As the Australian investors are aware, the final report from The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was very much awaited as this report has the potential to influence the broader financial sector. Also, the market players were keen to understand that what impact could this report have on the banking sector. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has appointed Honourable Kenneth Madison Hayne AC QC as Commissioner with the objective of conducting inquiry on the misconduct of which was witnessed primarily in the banking sector. The commission was incorporated on 14 December 2017 by the Governor-General of the Commonwealth of Australia. The market players which are regularly tracking the Australian banking sector were eagerly waiting for the final report from The Royal Commission as they wanted to know how this report could influence the big four banks (i.e. Westpac Banking Corporation, National Australia Bank Limited, Commonwealth Bank of Australia, and Australia and New Zealand Banking Group Limited). Therefore, The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry had played a very crucial role and Westpac had even stated that the recommendations which were developed via the significant inquiry would be guiding the decision making in the financial services for the years to come.
One of these banks had also mentioned the regulatory challenge as one of the challenges which they have faced. Westpac Banking Corporation had stated that FY 2018 was a difficult year. The challenges which the bank had stated that were Royal Commission/regulatory actions, higher cost of funds as well as full year impact of the bank levy, customer remediation as well as slowing system credit growth. Moreover, the banks might have lost the trust of their customers which might impact the banks’ long-term performance. Therefore, the final report from The Royal Commission was a very crucial report for the industry as a whole. The regulatory pressures on any company or on any industry have the potential to significantly disrupt the long-term growth prospects and, sometimes, these pressures can create serious troubles for the specific company. Sometimes the regulators can impose severe penalties which could create the negative picture of the company in the minds of the market participants. Also, the customers of that specific company might not do business with them.
Westpac Banking Corporation had also stated that they would be working with the policymakers as well as regulators. The bank added that its focus remains on learning from mistakes which have been made in the past and preventing them from happening again. However, Australia and New Zealand Banking Group Limited is of the view that the final report, as well as insights arising from the regulatory body ( The Royal Commission), would be changing the industry for the better. Therefore, it can be said that the final report of The Royal Commission is of utmost importance for the broader financial industry.
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