K62 Finance

Loan deferral scheme a win for economy

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Original article by James Frost
The Australian Financial Review – Page: 19 : 28-Apr-21

More than 468,000 home loan customers in Australia were on deferred repayment plans at the height of the COVID-19 pandemic; this had fallen to 3,170 by the end of March. Likewise, the number of small business borrowers who have deferred their loan repayments has fallen from 235,440 to just 508. Overall, just 0.5 per cent of all loans are still on a ‘repayment holiday’. The loan deferral scheme ended on 31 March, but Australian Banking Association CEO Anna Bligh says the nation’s banks will continue to provide support for distressed households and businesses.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION

Westpac could halve its network: analysts

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Original article by Richard Gluyas
The Australian – Page: 17 : 22-Apr-21

Brendan Sproules of Citigroup says Westpac could significantly reduce costs by rationalising its network of bank branches and divesting non-core assets. Westpac currently has 958 branches nationwide, but Citigroup’s modelling suggests that there is scope to reduce this to just 518. Westpac’s chief financial officer Michael Rowland will outline a cost-cutting strategy when the bank releases its interim results on 3 May.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CITIGROUP PTY LTD

Boost for IPO market as Fahour’s Latitude soars on debut

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Original article by Joyce Moullakis
The Australian – Page: 13 & 17 : 21-Apr-21

Shares in non-bank lender Latitude Financial closed at $2.70 on 20 April, four per cent above the stock’s listing price of $2.60. Latitude reached an intra-day high of $2.99, and the stock finished its first day of trading with a market capitalisation of about $2.7bn. Latitude’s successful sharemarket debut after several failed attempts in the past is likely to bolster the IPO market; indeed, a number of rival non-bank lenders are considering a sharemarket float, including SocietyOne and Pepper Australia.

CORPORATES
LATITUDE FINANCIAL SERVICES GROUP LIMITED – ASX LFS, SOCIETYONE AUSTRALIA PTY LTD, PEPPER AUSTRALIA PTY LTD

Consolidation looms for local lenders

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Original article by Joyce Moullakis
The Australian – Page: 13 & 16 : 12-Apr-21

Global payments and financial services technology group Fiserv processes about one out of every eight payment transactions in Australia. Kees Kwakernaak, the CEO of Fiserv’s Australian arm, expects further consolidation in the local banking sector in coming years. Kwakernaak anticipates mergers at the smaller end of the market in particular. However, he says consolidation in the sector is unlikely to deter non-bank financial services providers from entering the domestic market. Kwakernaak also anticipates greater collaboration among banks, which will be facilitated by initiatives such as the open banking regime.

CORPORATES
FISERV INCORPORATED

Banks grilled on plans for Suncorp

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Original article by Richard Gluyas
The Australian – Page: 13 & 16 : 12-Apr-21

The CEOs of Australia’s four major banks will appear before a parliamentary committee on 15 and 16 April. Shadow assistant treasurer Andrew Leigh says he will seek a commitment from the CEOs that they will not seek to acquire Suncorp’s banking division should it be put on the market. He also wants to them to rule out any further acquisitions in the financial technology sector. The housing market, cyber security, lending standards and the recovery from the COVID-19 pandemic are also likely to be among the issues raised by the economics committee.

CORPORATES
AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, AUSTRALIAN LABOR PARTY

Westpac insurance sales misleading: ASIC

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 18 : 9-Apr-21

The Australian Securities & Investments Commission is taking legal action against Westpac in the Federal Court. ASIC claims that Westpac mis-sold credit card insurance to customers who did not want it, with more than 380 customers affected in a four-month period between April and July 2015. Westpac has stated that it will work with ASIC constructively through the court process, and that it has not sold credit card insurance since 2019. Credit card insurance came under scrutiny during the Hayne royal commission, and the big banks have stopped selling the product.

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

Third IPO tilt values Latitude at $2.6bn

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Original article by Cliona O’Dowd, Jared Lynch
The Australian – Page: 13 & 19 : 1-Apr-21

Latitude Financial is seeking to raise $200m via an IPO; the non-bank lender and ‘buy now, pay later’ provider is slated to list on the Australian sharemarket in the week beginning 19 April. The IPO will be open to institutional investors, Latitude employees and broking firms. Latitude has made two previous attempts to list on the sharemarket; it shelved an IPO worth $1bn in 2019 due to lack of sufficient interest from investors.

CORPORATES
LATITUDE FINANCIAL GROUP LIMITED

Data risk alert in NZ reserve bank file hack

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Original article by Cliona O’Dowd, David Swan
The Australian – Page: 14 : 12-Jan-21

Reserve Bank of New Zealand governor Adrian Orr says the central bank is treating a data breach as a top priority, and the National Cyber Security Centre has been informed of the incident. Orr says the hackers had targeted Accellion rather than the RBNZ’s own computer systems; Accellion provides a third-party file-sharing service which the central bank uses to share and store sensitive information. Spotless is among the Australian companies that were targeted by hackers in 2020, and Prime Minister Scott Morrison warned in June of a rise in cyber attacks in both the public and private sectors.

CORPORATES
RESERVE BANK OF NEW ZEALAND, ACCELLION INCORPORATED, SPOTLESS GROUP HOLDINGS LIMITED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Don’t cut support too quickly: Judo

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Original article by Joyce Moullakis
The Weekend Australian – Page: 19 & 24 : 9-Jan-21

Judo Bank’s joint CEO Joseph Healy has warned of the potential for a surge in small business insolvencies in the June quarter. Healy notes that insolvencies are currently about 35 per cent lower than comparable periods due to factors such as COVID-19 support measures, and he has cautioned the federal government against phasing out support packages for the small business sector too quickly. Meanwhile, Healy is upbeat about the outlook for the small business-focused ‘challenger’ bank, despite the recent decision of rival Xinja to withdraw from the banking sector.

CORPORATES
JUDO BANK PTY LTD, XINJA BANK LIMITED

‘Solvency phase’: RBA warns of new bank pain

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Original article by Richard Gluyas
The Australian – Page: 13 & 17 : 16-Dec-20

The Reserve Bank of Australia’s head of stability Jonathan Kearns says the liquidity phase of the COVID-19 crisis is giving way to a solvency phase, which is emerging as a new challenge for the banking sector. Kearns says the economic shock from the pandemic has been much worse than the global financial crisis, but notes that Australia’s banks have been resilient during COVID-19 and have continued to lend. Banks are likely to start encouraging customers to resume loan repayments in the March quarter, after many opted to defer repayments due to the pandemic.

CORPORATES
RESERVE BANK OF AUSTRALIA