An inquiry that has exposed rampant greed and wrongdoing in Australia’s major banks and wealth managers wraps up this week ahead of a final report which could trigger sweeping reform of the financial sector of the world’s 12-largest economy, Reuters reported. Dismissed initially as a “populist whinge” by the ruling conservative party, the quasi-judicial inquiry known as a Royal Commission has revealed branch-to-boardroom misconduct which will almost certainly trigger tougher regulation.
CBL Insurance has finally entered liquidation amid accusations of massive solvency breaches, Insurance Times reported. Nathan Gedye, lawyer for the Reserve Bank of New Zealand, said CBL Insurance’s balance sheet was insolvent by $86.6m in 2013, $102m in 2014, $104m in 2015 and $98.6m in 2016, according to The New Zealand Herald. The company’s solvency position as at December 2017 was 25 per cent compared to the ratio required by direction of the Reserve Bank of 170 per cent and the required 100 per cent under licence, a shortfall of $136.5m.
Australia’s big banks are set for their worst earnings season since the global financial crisis. A softening housing market, margin pressure from rising funding costs, and the ballooning cost of dealing with the fallout from an inquiry into misconduct in the financial industry, are all squeezing profits, Bloomberg News reported. Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. are expected to report their first declines in full-year cash profit since 2016, while Westpac Banking Corp.
Former prime minister Dame Jenny Shipley gave evidence for a second day at Auckland High Court rejecting claims that Mainzeal, a construction company she chaired, was insolvent as early as 2008, Stuff.co.nz reported. Mainzeal was put into receivership in early February 2013, but liquidators Andrew Bethell and Brian Mayo-Smith of BDO allege the company traded while insolvent, and are suing some of its former directors, including Shipley, for up to $75 million in damages to repay Mainzeal's creditors. Shipley betrayed no nerves while giving evidence of her involvement with Mainzeal between 20