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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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BFCSA: Royal commissioner Kenneth Hayne kicks off on Monday: Will he acknowledge Profiting from FRAUD?

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Royal commissioner Kenneth Hayne zeroes in on ANZ, CBA, NAB, Westpac profits

Australian Financial Review Feb 9 2018 3:52 PM

James Frost


Commissioner Kenneth Hayne has dropped his biggest hint yet as to the focus of his inquiry after publishing a paper that focuses on the level of competition in banking and the elevated returns on equity produced by the big four banks.

The Royal Commission into misconduct in the banking, superannuation and financial services industry released the 27 page background paper exploring the structure of the Australian banking Industry without warning on Friday. The inquiry kicks off on Monday with Commissioner Hayne expected to deliver a televised statement.

Titled 'Some Features of the Australian Banking Industry', the paper looks carefully at the bumper profits delivered by the big four banks including the $35.9 billion in profit made in the year to September 2017.

The banks have gone to considerable lengths to frame the profits as belonging to all Australians with a campaign from the Australian Bankers Association reinforcing the point that 80 per cent of profits are paid back to shareholders as dividends.

The commission notes however that the big four banks - ANZ, Commonwealth Bank, NAB and Westpac - have generally achieved higher profit margins than other types of authorised deposit taking institutions (ADIs).

It notes that for the June quarter the big four achieved a profit margins 36.4 per cent compared to the 24.7 per cent profit margin earning by other domestic banks.

The big banks outshone other domestic banks in the case of return on equity, with the big four delivering a return on equity of 13.6 per cent after tax compared with the 10.4 per cent achieved by other domestic banks.

The paper also says that while a precise international comparison is difficult, "publicly available information broadly indicates Australia's major banks are comparatively more profitable" than peer banks in Canada, Sweden, Switzerland and the UK.

"Similar conclusions can be reached for international comparisons for Australian major banks' return on equity" the paper states.

The paper is broken down into two main parts focusing on banks or ADIs and the key product markets for ADIs.

The list of key products and markets is headed by home loans which account for 42 per cent of the banks assets. Home loans are followed by loans, credit cards, institutional banking, SME banking and agricultural financing which gives an indication of the Royal Commission's priorities.

The paper also highlight shrinking number of ADIs which its says has shrunk by 32 per cent - or almost one third - over the last ten years.

The report conclude that while the absolute number of ADIs has shrunk, this has largely flowed from a decrease in the number of credit unions and building societies.

In 2007 there were 155 credit unions and building societies however by 2017 there were 58. The report notes this was a period of consolidation and some lenders rebranding themselves as mutual banks.

The report notes that although the number of major banks has remained the same over the period - the number of other domestic banks has risen from nine to 28 following changes in 2010 that allowed some credit unions to apply for bank status.


The paper also however makes a reference to the contribution the banks make to the economy noting that financial and insurance companies are the largest contributors of value to the economy closely followed by healthcare, construction, social services and mining.

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