The Hayne Inquiry's exposure of the shadowy secrets of Australian big bank's failure to act fairly in the home loan space hasn't knocked the major players from their pedestals just yet, with most on the up as the market opened today.
The Royal Commission into the banking sector, led by Former High Court Judge Kenneth Hayne, will further delve into the precarious relationship mortgage brokers have with major banks when scouting for home loan products for borrowers.
The big banks have developed several strategies to fight off the broker wolves, but it's the generous commissions that are thrown around as part of this mitigation that are now under investigation and whatever is uncovered could have a devastating impact on big bank shareholders – especially as regulators flex their muscles.
National Australia Bank Ltd. (ASX: NAB)
Shares in financial services giant National Australia Bank Ltd opened up today to sit at $29.68 at the time of writing still slightly above its 52-week low of $28.01, but a far cry from its May 2017 high of $34.09.
Still any upward movement right now is a miracle for the stock after National Australia Bank executive Anthony Waldron fronted the Royal Commission this week over fraud allegations against 60 staff for dealings with 1360 customers between 2013 and 2016, with NAB now expected to pay between $9 million and $23 million in compensation by November this year.
It is unclear how investors will react if more skeletons are revealed to be hiding in NAB's closet as the inquiry continues.
Crack out the popcorn and take a seat on this one.
Commonwealth Bank of Australia (ASX: CBA)
Shares in Australia's most well-known retail bank, Commonwealth Bank of Australia, are up 0.2% at the time of writing to $75.95 despite generally tracking down in price for the best part of the last 12-months, dropping from $84.54 at this time last year.
But investors are yet to react too dramatically to news this month the Commonwealth Bank will pay back $16 million to customers caught up in its shonky add-on insurance scheme nor the attempt by the CBA to cover this up.
The Commonwealth Bank applied to the Royal Commission to have information about its insurance bungle kept under wraps, but the approach was rejected as it was revealed the Commonwealth Bank will refund $10 million to 65,000 CreditCard Plus customers and $586,000 to 10,000 customers caught up in its Home Loan Protection scandal.
Australia and New Zealand Banking Group (ASX: ANZ)
Australian and New Zealand Banking Group has recently reaffirmed its focused on deepening mortgage discounts to bolster its position in the market and meet stiff competition from other S&P/ASX 200 big banks head on.
But it's unclear why the ANZ share price has taken such a knock of late as its peers hold strong, with a possible reason being its landmark court case over alleged interest rate rigging yet to blow over in investors' minds.
Either way shares in ANZ have seemed pretty cheap of late, dropping down again to $28.04 at the time of writing from $31.53 at this time last year despite future outlook being pretty robust – especially with double-digit profit growth guidance over the next couple of years and analyst price expectations at about $34 per share.
Shares in Westpac Banking Corp (ASX: WBC) have also been on a downward slide over the past 12-months – dropping today to $29.62 from $34.27 at this time last year and not far off its 52-week low of $29.40.
News out of Westpac this week includes CEO Brian Hartzer warning staff "uncomfortable" revelations may become apparent as the Hayne Inquiry heats up with Westpac's internal systems and processes under the spotlight.
Macquarie Group Ltd (ASX: MQG)
Shares in global banking and financial services giant Macquarie Group Limited are on the slide today, down slightly to land at $105.58 at the time of writing, but its 12-month share price trend is on a definitive up.
Macquarie is a peripheral big bank player on the S&P/ASX 200, with its overseas interests netting some serious coin and a lower reliance on the mortgage market compared to its peers meaning Macquarie often weathers marketplace storms a little better than its cousins.
It is unlikely Macquarie shares will be anywhere near their September 2017 buy territory of $80 any time soon.
