ANZ Banking Group has admitted several instances of misconduct and "conduct falling below community standards" with its agricultural customers, the banking royal commission has heard.

In her opening remarks for the fourth round of royal commission hearings, senior counsel assisting Rowena Orr QC said ANZ acknowledged in a "small number of cases" its conduct to former customers of Landmark, whose loan book it bought in 2010, may have breached the Code of Banking Practice to act fairly and reasonably towards its customers.

Senior counsel assisting Rowena Orr QC said ANZ acknowledged its behaviour caused distress in some cases.

Senior counsel assisting Rowena Orr QC said ANZ acknowledged its behaviour caused distress in some cases.

Photo: Supplied

"ANZ acknowledged that it should have been more responsive and empathetic to some former Landmark customers, particularly given their difficult financial circumstances and it acknowledged that its failure to do so caused distress in some cases," she said.

Ms Orr said Bendigo Bank had identified an example at Rural Bank where a customer complained her signature had been forged by her husband and improperly witnessed by an employee of the bank. Rural Bank told the customer to report the matter to police but the bank did not investigate the matter itself.

Rural Bank also erroneously charged fees on season overdraft and agri manager products, affecting 2164 customers, with an impact of $163,461, with all customers remediated, Ms Orr said.

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NAB admitted failing to pay interest on customer accounts, and 85 events of misconduct concerning agricultural clients since 2013, she added.

Rabobank identified issues with conduct of three employees; one of whom had amended documents after they had been executed by a customer on more than one occasion, one of whom failed to disclose a conflict of interest with a customer; and one of whom had entered into personal commercial arrangements with customers that were not disclosed to the bank.

Less than 4 per cent – or 268 submissions – of the 6892 submissions received by the commission related to agricultural finance. Of those, 32 related to the ANZ aquisition of Landmark in 2010.

Ms Orr said submissions argued banks initiated a non-monetary default through a revaluation of property or security assets, which altered loan to value ratios.

It was alleged banks then relied on deteriorated loan-to-value ratios to trigger non-monetary defaults, with customers being given "unreasonably short time frames" to repay substantial amounts of their loans. Allegations were also made about failures to take into account the impact of seasonal productivity and drought, and changes to interest rates.

Over the next fortnight, there will be five case studies on agricultural business lending, four on natural disaster insurance and four regarding Indigenous people in regional and remote communities.

Ms Orr said the Queensland cattle industry, in particular, had confronted many difficult circumstances that placed many farmers under financial pressure and led to disputes with banks.

Ms Orr said the Queensland cattle industry, in particular, had confronted many difficult circumstances that placed many farmers under financial pressure and led to disputes with banks.

Photo: Tamara Voninski

Ms Orr said the Queensland cattle industry, in particular, had confronted many difficult circumstances, including pests and adverse climate conditions, that placed many farmers under financial pressure and led to disputes with banks.

Farmers hurt by the 2011 ban on the live export of cattle to Indonesia will also give evidence at the commission.

"Because export trade is regulated by at least two governments of Australia and of the receiving nation, farmers are subject to regulatory risk arising from changes to the rules governing export and import generally, or to the rules governing the export or import of a particular product," Ms Orr said.

Natural disaster insurance and Tropical Cyclone Debbie, which slammed into north Queensland in March 2017, will be probed over the fortnight.

As of June 30 last year, total rural debt was $71.7 billion. The share of rural debt held by banks has increased over the past decade, from 89 per cent in 2007 to 96 per cent as at June 30 last year.

As at June 2016, more than two-thirds of aggregate broad acre debt was held by 12 per cent of farms, with these farms producing about half of the value of broad acre farm production. Broad acre farm debt averaged $616,900 per farm.

At the start of Monday's hearings in Brisbane, commissioner Kenneth Hayne moved to dispel several "misconceptions", including arguments for more time to be devoted to the investigation of Commonwealth Bank's takeover of Bankwest.

Commissioner Hayne said several people had written to the commission asking for more time for the Bankwest issue, or that more case studies should have been used, but he said the work of the commission had been intensive on the issue.

Commissioner Kenneth Hayne moved to dispel several "misconceptions", including arguments for more time to be devoted to the investigation of Commonwealth Bank's takeover of Bankwest.

Commissioner Kenneth Hayne moved to dispel several “misconceptions”, including arguments for more time to be devoted to the investigation of Commonwealth Bank’s takeover of Bankwest.

Photo: Supplied

"Some of these further communications have also proceeded from the premise that it is the commission's role to advance of the interests of those who describe themselves as Bankwest's victims," he said. "That, of course, misunderstands the role and the duty of a royal commissioner, which is to inquire, without fear or favour, into matters falling within the terms of reference.

"Neither I, nor counsel assisting, or the solicitors assisting the commission, carry any brief for those who assert a grievance arising from the takeover of Bankwest, or indeed, any other issue."

Commissioner Hayne said some people who wanted their cases "publicly examined and publicly acknowledged" had asked to be witnesses, but he believed case studies were the best way of finding out what happened.

He said there was also some criticism consumers were not able to cross-examine the banks, but that was not correct as they were allowed the opportunity.

The hearing continues.

Felicity Caldwell is state political reporter at the Brisbane Times

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