The envelope please. For best performance of an Australian chief executive at the latest parliamentary inquiry into banking, the winner is Brian Hartzer from Westpac.
The wooden spoon goes convincingly to the Commonwealth Bank's chief executive and a former child television star from New Zealand, Ian Narev.
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CBA fronts life insurance inquiry
Amid much criticism and controversy, the CBA's insurance arm CommInsure fronted a Senate life insurance inquiry Friday afternoon.
The judging criteria was not just about personality and attitude but this did play a big part. It also reflected a willingness by the banks to take seriously the mood and the objectives of the committee, their co-operation, their preparation and their record on the mistreatment of their customers.
At the losing end of the spectrum, Narev engendered hostility from this political panel. At the other end, Hartzer had them eating out of his hands.
One observer of the past week's hearing performances summed it up so neatly, albeit a bit crudely.
Narev's attitude to the committee was "screw you". The committee's response was "screw you back four fold".
It was at times a very prickly performance, made all the more difficult by his attempts to defend the scandal-ridden track record of is CommInsure business, by relying on an independent review done by Deloitte.
Labor's Matt Thistlethwaite told Narev what he really thought about the Deloitte review of CBA's life insurance arm CommInsure, saying a decision to not interview affected customer "beggars belief" and was "obnoxious".
After a shaky start during the first set of hearings last year, when ANZ chief executive Shayne Elliott appeared a bit like a rabbit caught in the headlights, he must be awarded prize for most improved.
As the wry observer noted, the "last time Elliott's attitude was more screw me", whereas this time he was far better prepared and demonstrably more confident. He didn't sweat the arsenal of bullets that he did last time.
Elliott used the particularly effective strategy of bringing in two of his senior managers, Graham Hodges and head of wealth Alexis George, to ride shotgun, a tactic that meant the committee was better able to get detailed answers to their questions.
It also helped that, since last year's sit down with the committee, ANZ had taken down the interest rates on credit cards, so appeared proactive.
Unlike his counterpart at CBA, Elliott is happy for the ACCC to provide six-monthly recommendations to the Treasurer about competition. Earlier, Narev said the Productivity Commission was the body best placed to assess competition, as was the conclusion of David Murray's Financial System Inquiry.
Interestingly, National Australia Bank's chief executive Andrew Thorburn got a pretty tough time from the committee this time, even though he was generally polite and his answers appeared genuine and honest. But he was at a disadvantage given he was first in the interrogation order.
Thus he was left to test the committee on how it would respond to any pushback on the recommendations it made after last year's first round of bank inquisitions.
He was guarded about the merit of the naming and shaming of senior executives who were in charge of divisions that had breached conditions of the financial services licence. (Elliott showed some level of support for this idea.) Â
He spent a lot of time defending Andrew Hagger, NAB's chief customer officer of the consumer and wealth division. He was broadly alright with the committee's push for data sharing of customer details. But he disagreed that an independent body should take charge of it. He was also lukewarm about the recommendation that banks be banned from ditching a small business customer who had not defaulted on interest payments but whose security had diminished.
The bank bosses who followed had the advantage of seeing Thorburn put through the grinder and knew when concessions to the committee were required, what was safe and what would incur its wrath.
None appeared particularly enthusiastic about the ACCC conducting six monthly audits of bank competition but nor did they chose to make it a battleground.
Hartzer had the benefit was watching all the others. His performance – while also superior to his fellow bankers last time around – was consummate this time.
He agreed with just about all the recommendations put forward by the committee, albeit with some carefully worded caveats.
He managed to tiptoe deftly investigations into Westpac involving credit card overcharging, rejections of claims on life insurance, a banned financial planner, allegations of wealth management up-selling and ASIC's recent legal case involving responsible lending.
While it is clear that none of banks wants to be the subject of more regulation, there is little among the recommendations that will have a meaningful impact on their bottom lines, other than data sharing.
This enables customers to move their accounts between banks with far more ease, in much the same way number portability opened up competition in the telecommunications industry.
History tells us that the increased competition that data sharing should promote is more beneficial for those with smaller market share – read ANZ and NAB – and a threat to market leaders CBA and Westpac.
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