There's a lot been said and written about the new bank levy. And it's a meaningful impost — up to 5% of the Big 5's — Australia and New Zealand Banking Group (ASX:ANZ), Commonwealth Bank of Australia (ASX:CBA), Macquarie Group Ltd (ASX:MQG), National Australia Bank Ltd. (ASX:NAB) and Westpac Banking Corp (ASX:WBC) — annual profits.
But that may be far from the main game. The banks continue to bear the brunt of public — and political — scrutiny as they try to find their way through the maze of profit maximisation and social responsibility.
Insurance. Wealth Management. Financial Advice.
It's a tough arena, and some of the pollies are coming for the banks, making a reasonable case that the companies are too conflicted: that they should either provide financial advice or sell wealth and insurance products — but not both.
That inherent conflict is why the Labor opposition and The Greens are calling for a royal commission — and why some bank head honchos are divesting their wealth management stakes.
It remains to be seen whether it's business as usual, the banks make some changes, or they're dragged kicking and screaming to do the deals, but one thing is clear — they're not exactly flush with friends in Canberra.
And with house prices hitting ever higher highs, the odds of the banks being market-beating investments continue to lengthen. So, if you're looking for income, why not look for some different blue chips, instead?
