Hayne report a ‘turning point’ for banks: Westpac’s Brian Hartzer

Westpac chief executive Brian Hartzer has labelled Kenneth Hayne’s landmark final report a ‘turning point’ for the sector.

Westpac CEO Brian Hartzer. Picture: AAP

Westpac chief executive Brian Hartzer has labelled Kenneth Hayne’s landmark final report a “turning point” for the sector, as the industry committed to going back to the drawing board on aspects of its code of conduct.

The banks were still trawling through the Hayne report’s details last night to formulate detailed responses, while the report drew sharp criticism from mortgage brokers for calling for an end to commission payments.

Mr Hartzer said the final report was a “turning point” for the industry and that the bank would “engage constructively” in the reform process.

“Westpac has already taken steps to address some of the matters that are referred to in the report, including our approach to dealing with customer complaints and leading the industry in moving away from grandfathered commissions. The recommendations in the report will help us build on this progress,” he said.

Commonwealth Bank chief Matt Comyn said the group would “co-operate fully” with further regulatory investigations as it continued to review the contents of the report.

“We note that the commissioner has concluded that a number of matters regarding the group’s conduct including in relation to superannuation warrant further investigation by relevant regulators and we will co-operate fully,” Mr Comyn said.

ANZ boss Shayne Elliott said Mr Hayne’s recommendations marked a “defining moment” for the bank and the industry.

“It has been a humbling experience for me, our leaders and all our people — we have learnt from this and accepted responsibility for our failings,” Mr Elliott said.

Australian Banking Association chief Anna Bligh said the group had formed a taskforce to work through the Hayne royal commission’s recommendations that she said provided the “opportunity for banks to reset”.

Ms Bligh committed the ABA to revisiting the banking code of practice, which was called out by Mr Hayne as inadequate in several of his recommendations, including in its enforceability and definition of a small business.

“There is no stone that has been left unturned by commissioner Hayne,” she said, adding it included some “very tough medicine” for the banks.

Ms Bligh said the industry body would take some time to look at the recommendation that called for mortgage broker commissions to be abolished. CBA was supportive of that move during the hearings, while others including Macquarie said moving away from commissions was problematic.

Mortgage brokers came out swinging yesterday against the Hayne recommendations, saying a ban on commissions would harm the industry.

Finance Brokers Association of Australia managing director Peter White said the report “failed to understand the role of mortgage brokers and the competitiveness they bring to the market”.

“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.

Mr Hayne wants broker commissions scrapped altogether and for borrowers to pay an upfront fee to brokers, while the federal government is taking a slightly different view citing a need to retain competitive pressure.

Scottish Pacific CEO Peter Langham said the company had “real concerns” over the broking sector changes.