All four of Australia’s Big Four lenders — Westpac, Australia and New Zealand Banking Group, Commonwealth Bank of Australia and National Australia Bank — admitted to misconduct related to small business (SMB) lending practices as the nation’s inquiry into industry wrongdoings continues.
Reports in Reuters on Monday (May 21) said executives from the Big Four delivered testimony during public hearings as the Royal Commission continues its probe of the banking industry.
The publication said Kenneth Hayne, a former judge who is presiding over the Commission, has so far received more than 5,500 submissions by customers detailing misconduct by their financial service providers. Eleven percent of those submissions, he said, were related to small business banking.
Westpac admitted signing on a legally blind pensioner as a loan guarantor for a small business without warning the business owner of the risk, then demanding the business owner sell her house when the business failed.
Australia and New Zealand Banking Group acknowledged 47 fraudulent business loans that were extended last year.
Commonwealth Bank of Australia admitted systemic double-charging of interest to some small business customers and did not notify those SMBs in a timely manner once the double charges were discovered.
And National Australia Bank said it overcharged some clients because of miscalculated interest rates and double-charged fees.
Reports said shares in the Big Four dropped by a combined $28 billion since officials began proceedings in February; AMP saw the largest decline, with shares dipping 24 percent.
Government officials have faced criticism over an apparent lack of oversight of the banking industry following several scandals among top banks. Reports in Reuters last month said the pressure apparently led to a change of heart for Minister for Finance and Revenue Kelly O’Dwyer, who had previously disagreed with the creation of the Royal Commission, but eventually agreed that it would benefit customers.