Day 485: 'At our peril'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 485.
Today in summary: ANZ could get rid of another 8,000 workers, APRA’s new Enforcement Approach encourages a “constructively tough” regulatory stance; and proxy advisor CGI Glass Lewis has backflipped and is urging shareholders of embattled AMP to support the wealth giant at its May AGM.
-- Alex
@AlexESampson
Current banker panic level: 😵👮♀️🤥
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In the next three years ANZ chief executive Shayne Elliott could get rid of another 8,000 of the bank’s employees. The Australian is reporting that the job cuts, which would represent almost a quarter of the bank’s workforce, will only come if Elliott follows through on previously secret high-level discussions he had with his chairman David Gonski and the rest of the ANZ board in 2017 where Elliott allegedly floated the idea of reducing the bank’s workforce by almost 20,000 people.
This comes after CBA was last week under pressure to confirm whether reports the bank would axe 10,000 jobs were accurate. The Australian revealed a “secret plan” to cut jobs was afoot in an attempt to save about A$2 billion. CBA said the reports were “misleading” and “unnecessarily alarming”.
APRA’s new Enforcement Approach, published today, sets out how the prudential regulator will use its enforcement powers to hold entities and individuals to account. The plan focuses on disqualification, enforceable undertakings and infringement notices as measures to curb bad behaviour, as well as non-formal approaches including supervisory methods and tools such as prudential and thematic reviews, financial analysis, heightened engagement and reporting requirements.
APRA said its work was achieved largely through using non-formal approaches, and again signalled it would not be heading to court unless as a last resort, emphasising it was prepared to take enforcement action “when appropriate”. The review which accompanied the Enforcement Approach argued APRA must move its enforcement appetite toward being “constructively tough”.
Meanwhile, FOI requests lodged by The Australian reveal APRA spent almost A$3 million on external legal fees for the Hayne royal commission — about half the amount spent by ASIC.
CGI Glass Lewis is urging shareholders of embattled wealth giant AMP to vote in favour of director elections and its remuneration report so it can avoid a “second strike” that could lead to a spill of the board. This comes despite CGI Glass Lewis previously making damning assessments of AMP’s A$3.3 billion sale of its life unit, including a report which revealed AMP had “taken steps to attempt to address the impact of the findings of the royal commission” including revamping its board and management. AMP’s remuneration report was voted down by shareholders last year, a move encouraged by the influential proxy advisers.
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Today’s burn prize: Commonwealth Bank executive manager Clive van Horen
“We stand still at our peril as an organisation and if we are not continuing to focus on customer-led innovation, we won’t be around in years to come.”
van Horen has warned that banks cannot afford to “stand still” on technology investment.
The Commentariat
The Australian’s economics editor Adam Creighton writes that the sun has not set on the “paradise” for white-collar crime in banking. He believes that as the dust settles following Hayne’s royal commission, major banks and regulators have emerged as clear winners. Creighton argues that APRA in particular needs a “wholesale change in attitude”, not more money.
“Good rules don’t cost a cent more than bad ones. But they need public servants with the confidence and integrity to design and enforce them.”
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