TERRY MCCRANN

basically ridden that out. There’ll be more to come.

The overriding one is obviously what ends up flowing from the RC and indeed the full portfolio of greater scrutiny and regulatory intervention from especially ASIC and APRA but also the ACCC and the pollies.

There will be consequences — and I’m not talking about direct and immediate costs of the type that produced the $1 billionor-so lower ‘pay for its sins’ profit.

But both costs that will be imposed on a permanent, continuing basis and other direct regulatory interventions in the actual daily life of the banks and bankers.

In this I don’t really see the ‘cop-on-the beat’ — the ASIC people who will sit inside the big banks 24/7, or at least, 9-5 M-F — having a major operating impact. It’s really political grandstanding.

The other ‘new’ factor is how the semi-separation of wealth management and financial advice actually plays out on both the cost and revenue sides for the banks.

It’s pretty easy to put all these things in the predictive blender and come up with some broad forecasts. The broadest is that our big banks are heading ex-growth and exsuper profits.

More specifically, the banks will struggle to hold cash profit growth in positive territory. At best they are likely to record very low single digit growth, pretty much deep into the future.

The pre-GFC days of 20 per cent ROEs (return on equity) are gone for our lifetimes. Even the days of 15-16 per cent pre-RC ROEs are gone until ‘something’ changes. The CBA’s latest 14 per cent is arguably the ceiling for now; the other