Thank you Chair. I welcome the opportunity to appear before you today.
I thought I might talk briefly about what we’re seeing in the economy, then talk about some of the actions we are taking to become a simpler, better bank.
Since I last appeared before this Committee, uncertainty has increased about the outlook for global growth, driven by a range of geo-political issues relating to trade, technology and sovereignty.
In this context, the Australian economy has some notable strengths:
- unemployment remains close to decade lows;
- our export industries are performing strongly; and
- the budget is on a sound footing.
However, we would all like to see higher wage growth and greater business investment.
Against this backdrop, we have seen cash rates fall to unprecedented levels in Australia. Lower rates are also a feature globally.
We recognise the important role that banks play in helping to stimulate economic activity.
Australian businesses remain the engine room of the economy, and we are committed to doing what we can to help them continue to innovate, invest and grow.
We currently lend more than $500m to Australian businesses every week, and have the capacity and appetite to do much more.
Confidence among small business owners is particularly important. Many hold property as collateral against their business loans, and many have seen equity levels in their homes reduce, due to fluctuations in property prices.
We have now seen the housing market stabilise, which we expect to flow through to the retail and construction sectors, and to help improve consumer and business confidence.
We have lent $92bn to our home loan customers in the last year. Home lending to our customers has grown 30% faster than the system.
We are acutely aware of the impact of lower rates on our 7 million depositors who have seen their interest incomes decrease.
It is our responsibility to explain to all of our customers, and to the broader community, what we’re doing to support them in balancing their differing needs.
I would now like to turn to the changes we are making to become a simpler, better bank.
The Royal Commission forced us to confront fundamental questions about our business and how to better serve our customers.
Last year, I spoke to you about the issues we needed to address and the actions that we were taking. And as I said, we expect to be judged on our actions, not on our words.
This year, we’ve continued to take significant action to simplify our portfolio, simplify the way we operate, and to put things right for our customers. We have spent over $1.2 billion over the last five years to refund, with interest, over half a million customers impacted by past issues.
Over the past year, I’ve also had the opportunity to interact with thousands of our customers, shareholders and members of the community.
This includes the nearly 14,000 people who took the time to write to me with their thoughts, ideas and concerns in response to a letter I sent to 8 million of our customers last year.
I have written again to our customers this year, and earlier this week, I held a customer forum in Brisbane, which was broadcast live online.
Based on what they have told us, we have made changes to our business.
These have included removing a significant number of fees, and providing smart alerts and notifications to help customers avoid fees and better manage their finances.
We have also strengthened our commitment to small business, rolling out same day decisions on simple business lending, removing business banking fees and establishing a dedicated business financial assistance team. We have also pledged our support for the Business Growth Fund – which is to be established with the assistance of the Federal Government.
We are mindful of the impacts of severe drought on many small businesses. We are supporting families in regional and rural Australia to stay on their properties, giving them direct financial assistance during these times of need. Through contributions from the Bank, and the generous support of our customers, we have been able to donate nearly $8m to help drought affected farmers.
An important lesson from the Royal Commission was that we must do more to support our most vulnerable customers. We have established a dedicated Community and Customer Vulnerability team.
And over the past five years we’ve also been providing assistance to our customers experiencing financial abuse, and domestic and family violence. By the end of this year we will have spent $30 million helping these customers.
We also see older and more vulnerable customers increasingly targeted by frauds and scams. Australians lost more than half a billion dollars in fraud and scams last year. We have a dedicated team in place, and have held over 1000 seminars in branches on a range of topics, including how to better protect yourself online.
These are just some of our efforts to contribute to the communities in which we operate.
But I recognise there is still much more to do to become a simpler, better bank, but I hope you can see that we are making progress.
I am joined today by Deputy CEO David Cohen and we look forward to answering your questions.