Morgans Senior Analyst Azib Khan provides a preliminary review of the Royal Commission Report on Banks: "At first glance, we do not find any of the recommendations relating to the major banks to be overly concerning. From this perspective, the extent of regulatory risk factored into major bank share prices looks overdone. WBC remains our preferred major bank.
We do not anticipate further tightening in lending standards. In fact, we expect an easing in lending standards particularly as both sides of politics appear intent on ensuring the free flow of credit. We also imagine the RBA would prefer to see credit flowing more freely than it is currently.
We are continuing to go through cases which have been referred by Hayne to regulators for potential breaches of the law and what this means in terms of potential penalties for the institutions involved."
