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Banking royal commission live: Hayne final report

Treasurer Josh Frydenberg has put regulator ASIC on notice, saying its timid approach needs to change.

Chris Jenkins
23 min read
12:26PMFebruary 04, 2019.
Updated 9:29PMFebruary 04, 2019
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Banking Royal Commission: What we know so far

Thanks for joining our live coverage of the unveiling of the final report of the The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Commissioner Hayne made 76 recommendations, and Treasurer Josh Frydenberg has said the government will adopt all of them.

Two Australian financial institutions will face criminal charges, while 10 companies will be referred for further investigation.

Commissioner Hayne also singled out NAB CEO Andrew Thorburn and chair Ken Henry for particular criticism.

Be sure to join us again on Tuesday morning as The Australia’s leading coverage of the Hayne royal commission and its fallout throughout the banking and finance sector continues.

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9.00pm: Banking misdeeds ‘hidden in plain sight’

Rebecca Weisser has told Chris Kenny’s Sky program that complacency allowed the banks and other financial institutions to get away with acting improperly.

She said regulatory inaction was largely to blame to the culture that was allowed to develop within the industry.

8.41pm: Hayne effect will last for years: Hartzer

Westpac CEO Brian Hartzer outside the royal commission’s hearings in Sydney. Picture: AAP
Westpac CEO Brian Hartzer outside the royal commission’s hearings in Sydney. Picture: AAP

Westpac CEO Brian Hartzer says the findings of the Hayne royal commission will guide the finance sector for years to come.

In a late ASX announcement, he said the inquiry represented a turning point for the industry.

“The Royal Commission has been a confronting, thorough and important process.

“Westpac has already taken steps to address some of the matters that are referred to in the

report,” he said, saying the bank would consider the recommendation more fully.

“We will continue to engage constructively in the reform process and … will work with policy makers and regulators, he said.

“Our focus remains on learning from the mistakes of the past and preventing them from happening again,” Mr Hartzer said.

8.30pm: Unions decry royal commission

The trade union movement has rejected the Hayne commission’s findings as “wholly inadequate,” saying they represent a missed opportunity.

8.15pm: Frydenberg puts timid ASIC put on notice

Treasurer Josh Frydenberg has told ABC’s 730 that the Hayne royal commission report builds on previous work by the Murray inquiry and the Productivity Commission.

The question over whether “heads should roll” over the commission’s findings ultimately sits with boards and shareholders, and one they needed to consider seriously he told host Leigh Sales.

Commissioner Hayne had referred more than case to ASIC and APRA for investigation, he said.

Mr Frydenberg refused to be drawn on the issue of Commissioner Hayne singling out NAB’s CEO Andrew Thorburn and chair Ken Henry for particular criticism, but said that they would be answerable to the NAB board and its shareholders.

But he agreed the commissioner had found regulators APRA and ASIC wanting.

ASIC, in particular, had needed to change its approach, he said.

“The expectation is that the timidity that we have seen in the past does not continue into the future, and I am confident that will be the case,” Mr Frydenberg said.

“I think ASIC has got the message,” he said.

Melissa Yeo 7.12pm: Advice costs to skyrocket, says Lifespan

Fewer people will be able to afford advice under the commissioner’s proposal to axe trailing commissions, according to Lifespan Financial Planning chief Eugene Ardino.

In a statement, Mr Ardino said he expected the up-front cost of advice to increase dramatically.

He estimated the real price of advice at as much as $14,000, compared to the current fees to customers of between $2000 and $4000.

“Advisers are prepared to initially service clients at a massive loss because of the possibility of an ongoing relationship with the client on a retainer basis with an ongoing fee arrangement,” he said.

“There is no way you can do a full and comprehensive review of a new client’s situation and future needs, go through the entire research and advice process through to implementation in less than 25 to 35 hours.

“If you consider a reasonable hourly rate to be $250-$400, then the real price for this advice ranges from about $6,000-$14,000.”

Samantha Bailey 7.09pm: Hayne will shape our agenda: ASIC

The Australian Securities and Investments Commission said it will release a statement in coming weeks outlining the actions already underway as well as further steps it will implement to strengthen its governance, culture and practices.

“ASIC notes the serious matters referred by the Royal Commission of possible breaches of financial services laws. Consideration of these matters will be prioritised. ASIC does not, as a general policy, comment on actual or potential investigations,” chairman James Shipton said in a brief note on the publication of the report.

“ASIC looks forward to working with the parliament, the Government, APRA and other regulators to implement the reform agenda to ensure a fair, strong and efficient financial system for all Australians,” he said.

“ASIC will consider the report carefully, particularly its recommendations on regulatory and enforcement practices.

“These recommendations, and the Government’s response, will inform ASIC’s priorities and strategic direction moving forward.”

Samantha Bailey 7.03pm: Hayne a ‘line in the sand’, says BCA

Business Council of Australia chief executive Jennifer Westacott says the association looks forward to working with the government and regulators to ensure the country’s financial system remains a strong part of the Australian economy, serving the interests of all Australians.

“It is time to rule a line in the sand and start fixing the real problems and poor behaviour that have been identified by the royal commission,” she said.

“The business community is ready to work to effectively develop and implement necessary changes in the direction recommended by Commissioner Hayne.”

Ms Westacott said that Mr Hayne had done an excellent job and highlighted the changes the sector had already made ahead of the release of the final report.

“We welcome Commissioner Hayne’s recommendation on business culture and governance and believe every business should take his advice to implement the proper steps to assess, identify and deal with any problems,” she said.

“Effective regulation and well-resourced regulators are critical to the financial sector and Commissioner Hayne identifies some important improvements, in particular simplifying existing laws, clarifying the responsibilities of ASIC and APRA and strengthening their accountability.”

Melissa Yeo 6.59pm: AICD backs Hayne’s view

The Australian Institute of Company Directors has backed Hayne’s findings on governance, saying boards cannot involve themselves in the day-to-day operations but need to be willing and able to challenge management.

In a number of tweets, the group highlights passages from Hayne’s report — in particular the duties of directors in balancing the rights of shareholders and customers and the differentiation of the board and management:

“It is not right to treat the interests of shareholders and customers as opposed … But that opposition will almost always be founded in differences between a short term and a longer-term view of prospects and events.”

6.50pm: CBA says royal commission ‘valuable’

Commonwealth Bank CEO Matt Coymn during the royal commission’s hearings in Sydney in November. Picture: AAP
Commonwealth Bank CEO Matt Coymn during the royal commission’s hearings in Sydney in November. Picture: AAP

Commonwealth Bank has issued a statement from CEO Matt Comyn in response to the royal commission’s findings.

“The government has announced a comprehensive set of measures in response and we will work through the impact of these over the next few days,” he says in the statement.

“We note that the Commissioner has concluded that a number of matters regarding the [CBA] Group’s conduct including in relation to superannuation warrant further investigation by relevant regulators and we will co-operate fully with these investigations.

“We will update the market as appropriate, noting that we will release our half year results on Wednesday,” Comyn says.

The royal commission “has been a thorough and valuable process for everyone”, he says, saying “CBA will be a better bank as a result”.

Ben Wilmot 6.37pm Don’t break economy to fix banks, says PCA

The Property Council of Australia has issued a blunt warning in the wake of the banking royal commission saying that it was important “not to break the economy” as policy makers set about fixing the banks.

“On first blush, the government’s response seems to strike the right balance,” PCA chief executive Ken Morrison said.

He said the overhaul proposed for the mortgage broking industry could have important consequences for the residential property industry.

Mr Morrison said the abolition of trail commissions and proposed shift to a borrower pays model for broker commissions would need to be “very carefully managed” so that it was not made harder for qualified borrowers to find and secure competitive finance.

“The proposed alignment of the regulatory framework for mortgage brokers with that of financial advisers may also impact on the future structure of the industry and access to finance,” he said, adding the residential property cycle was in an “uncertain” state.

Ben Wilmot 6.33pm: Care needed on lending, says Stockland

The head of the country’s largest listed residential developer, Stockland chief executive Mark Steinert, said it was now critical for financial institutions to prioritise actions that restored integrity to the system.

He pointed to the importance of credit in the Australian economy, saying a strong, stable and well-functioning financial system was vital for the near $7 trillion property industry.

Mr Steinert said policy makers and financial institutions must ensure responsible access to credit for first home buyers, owner occupiers and investors who contributed to the supply of rental properties.

“This will help ensure the resilience of our housing market and maintain its significant contribution to thriving community development across Australia, and to the broader economy,” he said.

However, he cautioned about measures that could hit the housing market.

“Any further regulation of lending requirements should be carefully considered in the context of the current market conditions and ensuring the efficient and sustainable operation of our economy,” Mr Steinert said.

Melissa Yeo 6.27pm Brokers deeply unhappy

The Finance Brokers Association has slammed findings from the royal commission, saying it had failed to understand the role brokers play in the industry and could ultimately push up interest rates.

Peter White, managing director of the Finance Brokers Association of Australia.
Peter White, managing director of the Finance Brokers Association of Australia.

In a statement, managing director Peter White said the changes could put further pressure on housing affordability.

“This could force upfront commissions to rise in order to compensate for reduced revenues to brokerages, which in turn will lift interest rates and make housing affordability more difficult,” he said.

“Commissioner Hayne wants to hand even more power to the big banks and eliminate competition, which is a ridiculous scenario and shows just how out of touch he is when it comes to brokers.”

He added that most borrowers wouldn’t pay if the impetus was on them to cover fees, and standards would drop further.

“It’s very disappointing that the royal commission wants to destroy some 20,000 small businesses for the monetary gain of the big banks, and we trust the Government will see clearly on this and continue to work extensively with our industry to improve consumer outcomes.”

Melissa Yeo 6.22pm: Some changes ‘radical’, says ABA

Australian Banking Association head Anna Bligh has urged the Australian public to give banks a chance to reset their relationships, but says there are some radical suggestions which will need more consideration.

Speaking to media, Ms Bligh said banks were determined to improve:

“I can understand, given the circumstances, that some people are cynical about whether banks will change. To those people, I say don’t judge banks by their words, judge them by their actions in the coming weeks and coming months as they implement this report.”

But she said the shake-up to mortgage broking would be a point of contention

“There are some recommendations that we would like to take the time to look at in more depth to make sure that they are in the best interest of customers and one of those is in the area of changes to mortgage broking payments,” Ms Bligh said.

“I think the commissioner has been very concerned to make sure that we minimise conflicts between how mortgage brokers are rewarded and the best outcomes for customers but I think there are some very radical suggestions here that need some very careful thinking before they are rushed into.”

Samantha Bailey 6.17pm ‘A mild positive’

Bell Direct equity analyst Julia Lee described elements in the report as a “mild positive” for the banks, saying that the phasing out of commissions to mortgage brokers and a five-year review on vertical integration wasn’t likely to have a significant effect on the share prices of the major banks.

“For the time being, it looks like the major changes will be on the advice industry and the way it charges fees as well as mortgage brokers,” she told The Australian.

“I think the banks have already moved away from vertical integration so the fact that it hasn’t stopped vertical integration, they are going to revisit it every five years, I think is a positive.”

6.12pm: Government’s full response published

The government has published its full response to the Hayne commission’s findings.

“The Government is confident that the actions announced today will put in place the legislative framework necessary, providing the regulators with the powers and the resources to hold those who abuse our trust to account. In doing so the community’s trust in our financial sector can and will be restored,” Treasurer Josh Frydenberg says in his foreword.

You can read the full response here.

Samantha Bailey 6.05pm ‘We’re all losers’

CMC Markets chief market strategist Michael McCarthy.
CMC Markets chief market strategist Michael McCarthy.

CMC Markets’ chief market strategist Michael McCarthy calls the Hayne recommendations “sweeping and scathing”.

“I think a lot of people were looking for heads on stakes here and I think Mr Hayne has rightfully shown some restraint there. He’s leaving that up to the regulators and authorities, to determine who’s guilty and who’s not, and what the penalties should be. But nonetheless, this is a new game from tomorrow, for every financial institution,” he told The Australian.

“While it’s almost certain that many of the fringe players will come under extreme pressure, which could result in a number of them going out of business, there will be sweeping reforms to the structure of businesses and the move towards indirect commissions will change the financial landscape for everyone including all customers,” he said.

“This is a very big change.

“I think in the broader public mind there might be some concerns that this hasn’t gone far enough but I think Mr Hayne and his team have proven themselves to be very steady hands and they understand the complications here.”

McCarthy says the recommendations will mean lower pay-packets for those in the financial industry as well as higher prices for customers, and will mean lower returns for shareholders.

“Nobody’s got anything to cheer about here. This is going to be a sweeping reform, and in particular, requirements for the need to review commissions annually, simply mean more leg work and that means more time spent on things and that means more costs for customers,” he said.

“Unfortunately, we are all losers out of this.”

He said that across the sector we are likely to see different share price reactions in Tuesday’s session but predicted that the big four banks would rally.

He also said that pure plays — individual fund managers or brokers — were likely to find support because their uncomplicated business models are less likely to be affected.

He pointed to a recommendation that would mean farmers are not charged interest on loans during droughts, warning that it could mean significantly higher risk for the banks, depending on how the policy would be enforced.

“Good luck getting a loan if you’re a farmer, if the banks know should a drought appear, they’ve got the risk,” Mr McCarthy said.

“We’re still trying to work out what’s meant by that … if it’s actually an interest holiday, it’s very unlikely any of the banks will want to be in the business of lending to farmers.”

Joyce Moullakis 5.57pm: Banks to rally, wealth to slide

Responding to the sweeping recommendations in the Hayne royal commission, Tribeca Investment Partners portfolio manager Jun Bei Liu said she expects bank stocks to rally on Tuesday, but wealth stocks including IOOF are likely to be hit by investor selling.

Wealth and advice firms will be in the crosshairs of investors because of a flagged ban on grandfathered commissions.

“The main thing for the financial advice industry is the removal of grandfathered commissions, which is quite meaningful,” she said, noting IOOF would take a large hit. “Share prices will react very quickly, the companies will have to work out what they are want to do.”

The Hayne final report called for grandfathered commissions paid to advisers to be scrapped as soon as practicable, and the federal government has said it agrees but has only committed to a ban starting in January 2021.

5.53pm: NAB acknowledges report, but says little

NAB chairman Ken Henry leaving the banking royal commission’s hearings in Melbourne.
NAB chairman Ken Henry leaving the banking royal commission’s hearings in Melbourne.

NAB is the first of the big four banks to issue a response to the royal commission’s findings, but has had little to say.

NAB’s CEO Andrew Thorburn and chair Ken Henry were taken to task by Commissioner Hayne in his final report.

“NAB also stands apart from the other three major banks,” he wrote. “Having heard from both the CEO Mr Thorburn, and the chair Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learned.”

NAB’s response was muted.

“NAB will now review the report, which contains 76 recommendations, and the Government’s response to fully understand the implications for the NAB Group,” the bank said in a statement to the ASX.

Melissa Yeo 5.42pm: ‘Not the last word’

A newly created consumer group concerned with superannuation says the findings from the royal commission don’t go as deep as previous reviews and need to be read in tandem with earlier reviews

“The royal commission report is not the final word on superannuation,” head of advocacy at the Superannuation Consumers’ Centre Xavier O’Halloran said in a statement.

“The Productivity Commission’s three-year review went much deeper and wider. If we are going to address the biggest problem in superannuation, that of poor fund performance, we need to improve the default system as a whole.”

The body was established last August thanks to money from enforceable undertakings from ANZ and Commonwealth Bank for the mis-selling of superannuation.

Melissa Yeo 5.36pm: ‘Damning indictment’, says Choice

Consumer group CHOICE has added its voice to the criticism against the banking sector, saying the royal commission report was a “damning indictment of industry self-regulation”.

“For too long, we have allowed banks to write and enforce their own rules,” chief Alan Kirkland said in a statement.

“Commissioner Hayne makes it clear that if we are going to have industry codes, they have to have the force of law, with sanctions where they are breached.”

The group pulled out six key reforms it said should be implemented as a matter of urgency, including a ban on hawking financial products, an obligation that mortgage brokers act in their clients best interests, and an end to hidden fees for financial advice.

“This time we can’t let industry persuade parliamentarians to water the law down,” Mr Kirkland said.

Michael Roddan 5.25pm: Big changes for default super

The $2.7 trillion superannuation sector will undergo a radical transformation after the government backed a royal commission recommendation to overhaul the current industrial relations-linked process for creating super accounts, which has resulted in the proliferation of 10 million fee-draining unintended multiple accounts.

The adoption of the recommendation puts the Morrison government on a collision course with Bill Shorten, as the current industrial award process for nominating superannuation accounts for new workers overwhelmingly favours the union-and-employee-backed industry fund sector.

Kenneth Hayne has also put the corporate regulator on notice to better guard over members’ best interests when super funds of any stripe are appointing board directors. It potentially pushed the so-called “equal representation model” — where unions and employer groups nominate officials to govern super funds — into the historical dustbin, as directors will have to be chosen for their skill set, rather than because of their nominating body or the history of the super fund.

Requirements that directors always act in the best interests of members will be beefed up with enforceable civil penalties, after the government backed the proposal to give the legal requirement teeth, the lack of which has hamstrung financial regulators from properly pursuing failures across the industry for decades.

Read more

5.19pm: Industry super response

The association representing industry super funds, which came through the royal commission’s hearings relatively unscathed, has posted its response to Hayne’s findings.

David Rogers 5.15pm Investors show relief

Investors appeared to be relieved about some aspects of the commission’s recommendations as share price index futures rose at the start of overnight trading.

S&P/ASX 200 futures were up 0.9 per cent at 5853.3 points at 5.15pm after rising 0.6 per cent to 5837 during the local session.

5.00pm: Report available to public

Those wishing to read Commissioner Hayne’s final report for themselves can now download it from the royal commission’s website.

A limited number of hard copies are also available on request the commission said in a note to media.

John Durie 4.53pm: Structural shake-up falls short

Kenneth Hayne has laid down a comprehensive blueprint for a regulatory and cultural overhaul of the financial services sector but stopped short of the structural revolution many were expecting.

He has referred at least three cases to ASIC for potential criminal charges over the fee for no service scandal and noted the option remained to take more actions if the corporate cop recommended.

The Government has rejected calls for an overhaul of the mortgage broker regime to give consumers the power to pay fees while stopping all trailing commission.

Treasurer Josh Frydenberg has instead accepted advice from the Productivity Commission and the Murray review on competition grounds which means banks will pay the upfront fee for at least three years pending further reviews.

This is subject to how the industry responds to new requirements to comply with best interest duties on loan referrals.

Westpac was the only major financial institution which has avoided any further scrutiny in a report which included 19 separate referrals covering some 24 different civil or criminal offences.

Hayne was scathing about National Australia Bank chair Ken Henry and chief executive Andrew Thorburn saying “I am not as confident as I would wish to be that the lessons of the past have been learned.

Read more analysis from John Durie.

4.45pm: ‘Change forever’: Frydenberg

Treasurer Josh Frydenberg. Picture Kym Smith
Treasurer Josh Frydenberg. Picture Kym Smith

Consumers and small business ripped off by financial firms will benefit from an industry funded compensation scheme, while a new oversight authority will better hold financial regulators to account under the government’s response to the banking royal commission.

The Morrison government has agreed to act on all of the 76 recommendations made by Kenneth Hayne’s royal commission with Treasurer Josh Frydenberg saying action would be taken to restore trust in the financial system while maintaining access to credit.

“My message to the financial sector is that misconduct must end and the interests of consumers must now come first. From today the sector must change, and change forever,” Mr Frydenberg said.

Under the proposed shake-up, the government would expand the jurisdiction of the Federal Court to fast-track the consideration of corporate criminal misconduct in cases brought by regulators, ensuring they are not delayed by heavy backlogs.

In a major industry shake-up, the government has also agreed to prohibit the payment of trail commissions from lenders to mortgage brokers for new loans made from July 1 2020.

The move will mean that a key source of remuneration for mortgage brokers will be abolished, forcing them to generate more business from upfront fees.

But the government stopped short of endorsing commissioner Hayne’s recommendation that borrowers pay the cost of mortgage broking upfront, saying it would review that recommendation within three years.

Read more from Joe Kelly and Ben Packham

Joyce Moullakis 4.33pm: NAB stands apart

National Australia Bank has copped a Hayne royal commission battering with chairman Ken Henry and chief executive Andrew Thorburn lambasted for not accepting “necessary responsibility”.

Commissioner Kenneth Hayne singled NAB out for special attention in his final report, saying he feared there may be a “wide gap” between the public face of the bank and what it does in practice.

“NAB also stands apart from the other three major banks,” the report said. “Having heard from both the CEO Mr Thorburn, and the chair Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learned.

“I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly.”

Hayne’s revelations will add to existing pressure on the tenure of NAB’s chairman and CEO after a number of scandals at the bank including charging fees for no service and rampant misconduct in its mortgage introducer program.

Read more

Ben Butler 4.25pm: Hayne recommends charges

Financial services royal commissioner Kenneth Hayne has recommended criminal charges that carry a maximum fine of $9.45m against two institutions — but has not named them in his final report today.

The potential dishonesty charges are among findings contained in Mr Hayne’s final report, released this afternoon, that also include referring 19 further breaches of the law by companies including Commonwealth Bank, NAB, ANZ, AMP and IOOF to authorities for further investigation.

Mr Hayne also:

  • Delivered a stinging rebuke to National Australia Bank, its chairman Ken Henry and chief executive Andrew Thorburn over the bank’s poor conduct;
  • Recommended an end to the rivers of gold flowing to mortgage brokers and financial planners;
  • Proposed making mortgage brokers act in the best interests of clients, in the same way as financial advisers are supposed to;
  • Called for an overhaul of the regulatory system, with the Banking Executive Accountability Regime, which covers executive pay, to be extended to cover the entire financial services sector;
  • Said loans might be harder to get as banks step up scrutiny of customers;
  • Stopped short of demanding a ban on big banks both making and selling financial products — vertical integration — saying such a move would be “both costly and disruptive”
  • Made 76 recommendations covering legal and other changes to strength the banking system

Mr Hayne said NAB “stands apart from the other three major banks”.

Read our full report

Melissa Yeo 3.05pm: Investors shrugging off Hayne

Shares in the major banks are tracking higher in afternoon trade, just an hour out from the release of the royal commission findings, helping edge the ASX higher.

After their early stumble, the big four banks are solidly higher, Westpac leading the charge with a 1.2 per cent jump to $24.88.

NAB shares aren’t far behind — up 1.14pc to $24 while ANZ is up 0.92pc and CBA is curbing its earlier 0.95pc jump to trade 0.69pc higher at $70.24.

Meanwhile, AMP has pushed its losses out to 3.12pc while IOOF is down by 4.31pc.

2.34pm: Reset needed: ABA’s Bligh

Anna Bligh, CEO, Australian Banking Association Picture: Britta Campion
Anna Bligh, CEO, Australian Banking Association Picture: Britta Campion

Australian banks admit to failing customers and have vowed to “reset” their industry, as they bracedfor the release of the crunch Hayne report

“Banks know they have failed their customers and not lived up to the high standards Australians rightly expect of the industry,” Australian Banking Association chief executive Anna Bligh said in a statement.

“We do know this an opportunity to reset the industry and to make things better for our customers,” the former Queensland premier said.

The inquiry’s interim report in September slammed banks and their executives for their greed and for failing to meet “basic standards of honesty”.

The final report is expected to go further, potentially recommending wide-ranging legislative and regulatory changes, a crackdown on incentives and pay packages, and criminal charges against senior executives and banks.

AFP

2.05pm: Abbott: Punish bankers, not system

Tony Abbott on 2GB radio. Picture: Supplied
Tony Abbott on 2GB radio. Picture: Supplied

Individual bankers who have done the wrong thing should be punished but Australia doesn’t need its system “gummed up” with excessive regulation, Tony Abbott is warning.

Mr Abbott said the inquiry had exposed horrific conduct by banks and their staff and that should not go unpunished.

But that didn’t mean the whole system was rotten, he added.

“In this era when no one ever takes personal responsibility for anything, when something goes wrong we assume it’s a systemic fault as opposed to an individual’s fault,” he told 2GB’s Ray Hadley.

Meanwhile, Opposition Leader Bill Shorten says he feels vindicated in having pushed for more than two years for the commission to take place.

“The victims and consumers and people who believe in having an honest and ethical banking sector, we’ll keep being in their corner and we’ll make sure this government does not backslide on the banks,” he told reporters in Tasmania. “It’s a day of reckoning for the banks and financial institutions who have abused the trust of literally thousands of their customers.” Labor’s financial services spokeswoman Claire O’Neil says an apology from the banks won’t cut it.

AAP

1.55pm: IOOF deal under cloud

As the banking and financial services sector prepares for the Hayne royal commission report to be made public today, deal-makers are nervously waiting to assess the impact the findings could have on corporate transactions, Dataroom reports.

The deal being closely watched is IOOF’s agreement to buy ANZ’s OnePath business, which has been in the works for more than a year.

The unprecedented decision by APRA to pursue IOOF chief executive Chris Kelaher, chairman George Venardos, chief financial officer David Coulter, company secretary Paul Vine and general counsel Gary Riordan is still playing out with the case due to be heard in the Federal Court in July.

To that extent, it’s not surprising there is speculation that the OnePath acquisition won’t go ahead. The question is whether ANZ can find another buyer at the price it wants.

John Durie 12.49pm Lip service not enough

Columnist John Durie says the only thing that really counts for the Hayne report is the banking industry’s reaction.

Big business tends to be pretty good at lip service, but falls down when it comes to real change, he says.

“The bit big business has failed to handle is actual accountability, holding people responsible for what has gone right and wrong.

“Having failed, the banks will now find out what Hayne thought should have happened.

This means potential criminal action against senior bankers which in turn will fast forward cultural change.

“ASIC and APRA have clearly failed by not holding the institutions responsible and some sort of review mechanism should now be established.”

Ultimately, the government is also responsible for these failures and it is extraordinary that more than three years after agreeing with David Murray’s FSI recommendations, including an external review of APRA, nothing has been done.

12.28pm: What are the bank CEOs doing today?

It’s a massive day for Australia’s big four banks, and you’d imagine that their CEOs are bunkered down with armies of advisers, waiting for the report to land.

Not so, apparently, at least for the two Melbourne-based banks.

Samantha Bailey reports ANZ chief executive Shayne Elliot has hit the streets of Melbourne to sell copies of street magazine The Big Issue.

It comes as part of The Big Issue’s CEO selling event, which will see banking execs from Westpac, Bank of Melbourne, Bank Australia and ME Bank becoming Big Issue vendors.

NAB Acting CEO Gary Lennon will also join the cause, selling issues on Monday next week. Remember NAB chief executive Andrew Thorburn has taken a period of extended leave through January and February.

No word yet on how CBA’s Matt Comyn and Westpac’s Brian Hartzer will be spending the day, but ASIC’s broadside this morning would trumped whatever plans Comyn had.

12.21pm: Clarity key, says Murray

AMP chairman David Murray. Picture: Hollie Adams
AMP chairman David Murray. Picture: Hollie Adams

Having run CBA and his own financial industry inquiry for the federal government, AMP chair David Murray has a somewhat unique perspective from which to analyse today’s events.

“Agencies like ASIC will have to enforce the law, and the industry will have to adapt to compliance on a genuine basis — not compliance for the sake of it,” Murray told Michael Roddan and Ben Butler.

For the industry, clarity will be key, Murray says.

“If it’s a good report, it will be clear to everyone what they have to do.”

Read the full report here.

Melissa Yeo 12.00pm: Bank shares lift

Someone obviously thinks bank shares are cheap enough to withstand whatever comes out of the Royal Commission final report today.

The majors banks have reversed early falls, jumping 1.5-2.0 per cent, driving the S & P/ASX 200 up 0.5pc to 5894 after an early dip to a 6-day low of 5848.

Follow the movements with Melissa Yeo and David Rogers over on Trading Day.

11.55am: ASIC rebuke for CBA

Commonwealth Bank’s financial planning business has been ordered to immediately cease charging service fees from its customers and not enter into any new ongoing service arrangements.

The order by the financial services regulator comes after Commonwealth Financial Planning Limited failed to meet the requirements of an enforceable undertaking struck with ASIC in April 2018 in relation to fee-for-no-service conduct.

The stinging rebuke by ASIC — on the day the Hayne royal commission’s final report becomes public — hits CBA on many fronts.

Samantha Bailey and Joyce Moullakis have more here.

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SAMANTHA BAILEY, JOYCE MOULLAKIS

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Original URL: https://www.theaustralian.com.au/business/banking-royal-commission/banking-royal-commission-live-hayne-final-report/news-story/91af88ad70e2884d21286089da27d81a