News
RETAIL BANKING | Cesar Tordesillas, Australia
view(s)

Outrage against Australian banks justified: CEO

Customers have a right to be angry at Australian banks over past treatment, says the Chief of Bendigo and Adelaide Bank, Mike Hirst.

He added that the only way to counter this is to treat customers well.

Hirst traced the hostility from way back in the 1990s and early 2000s when banks closed branches and raised fees.

Record profits and the industry's high executive remuneration packages had also caused the public to lose faith in the banks.

Mr Hirst's comments come less than a week after the big banks declined to pass on in full the cut to official interest rates by the Reserve Bank of Australia.

In response to the central bank cutting the cash rate by 0.25 percentage points, Bendigo and Adelaide Bank only reduced its standard variable home loan rate by 0.19 percentage points.

"There was a bit of rightful outrage of where the industry had gone," said Hirst.

"You look at the banks and what people thought of them, and it's very hard to explain why the banking industry, which is fundamental to the economy and in a privileged position, has a requirement of 20 per cent return on equity and the sort of salaries that we're all getting paid."

Mr Hirst said the banks needed to better educate the public on how they were funded and clearly explain why they did not always pass on the Reserve Bank of Australia's cash rate cuts in full.

"The industry hasn't done a very good job at explaining to the public how it works," he said.

He said ANZ was doing the right thing by trying to distance its regular review of its interest rates from the RBA's monthly board meeting.

"I applaud the ANZ for the approach they're taking because they're trying to educate their customers," he said.

"(But) they've gone from the best customer service of the four big banks to the worst, so it probably hasn't worked that well. A brave decision had to be made."

For more.

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.