D-day for Australian banks to publish their investigation report

SYDNEY (Reuters) – The Australian government is due to release on Monday the final recommendations of the independent investigation revealing the systemic wrongdoing in the Australian financial sector, which will likely lead to profound changes in the country's banking sector.

Major banks, insurers, pension funds and regulators overseeing the financial sector are preparing for a blunt summary of their misdeeds and weaknesses and a list of tough recommendations, including criminal prosecution.

The Royal Commission was an independent quasi-judicial body headed by a former high court, to which the government had initially reluctantly asked to investigate the financial sector's actions following a series of bank scandals. .

For 11 months, its public hearings shocked the country and swept more than 60 billion Australian dollars (43.4 billion dollars) of the main financial values ​​of the country, investors taking into account the prospect of a stricter regulation, higher compliance costs and lower margins.

The Commission's Bars also explained to regulators why they seemed reluctant to repress wrongdoing and closed the investigations with a simple press release.

"The recommendations will not be positive because the banks have clearly broken various laws and obligations in terms of customer service," said Matthew Wilson, a banking badyst at Deutsche Bank.

The Royal Commission can not directly order prosecutions or penalties. Instead, it will provide a list of recommendations that the government will need to consider.

In particular, badysts expect the survey to recommend stricter enforcement of responsible lending laws, the termination of some conflicting commissions to financial advisors, and limits on bonuses paid to executives.

His report will likely be suspended during an election campaign scheduled for May. The center-left Labor Party, which according to most polls will prevail, says it intends to adopt all the recommendations.

Conservative Prime Minister Scott Morrison, who initially rejected opposition calls to an investigation into the banking system, calling them "populist vexations," said he also planned to follow through on most recommendations.

But he warned against outbidding and reducing credit flows, a likely battle for the government as it fights for election survival.

DAMAGE CAUSED

Although the final report is released around 5:10 am GMT, the investigation has already kicked out executives and prompted billions of dollars in correction payments for customers.

The most affected company, in terms of staffing levels, is the financial planner AMP Ltd, which saw its CEO, president, chief counsel and three directors leave the board of its board for allegedly tampering with a report. independent to a regulator.

MPA shares more than halved, the largest decline among large institutions, amid concerns about retirees withdrawing funds from the 170-year-old company. The company, which denied committing a wrongdoing, issued a profit warning on Jan. 25.

The "Big Four" – Commonwealth Bank of Australia, Westpac Banking Corp., Australia and New Zealand Banking Group and National Australia Bank – and AMP have already pledged over A $ 2 billion to their aggrieved customers.

"What will the company look like in the future?" Said Sean Sequeira, chief investment officer at Alleron Investment Management.

"Will it simply act as a stock-like infrastructure without future growth, hindered by regulation? It's entirely possible.

(For a chart on "Australian Banks Performances", click on tmsnrt.rs/2SgBQUZ)