K62 Finance

Old lenders losing battle for hearts and minds

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Original article by Michael Bennet
The Australian – Page: 23 : 22-Sep-16

The 2016 global consumer banking survey of professional services firm Ernst & Young shows that just 21 per cent of Australians completely trust that they will receive unbiased advice from their bank. The survey also found that 36 per cent of bank customers have complete trust in their financial institution, compared with 44 per cent of non-bank customers. Meanwhile, 37 per cent of Australian respondents do not consider the products of rival financial providers to be significantly different.

CORPORATES
ERNST AND YOUNG, PRICEWATERHOUSECOOPERS, MACQUARIE GROUP LIMITED – ASX MQG

Why investors and economists differ on odds of rate call

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Original article by Jessica Sier
The Australian Financial Review – Page: 25 : 22-Sep-16

Financial markets consider that there is a near-even chance that the Reserve Bank of Australia will reduce the cash rate in the first half of 2017. In contrast, the general consensus of economists is that there will be at least one more rate cut in the current monetary policy easing cycle. JP Morgan economist Tom Kennedy expects the central bank to reduce the cash rate by another 50 basis points, while James Woods of Rivkin Securities suggests that there are limits to what monetary policy can achieve in terms of economic stimulus.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, RIVKIN SECURITIES PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Rate cuts ‘hurt some but overall we gain’

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Original article by David Uren
The Australian – Page: 21 : 16-Sep-16

A report released by the Reserve Bank of Australia suggests that official interest rate cuts have a net gain for the nation overall, despite the impact on savers. The report argues that each $A1 reduction in home loan repayments results in an average increase of at least $A0.20 in expenditure on consumer durables. However, spending on durables rises by just $A0.04 on average for each $A1 increase in the interest income of net savers.

CORPORATES
RESERVE BANK OF AUSTRALIA

Formidable barriers mean Fed’s rate rise is no-go next week

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Original article by Karen Maley
The Australian Financial Review – Page: 28 : 16-Sep-16

Financial market traders have priced in a 15 per cent chance that the Federal Reserve will increase US interest rates in September 2016. Rates have increased just twice in the past when the odds of a rise have been 20 per cent or less. Unlike at present, inflation was a key issue on both occasions. Meanwhile, opinion is divided among Federal Reserve policymakers regarding the timing of a rate rise, while the central bank is unlikely to increase the cash rate prior to the presidential election in November.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED

Banks test staff on cyber security

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 15-Sep-16

Australian banks are testing their staff’s readiness for cyber security threats by sending fake "phishing" emails to employees and monitoring their responses. Steve Glynn, the chief information security officer at the ANZ Bank, has told the Sinet61 summit in Sydney that the purpose of the exercise is to identify those who could expose the bank to cyber attacks.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ASX LIMITED – ASX ASX, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Fund managers to Fed: it’s time to raise rates

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Original article by Vesna Poljak
The Australian Financial Review – Page: 13 & 27 : 14-Sep-16

Financial markets have priced in a 22 per cent chance that the US Federal Reserve will increase interest rates in September 2016, while a December increase is rated a 57 per cent chance. PM Capital’s Uday Cheruvu expects the US central bank to tighten monetary policy at some point, noting that there are sufficient grounds for a rate rise. Meanwhile, Randal Jenneke of T. Rowe Price says Australian yield stocks – which bore the brunt of bearish sentiment on 12 September – are likely to fall further.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, PM CAPITAL LIMITED, T ROWE PRICE GROUP INCORPORATED, STANDARD AND POOR’S ASX 200 INDEX, EUROPEAN CENTRAL BANK, BANK OF JAPAN, BANK OF ENGLAND

Narev seeks spirit of ’91 reform

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 14-Sep-16

Commonwealth Bank of Australia CEO Ian Narev has used the 25th anniversary of the banking major’s sharemarket float to call for reforms that will promote long-term economic growth. He says the government of the day made the right decision in selling a publicly-owned bank. CBA shares have fallen by more than 10 per cent in recent weeks, with the stock closing at $A69.50 on 13 September 2016. However, investors paid just $A5.40 per share in the 1991 float.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BELL POTTER SECURITIES LIMITED

Why Commonwealth is still the investors’ favourite, 25 years on

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Original article by James Frost
The Australian Financial Review – Page: 18 : 13-Sep-16

The first tranche of Commonwealth Bank shares were issued at $A5.40 apiece in September 1991. Investors who took up the minimum of 400 shares in the float and reinvested their dividends over the following 25 years would now hold $A131,371 worth of shares in Australia’s largest bank. Financial market observers note that the first stage of the Commonwealth Bank privatisation was popular with investors, despite the challenging economic conditions at the time.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, MORGANS FINANCIAL LIMITED, MONTGOMERY INVESTMENT MANAGEMENT PTY LTD, EVANS AND PARTNERS PTY LTD, LINCOLN INDICATORS PTY LTD, PYRAMID BUILDING SOCIETY

Ombudsman wary of tribunal

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Original article by Sally Rose
The Australian Financial Review – Page: 21 : 9-Sep-16

The Financial Ombudsman Service’s chief ombudsman Shane Tregillis has spoken against a proposal to set up a new banking tribunal. He believes that such a tribunal would make the dispute resolution system more adversarial and legalistic. Tregillis has suggested that the proposal should be examined by the independent panel led by Ian Ramsay which will conduct a review of the financial services sector’s dispute resolution and complaints system.

CORPORATES
FINANCIAL OMBUDSMAN SERVICE LIMITED, CREDIT AND INVESTMENTS OMBUDSMAN, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. SUPERANNUATION COMPLAINTS TRIBUNAL, FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LIMITED, AUSTRALIAN BANKERS’ ASSOCIATION

Supervision the best defence, urges RBA

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 9-Sep-16

Philip Lowe says that thorough supervision of banks is the best way to safeguard against a financial crisis, and he argues that regulatory reforms alone are insufficient. Lowe will shortly succeed Glenn Stevens as Reserve Bank of Australia governor. The banking sector has been subject to greater scrutiny by the Australian Prudential Regulation Authority in recent years, while they are expected to face further regulatory requirements when the so-called Basel IV reforms are finalised by the Basel Committee on Banking Supervision.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, KPMG AUSTRALIA PTY LTD, GROUP OF TWENTY (G-20), UBS HOLDINGS PTY LTD, 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