory won’t get any money at all.”

Additional reporting: AAP