(Bloomberg) -- Australia’s biggest pension fund hit out at the nation’s banks, saying a string of scandals exposed by a wide-ranging public inquiry showed the industry was too focused on the short term.
“It’s been disappointing what’s been happening in the banking sector,” Mark Delaney, chief investment officer of AustralianSuper Pty., told the Bloomberg Invest summit in Sydney on Wednesday. Lenders have “focused on short term profitability to the detriment of long-term shareholder value enhancement,” he said.
To watch Mark Delaney’s comments, click here
The banks “set themselves up to some extent for a public backlash,” said Delaney, whose fund manages about A$130 billion ($97 billion).
An inquiry into misconduct in the financial services industry has uncovered a laundry list of wrongdoing that’s shocked the public, cost senior executives their jobs and wiped billions off the market value of the nation’s biggest banks. The public sessions have exposed a litany of bad behavior, from lying to regulators to giving misleading financial advice.
Other pension fund chiefs speaking at the summit said it would take time to rebuild community trust in the financial sector.
“From here, the ability to regain trust and for the community to regain trust in financial services is really crucial,” said Damian Graham, the chief investment officer at First State Super, which manages about A$89 billion of retirement savings.
“There’s been a lot of theater, and some personal reputations have really been sullied,” said John Pearce, chief investment officer at UniSuper, which manages about A$65 billion of retirement savings for university workers. “Has it uncovered anything of a systemic nature we didn’t really know? I doubt it.”
Pearce said reports by the banking regulator into Commonwealth Bank of Australia in the wake of a money-laundering scandal and another into lending practices at the major banks were “more damning.”
The “impact on trust takes a long time to rebuild and that spreads across the whole industry,” said Brendan Casey, general manager of investments at REST Industry Super, which manages about A$50 billion of retirement savings for retail workers. “It’s disappointing when you’re tarred with that brush a bit.”
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