Recovery tops ABA’s Canberra agenda

CBA CEO and ABA chair Matt Comyn. Picture: Adam Yip

Australian Banking Association chairman Matt Comyn will attempt the highwire act of hosting the Treasurer and opposition Treasury spokesman at the same meeting of the ABA’s 16-member council in Canberra on Wednesday.

What could possibly go wrong?

Perhaps wisely, Comyn has separated his two visitors, with Frydenberg the marquee guest for dinner and Chalmers relegated to lunch.

Comyn and Frydenberg have developed a strong working relationship, which only deepened in the heat of battle against a menacing global pandemic.

While the two men are “tight”, according to some, the Commonwealth Bank boss also has a healthy respect for Chalmers.

The council meeting takes place at a pivotal moment.

First, it’s likely to coincide with the Senate’s consideration of controversial legislation to ease restrictions on responsible lending.

The more lenient regime proposed is designed to free up credit and support the economic recovery, but flies in the face of the Hayne royal commission’s birching of financial regulators over their failure to enforce the existing law.

More importantly, though, it’s now a year since the banking industry unveiled its deferred loan scheme, which peaked at $270bn in deferred housing and business loans.

On Tuesday, the ABA released updated figures for the month of February.

They showed borrowers have resumed repayments on 96.5 per cent of major bank deferred loans — a trend that will help to minimise the bad debt fallout from the imminent withdrawal of government assistance programs like JobKeeper.

Just 1.2 per cent of small business loans remain frozen and 5 per cent of housing loans.

On the books of the four majors, 0.2 per cent of all small business loans, 0.5 per cent of housing loans and 0.2 per cent of all loan facilities remain deferred.

Australians have marvelled at what can be achieved when governments, regulators and banks work cooperatively, and they want more of the same in the recovery phase.

“For many people, the crisis is not over, so the relationship with their banks is just as important in the economic recovery as in the crisis response,” ABA chief executive Anna Bligh told Four Pillars.

“People want to see the current bipartisan approach continue.”

Bligh said the industry’s priority was to support customers who remained in financial difficulty, particularly those affected by ongoing measures to contain COVID-19 such as border closures and social distancing. It was also important for credit to continue to flow as the nation’s economic momentum accelerated.

ANZ chief executive Shayne Elliott said over the weekend it was likely that gross domestic product had already returned to its pre-pandemic level of late 2019, much earlier than previously anticipated.

A further priority for the council meeting, as well as discussions with Mr Frydenberg, is cybersecurity.

While digital banking has surged, and 2 million more Australians completed their first digital transactions in 2020, the cyber threat is real and continues to evolve.

The ABA council has 16 members, including the chief executives of the big four banks.

With the pandemic mostly contained, at least for now, all except one of the members will attend the council meeting in person.

In 2020, quarterly meetings were conducted by videoconference.

Before that, Ms Bligh rotated one council meeting a year through other locations apart from Sydney and Melbourne, including Brisbane in 2018 and Bendigo, the home of Bendigo and Adelaide Bank, in 2019.

It’s the first time that the full council has met in Canberra.

Price right for Bendigo

John Price is the latest refugee from the Australian Securities & Investments Commission to find a new home in financial services, in his case as head of group regulatory compliance at Bendigo and Adelaide Bank.

Other departures include former deputy chairman and commissioner Peter Kell (Promontory Financial Group), ex-executive director financial services Michael Sadaat (Afterpay), and former head of corporate affairs Matthew Abbott (Zip).

Price, whose arrival at Bendigo last November seems to have passed completely unnoticed, was a 20-year veteran at ASIC, the last eight of which he served as a commissioner.

His remit included policymaking, fundraising, mergers and acquisitions, financial services and products, insolvency, the ASIC registry, and financial reporting and audit.

If there’s part of the conduct regulator which escaped his oversight or influence in the last two decades or so, it’s likely to have been an accident. Price was finally allowed to leave ASIC last June after two extensions to his contract.

Even then, he later returned as a consultant, working mainly on the huge task of transferring the registry to the Australian Taxation Office.

Meanwhile, back at his old shop, reinstated chairman James Shipton faces what is likely to be his final appearance on Friday before ASIC’s oversight committee, the parliamentary joint committee on corporations and financial services.

Shipton, who stepped aside as chairman pending an independent investigation of a row over his relocation expenses, was found to have done nothing wrong. He has returned to his position until Frydenberg picks a successor.

A full bench of ASIC commissioners is likely to be probed on the fiasco by Labor members of the PJC, with the regulator also to be hauled before estimates next week.

Since the committee last met, its then-chairman James Paterson has handed over to Andrew ­Wallace.