K62 Finance

I’ll prove the royal commission wrong, Henry vows

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Original article by John Durie
The Australian – Page: 17 & 21 : 15-Feb-19

National Australia Bank is to follow the lead of Suncorp and set up a board committee that focuses on customers. NAB chairman Ken Henry says he did not intend to appear arrogant when he gave evidence at the royal commission. Henry says he feels that NAB is on the right path to restoring its tainted reputation, and that he intends to prove commissioner Kenneth Hayne wrong. Henry will step down when a replacement for CEO Andrew Thorburn is appointed.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

HSBC warns of dollar drop to US66c amid challenges

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Original article by Sarah Turner
The Australian Financial Review – Page: 31 : 15-Feb-19

The Australian dollar is currently trading at around $US0.70, but HSBC says the latest economic data means it is unlikely to rise above this level. HSBC is particularly bearish about the outlook for the dollar, forecasting that it will test the $US0.66 level by the end of 2019. The Commonwealth Bank in turn has scaled back its year-end forecast for the currency from $US0.75 to $US0.72, citing factors such as the outlook for both global growth and the Australian economy.

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

Reforms ‘won’t be easy’, says APRA

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Original article by Richard Gluyas
The Australian – Page: 21 : 14-Feb-19

Australian Prudential Regulation Authority chairman Wayne Byres has defended its track record for overseeing the financial services sector, after APRA was criticised by the Hayne royal commission. Byres acknowledges that APRA must be more active in regulating the financial services sector, but he notes the challenges involved. He points out that APRA has a workforce of just 600 to supervise nearly 600 financial services providers, and only about half of its employees have a frontline role.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Macquarie chief backs loan brokers

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Original article by Joyce Moullakis
The Australian – Page: 19 & 23 : 13-Feb-19

Macquarie Group has affirmed that it expects profit growth of around 15 per cent for fiscal 2019, which suggests a full-year profit of at least $3bn. Meanwhile, Macquarie has more than $24bn worth of capital reserves at present, but CEO Shemara Wikramanayake has stressed the need for discipline with regard to risk management in the current environment. She has also expressed support for the mortgage broking industry in the wake of the financial services royal commission.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CADENCE CAPITAL LIMITED – ASX CDT, JP MORGAN AUSTRALIA LIMITED, QUADRANT ENERGY PTY LTD, PROPERTY EXCHANGE AUSTRALIA, AUSTRALIAN LABOR PARTY

Henry should not pick new NAB chief: Costello

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 18 : 12-Feb-19

Former federal treasurer Peter Costello suggests that regulators’ failure to prosecute misconduct in the financial services sector was due to reluctance to enforce the law rather that funding constraints. Costello also believes that it is inappropriate for National Australia Bank chairman Ken Henry to oversee the appointment of a new CEO. Henry will step down after a successor to Andrew Thorburn is recruited. Costello adds that bank directors and executives must prioritise compliance with the law in the wake of the financial services royal commission.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC

APRA holds back on Hayne rebuild

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Original article by Ben Butler, Joyce Moullakis
The Australian – Page: 17 & 21 : 12-Feb-19

The Australian Prudential Regulation Authority has stated that it will implement nine of the 10 banking royal commission recommendations concerning it by 2020. However, APRA has not given a timeframe on when it will implement the recommendation to change its prudential focus to concentrate on misconduct. APRA has also stated that an increase in its budget, currently at around $140 million a year, might be needed to implement this recommendation.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BAKER AND McKENZIE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Big agenda: Chronican has his work cut out for NAB revival

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Original article by Eric Johnston
The Australian – Page: 17 : 11-Feb-19

Anthony Healy and Mike Baird are said to be the leading internal candidates to succeed National Australia Bank CEO Andrew Thorburn, while external contenders could include Craig Drummond, Ross McEwan and Lyn Cobley. Acting CEO Philip Chronican stresses that NAB has a "very clear strategy" that is being well executed. He notes that the last week has been challenging for the bank, with the resignation of Thorburn and chairman Ken Henry and the release of the banking royal commission’s final report.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MEDIBANK PRIVATE LIMITED – ASX MPL, WESTPAC BANKING CORPORATION – ASX WBC, ST GEORGE BANK LIMITED

Big four back in favour for investors

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Original article by Scott Murdoch
The Australian – Page: 17 & 20 : 11-Feb-19

Australia’s banking index gained six per cent in the week ended 8 February, with the rally being attributed to renewed interest in the sector among international equity investors. Rahoul Chowdry of law firm Minter Ellison notes that sovereign risk concerns regarding Australian banks have abated following the release of the financial services royal commission’s final report. Mike Evans from the Bank of America Merrill Lynch and Marianne Birch of Macquarie Capital agree that the final report has created greater certainty for investors.

CORPORATES
MINTER ELLISON, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, MACQUARIE CAPITAL PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CITIGROUP PTY LTD

Lowe shortens the odds for a Cup Day cut

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Original article by David Rogers
The Australian – Page: 27 : 8-Feb-19

A growing number of economists expect the Reserve Bank of Australia to reduce the cash rate by the end of 2019, although the general consensus is that interest rates will remain on hold. Meanwhile, financial market traders have priced in a 56 per cent chance of a rate cut by November, compared with just 34 per cent two days ago. UBS now expects the cash rate to be reduced by 25 basis points in November, with a further rate cut in the first half of 2020. However, the Commonwealth Bank expects the next movement in the cash rate to be up, in November 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, STANDARD AND POOR’S ASX 200 INDEX

Comyn confident about house prices

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Original article by Joyce Moullakis, Michael Roddan
The Australian – Page: 21 : 7-Feb-19

The Commonwealth Bank has posted a 2018-19 interim cash profit of $4.77bn, which is 2.1 per cent lower than previously. Mortgage and business lending rose by four per cent and five per cent respectively during the half-year, while lending margins were affected by factors such as increased competition and rising funding costs. Meanwhile, CEO Matt Comyn forecasts that growth in housing credit will slow in 2019, although he does not anticipate a sharp decline in house prices.

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