Australian Bank Shares Soar As Inquiry Reports

Share prices of Australia's major banks soared on Tuesday as investors expressed relief that a national inquiry into abuses in their sector shied away from harsh measures which could threaten profits.

Financial stocks had been under sustained pressure ahead of Monday's publication of a Royal Commission report, which revealed rampant misconduct and poor treatment of customers.

The year-long investigation referred more than 20 cases to regulators for possible prosecution, but crucially for markets, stopped short of recommending a shake-up of bank structures.

At midday trade in Sydney on Tuesday, shares in the "big four" banks were tracking higher, with the nation's biggest financial house Commonwealth Bank up by 4.59 percent and Westpac by 6.55 percent.

Even stocks in National Australia Bank (NAB), whose chairman and chief executive were singled out by the inquiry's commissioner Kenneth Hayne, jumped by 4.70 percent.

"The much anticipated release of the Royal Commission Final Report was disappointing, in our view," UBS analyst Jonathan Mott said in a note to clients.

"The final recommendations fell well short of market expectations... Without powerful recommendations, we are concerned that ensuring lasting cultural change over the years may be difficult, especially as management and Boards rotate." (AFP)