K62 Finance

Mortgage stress continued to increase in February to a new record high of 1.63 million; despite no RBA rate rise

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Original article by Roy Morgan
Market Research Update – Page: Online : 27-Mar-24

New research from Roy Morgan shows that a record 1,629,000 mortgage holders (31.4%) were ‘At Risk’ of ‘mortgage stress’ in the three months to February 2024. This was an increase of 20,000 (+0.4%) on the record high number in January 2024 (1,609,000), despite the Reserve Bank board electing to leave interest rates unchanged at 4.35% at its February meeting. However, the proportion of mortgage holders ‘At Risk’ is still well below the record high of 35.6% reached during the Global Financial Crisis because of the larger size of the mortgage market today. The number of Australians ‘At Risk’ of mortgage stress has increased by 822,000 since May 2022, when the RBA began a cycle of interest rate increases. Meanwhile, the number of mortgage holders considered ‘Extremely At Risk’ of mortgage stress is now numbered at 987,000 (19.7% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.3%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

ANZ settles class action for $57.5m

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Original article by David Ross
The Australian – Page: 15 & 18 : 26-Mar-24

The ANZ Bank will pay $57.5 million to settle a class action brought by Phi Finney McDonald, with the law firm having alleged that the bank’s credit card had incorrectly charged customers. Phi Finney McDonald claimed the ANZ had told customers that they could pay repay as much or as little of the balance of their credit cards as they wanted, but did not warn them that if they did not repay the full balance that they would be charged interest against the full amount borrowed. The action was backed by Woodsford Litigation Funding, with the settlement due to be approved by the federal court in August.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, PHI FINNEY McDONALD PTY LTD, FEDERAL COURT OF AUSTRALIA

Borrowers on slow march to mortgage cliff amid rollover

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Original article by Patrick Commins
The Australian – Page: 4 : 19-Mar-24

The Commonwealth Bank’s head of Australian economics Gareth Aird notes that the worst fears about the so-called ‘mortgage cliff’ have not eventuated. However, he adds that the shift from fixed to variable-rate home loans has had an impact on many households’ spending. Meanwhile, it is estimated that more than 250,000 households will transition to variable-rate home loans over the next 18 months; their mortgage repayments are set to rise sharply, even if the Reserve Bank does not increase the cash rate again.

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

Lending malaise as home loans retreat

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Original article by Megan Neil
The Australian – Page: 19 : 8-Mar-24

Data from the Australian Bureau of Statistics shows that the value of new housing loans fell by 3.9 per cent to $25.12bn in January; this followed a 4.1 per cent decline in December. The general consensus of economists had been for two per cent growth in home loans during January. The value of new owner-occupier loans fell by 4.6 per cent to $15.91bn, and lending to property investors was down 2.6 per cent to $9.21bn. Meanwhile, lending to first-home buyers was down 6.9 per cent, and the value of those loans fell by six per cent.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS

ACCC cedes on Suncorp takeover

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Original article by Lucas Baird, James Eyers, Liam Walsh
The Australian Financial Review – Page: 17 : 6-Mar-24

The Australian Competition Tribunal has published its full reasons for approving the ANZ Bank’s $4.9bn deal to acquire the banking arm of Suncorp Group. It concluded amongst other things that it will not result in any substantive change in the structure of the market and is unlikely to lead to increased ‘coordination’ between the nation’s four major banks. The Australian Competition & Consumer Commission has advised that it will not appeal against the tribunal’s ruling. The federal government must also approve the deal on national interest grounds.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, SUNCORP BANK, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIA. COMPETITION TRIBUNAL, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Australians lose nearly $1 billion a year in card surcharges and the RBA has warned banks it has to stop

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Original article by Samuel Yang
abc.net.au – Page: Online : 5-Mar-24

Analysis based on figures from the Reserve Bank has revealed that Australians are losing $960.26 million a year in card surcharges, which can be significantly reduced through proper implementation of least-cost routing (LCR). LCR is an RBA scheme that seeks to cut card payment processing fees for businesses, and RBA governor Michele Bullock has threatened to mandate it by the middle of the year if a target of 80 per cent of business terminals being enabled with LCR is not met by then.

CORPORATES
RESERVE BANK OF AUSTRALIA

More at risk of mortgage stress as rate rises take toll

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Original article by Paulina Duran
The Australian – Page: 13 & 16 : 28-Feb-24

Data from Roy Morgan shows that a record 1.6 million Australians were ‘at risk’ of mortgage stress in the three months to January. The Roy Morgan report shows that an additional 802,000 people have had to spend up to 45 per cent of their after-tax household income on their mortgage repayments since the Reserve Bank began raising the cash rate, putting them at risk of mortgage stress. Roy Morgan CEO Michele Levine says another 29,000 home-loan borrowers would be at risk by April if the RBA increases the cash rate in March. Separate data shows that prime mortgage arrears among publicly securitised loans rose by 0.5 per cent to 0.97 per cent in the December quarter; Erin Kitson of S&P Global Ratings expects arrears rates to peak above one per cent.

CORPORATES
ROY MORGAN LIMITED, S&P GLOBAL RATINGS

Mortgage stress increased in January following RBA’s November rate rise to record high above 1.6 million

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Original article by Roy Morgan
Market Research Update – Page: Online : 27-Feb-24

New research from Roy Morgan shows that 1,609,000 mortgage holders (31.0%) were ‘At Risk’ of ‘mortgage stress’ in the three months to January 2024. This period included an interest rate increase on Melbourne Cup Day, with the RBA raising interest rates to 4.35%. The figure for January represented a new record high total for mortgage holders considered ‘At Risk’ of mortgage stress, beating the previous record highs above 1.56 million in August and September 2023. The number of Australians ‘At Risk’ of mortgage stress has increased by 802,000 since May 2022, when the RBA began a cycle of interest rate increases. Meanwhile, the number of mortgage holders considered ‘Extremely At Risk’ of mortgage stress is now numbered at 994,000 (19.8% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.3%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

ANZ cleared for $4.9bn Suncorp deal

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Original article by Paulina Duran
The Australian – Page: 15 & 19 : 21-Feb-24

The ANZ Bank will overtake National Australia Bank as the nation’s third-biggest lender after receiving approval for its acquisition of Suncorp Bank. The Australian Competition Tribunal rejected the Australian Competition & Consumer Commission’s assertion that the $4.9bn deal would substantially lessen competition in sectors such as mortgage lending. The tribunal’s deputy president John Halleysays it was of the view that the small increase in ANZ’s market share arising from the merger would not significantly increase the likelihood of ‘co-ordination’ among the major banks in order to limit competition.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, SUNCORP BANK, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIA. COMPETITION TRIBUNAL, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Bendigo cool on ANZ plan

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Original article by Lucas Baird
The Australian Financial Review – Page: 18 : 20-Feb-24

The Australian Competition Tribunal’s decision on the ANZ Bank’s bid to acquire Suncorp Group’s banking arm will be announced today. The Australian Competition & Consumer Commission blocked the deal in 2023. Bendigo & Adelaide Bank MD Marnie Baker says the ANZ-Suncorp deal is "not a good transaction for competition or consumers", although she has declined to state whether Bendigo will make an offer for Suncorp Bank if the ANZ deal is rejected. Meanwhile, Bendigo has posted a 2023-24 interim cash profit of $268.2m, which is five per cent lower than previously.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, SUNCORP BANK, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIA. COMPETITION TRIBUNAL, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN