Aussie Banks Face Squeeze as Conduct Probe Crimps Pricing Power
- Reputation risk hurts ability to pass on rising funding costs
- Big-four lenders ‘are really stuck,’ governance expert says
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A recent spike in funding costs is happening at the worst time for Australia’s big banks, as intense public scrutiny crimps their ability to pass on increases to customers.
The banks are fighting to defend their reputations in the face of an inquiry into misconduct and mistreatment of customers. Two weeks into hearings in front of a Royal Commission, allegations have included claims some bank staff took cash bribes to facilitate mortgages based on fake documentation, while others sold unnecessary insurance policies.