“Rather, there needs to be more vigorous enforcement of the laws and regulations that are already in place,” Mr Hampton told the Tasmanian-based banker and financial services company’s annual meeting in Hobart on Thursday.

“There is absolutely no doubt that some of the conduct issues that have been aired at the royal commission are egregious at best, but in some instances flagrantly dishonest, and certainly represent conduct falling well short of community expectation.

“At MyState, we are vigilant of the need to seek to ensure similar conduct issues do not occur in our business.

“However, as you would expect for an organisation of our size, from time to time we have had issues impacting the customer experience.

“Our culture encourages issues to be raised, investigated and, if appropriate, remediated with the best interests of our customers in mind.”

Mr Hampton and managing director Melos Sulicich  urged the federal government and regulators to “take positive action to level the playing field”.

Mr Hampton said regulation tightening bank lending had aided the growth of the shadow banking sector, which a recent estimate suggested already had 7 per cent market share and was thought to be growing at four to five times the rate of bank lending, partly due to lighter regulatory oversight.

“Constraints imposed on banks through regulation are paving the way for this shadow banking growth,” he said.

He said the Productivity Commission had “reported pointedly that regulatory emphasis on larger banks being unquestionably strong at the expense of competition was not serving the consumer well”. 

“The Productivity Commission observed that larger financial institutions have the ability to exercise market power to the disadvantage of consumers.

“Part of that ability stems from the regulatory requirements placed on smaller banks which inhibit our ability to compete effectively with the larger players.”

MyState’s net profit after tax increased by 4.59 per cent to $31.46 million in 2017-18.

The year included strong growth in the loan book, to $4.55 billion.

That was up by about 50 per cent compared to four years earlier.

Income from operations was up by 1.38 per cent to $126.34 million.

In the company’s 2017-18 annual report released in late September, Mr Hampton said it had been a “year of sound improvement across all key performance metrics”.

He said the loan book had continued to grow significantly faster than overall system growth.

He said the rate of growth was below that of previous years because of regulatory requirements.

“We continued to invest in strengthening our digital platform to meet customers’ changing expectations by offering simpler processes and expanded services,” Mr Hampton said.

MyState has built a significant business outside of Tasmania.

As of June 30, 55 per cent of its home loan portfolio was outside Tasmania.