Royal commission points to big bank dominance

Treasurer Scott Morrison and Prime Minister Malcolm Turnbull at a press conference at Parliament House in Canberra Thursday

Treasurer Scott Morrison and Prime Minister Malcolm Turnbull at a press conference at Parliament House in Canberra Thursday

Evidence before the royal commission suggests consumers have not always enjoyed the right to be treated honestly and fairly when it comes to home loans, senior counsel assisting Rowena Orr SC said.

While the commission noted that precise global comparisons are hard, it found that Australia's major banks are "comparatively more profitable (as assessed by net income as a percentage of total assets) than some of their worldwide peers in Canada, Sweden, Switzerland and the UK".

The Financial Services Royal Commission began its proceedings today in Sydney.

Major financial institutions have been admonished by the banking royal commissioner, Kenneth Hayne, after it emerged some had been unable to properly complete a list of their misconduct within the requested timeframe. It has also received 48 responses from banks, regulators and other institutions.

"Approximately 84% of submissions relate to misconduct or conduct of financial services entities that falls below community standards and expectations", she said at the hearing in Melbourne.

About 40% relate to culture and governance practices and 35% to the effectiveness of redress for consumers.

Inappropriate lending practices across home loans, vehicle loans and credit cards will be the focus of the banking royal commission's first public hearing.

The commission identified inappropriate lending as of the themes that it said have already emerged in its review of the submissions it has received so far.

"Clients proposed trust and confidence in their financial advisers and it is important that their trust and confidence is well placed".

He acknowledged, as stated in the letters of patent for the Commission, that Australia has one of the strongest, most stable and most profitable banking and superannuation financial services sectors in the world.

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