Bank investors are waiting the findings of the Australia's Royal Commission. Photo/Michael Craig.
Bank investors are waiting the findings of the Australia's Royal Commission. Photo/Michael Craig.
Australian bank investors are set to have a nervous wait over the next few days as they ponder the outcome of the findings from the Royal Commission into misconduct in the financial services sector.
The final report is due to be given to the Australian government today [Friday] and presented publicly on Monday after the ASX closes.
Shares in ANZ, Westpac, Commonwealth Bank of Australia and National Australia Bank have been badly beaten up over the last year on the back of poor conduct findings revealed as part of public hearings held as part of the inquiry.
Since a December low they have recovered by around 10 per cent.
But William Curtayne, a portfolio manager at Milford Asset Management, who is based in Australia, said the recent rise made the stocks vulnerable to another sell-off if there is more bad news in the report.
Investors which include many average Australians and New Zealanders through their superannuation and KiwiSaver funds will be waiting to see if any criminal or civil charges are pressed against the banks and how much more in remediation this could cost them.
There are also concerns that more pressure on the banks to do responsible lending could tighten credit conditions further putting more pressure on already depressed property prices.
If that comes alongside tougher economic conditions in Australia it could see a rise in loan defaults which would weigh on bank profits.
Curtayne said while the report would give investors more certainty it won't give absolute certainty because it will depend on how many of the recommendations are taken up by the Australian government and who that government will be given the pending election this year.
