K62 Finance

Big banks’ wealth retreat may be short-lived

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 22 : 16-Oct-20

IOOF CEO Renato Mota does not think Australia’s big banks will be involved in the wealth management sector over the next five years, although he expects them to return to the sector eventually. The major banks have either exited the sector or are in the process of doing so as a result of damning revelations at the Hayne royal commission. Netwealth’s joint MD Matt Heine notes that banks also got out of wealth management in the UK but re-entered the sector within 10 years, although "with very different propositions". Hub24 MD Andrew Alcock says the thought of the banks returning to wealth management does not perturb him.

CORPORATES
IOOF HOLDINGS LIMITED – ASX IFL, NETWEALTH GROUP LIMITED – ASX NWL, HUB24 LIMITED – ASX HUB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

RBA lays ground for Cup Day cut

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Original article by David Rogers, Patrick Commins
The Australian – Page: 13 & 20 : 16-Oct-20

Expectations of an official interest rate cut in November have been heightened by comments made by Reserve Bank of Australia governor Philip Lowe. He has told the Citi Investment conference that further easing of monetary policy is likely to "get more traction" as the economy re-opens than it would have at the COVID-19 pandemic’s peak. Kristina Clifton of the Commonwealth Bank says the RBA is likely to reduce the cash rate from 0.25 per cent to 0.1 per cent in November, and expand its bond-buying program to include five and 10-year government bonds.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Banks stay cautious despite lending shift

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Original article by Cliona O’Dowd
The Australian – Page: 15 : 28-Sep-20

Investors Mutual founder Anton Tagliaferro does not expect the federal government’s proposal to scrap responsible lending laws to make a "material difference" to Australia’s banks. He says banks tend to be very cautious during a recession, adding that this is likely to continue going into 2021. Tagliaferro adds that banks are likely to be focused on existing loans in the near-term, as repayment deferral periods come to an end. Meanwhile, he expects the federal Budget on 6 October to include tax cuts and measures aimed at boosting jobs.

CORPORATES
INVESTORS MUTUAL LIMITED

Give more help to borrowers: APRA

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Original article by Cliona O’Dowd
The Australian – Page: 17 : 23-Sep-20

Repayments on more than 900,000 mortgage and business loans were deferred in late March due to the coronavirus pandemic. Many borrowers are now facing the six-month anniversary of their deferral, and the Australian Prudential Regulation Authority has offered lenders a number of suggestions about how to handle customers who are slated to resume repayments. Amongst other things, APRA has suggested that lenders should contact borrowers via a number of channels in the lead-up to the expiry of their deferral period. National Australia Bank CEO Ross McEwan recently indicated that 20 per cent of these customers have failed to respond when it has contacted them regarding the issue.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Fed says rates will stay near zero until 2023

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Original article by Nick Timiraos
The Australian – Page: 24 : 18-Sep-20

The US Federal Reserve left interest rates unchanged at its latest policy meeting, with all 17 central bank officials indicating that they expect interest rates to remain at a record low until at least the end of 2021. In addition, 13 of the Federal Reserve officials have indicated that interest rates are likely to remain at close to zero until the end of 2023. Meanwhile, the central bank officials now expect the US unemployment rate to average about 7-8 per cent in the December quarter.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD

CBA investors brace for lower payout

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Original article by Cliona O’Dowd
The Australian – Page: 15 : 10-Aug-20

The consensus of analysts is that the Commonwealth Bank of Australia’s 2019-20 cash earnings will be 10 per cent lower than previously, at $7.6bn. UBS expects the coronavirus pandemic to prompt CBA to increase its impairment charges for the second half to $1.9bn, which includes a $1.5bn COVID-related provision that the bank announced earlier in the year. Meanwhile, UBS forecasts that CBA shareholders will receive a final dividend of $0.95 per share, which would be in line with the Australian Prudential Regulation Authority’s revised guidance.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UBS HOLDINGS PTY LTD

Shape of banks’ dividend recovery will be more U than V

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Original article by James Eyers
The Australian Financial Review – Page: 16 & 18 : 24-Jul-20

Brendan Sproules of Citigroup expects Australia’s banks to resume paying dividends in the December quarter, at a reduced payout ratio of just 40 per cent. He does not expect banks’ payout ratios to return to pre-coronavirus levels until fiscal 2022. Westpac and the ANZ Bank recently put their interim dividends on hold, while Citigroup expects the Commonwealth Bank and Bendigo & Adelaide Bank to withhold their dividends for the second half of 2019-20.

CORPORATES
CITIGROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN

Regulator won’t appeal wagyu and shiraz case

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Original article by John Kehoe
The Australian Financial Review – Page: 3 : 22-Jul-20

The Australian Securities & Investments Commission has ruled out an appeal against Westpac’s court win over allegations that it breached responsible lending laws. The full Federal Court recently upheld an August 2019 ruling in Westpac’s favour, and ASIC is believed to have decided that it will not take the matter to the High Court. ASIC will instead urge the federal government to make changes to credit laws in order to clarify the responsible lending rules.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA, HIGH COURT OF AUSTRALIA

Satisfaction of Australia’s banks improves amid COVID-19

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Jul-20

New data from Roy Morgan shows that customer satisfaction with Australia’s banks was at 79.5% in May, up 0.2% points on April and up 1.1% points from May 2019. The biggest improvement in customer satisfaction over the last year was from Australia’s four major banks, with satisfaction up 1.4% points to 77.2% in May. Commonwealth Bank has the highest satisfaction of the four majors in May, closely followed by NAB, ANZ and Westpac. Mutual Banks continue to have the edge in customer satisfaction and are up 0.7% points from a year ago, to 89.2%. The leading Mutual Bank for satisfaction is Bank Australia, closely followed by Bank First and Beyond Bank. The foreign banks operating in Australia have a high customer satisfaction of 85.5% in May, but this is down 0.3% points from a year ago. Of the foreign banks ING is a clear leader for satisfaction ahead of HSBC and Citibank. These are some of the latest findings from Roy Morgan’s ‘Customer Satisfaction report on Consumer Banking in Australia’. This report is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes.

CORPORATES
ROY MORGAN LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, BANK AUSTRALIA, BANK FIRST, BEYOND BANK AUSTRALIA, ING BANK (AUSTRALIA) LIMITED, HSBC BANK AUSTRALIA LIMITED, CITIBANK PTY LTD

Lockdown to trigger more loan distress

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 20 : 10-Jul-20

Data from the Australian Prudential Regulation Authority shows that banks have deferred 18 per cent of small business loans in response to the coronavirus pandemic. Morgan Stanley has warned that that many businesses in Melbourne that have been forced to shut down for a second time may never re-open, particularly smaller ones. The APRA figures also show that more than 10 per cent of home loan repayments have been put on hold. Loans to investors account for 34 per cent of home loan repayments that have been deferred, prompting concern that there may be a surge in distressed selling.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MORGAN STANLEY AUSTRALIA LIMITED