K62 Finance

Westpac refunds $20m over credit card transaction fees

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Original article by Clancy Yeates
The Age – Page: 21 : 9-Sep-16

Some 820,000 credit card customers of Westpac will be reimbursed after being charged foreign transaction fees on purchases via offshore merchants that were made in Australian dollars. The banking major has issued about $A20m worth of refunds after the Australian Securities & Investments Commission found that it had neglected to inform customers that such transactions would attract a so-called "foreign transaction fee". Westpac has also updated its terms and conditions.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Zero rates eould smash the banks

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 8-Sep-16

A decline in the cash rate to zero would have a negative impact on returns from Australian banking stocks. Credit Suisse analysts Jarrod Martin and James Ellis have calculated that such a scenario would trigger a fall in earnings of the major banks by an average of nine per cent or $A2.7 billion in total. Consequently, the banks would have to respond to a fall in return on equity by reducing their dividend payout ratios.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Free kick for RBA’s new chief

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Original article by Michael Bennet
The Australian – Page: 19 & 27 : 7-Sep-16

Financial markets estimate that there is a 42 per cent chance that the Reserve Bank of Australia will reduce the cash rate by the end of 2016. The general consensus of economists is that rates will remain on hold until 2017, after the central bank opted against easing monetary policy on 6 September. Expectations of a strong rise in GDP growth in the June quarter will strengthen the case for leaving rates on hold. Philip Lowe will shortly succeed Glenn Stevens as Reserve Bank governor.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UBS HOLDINGS PTY LTD, CLSA AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, STANDARD AND POOR’S ASX 200 INDEX, MORTGAGE CHOICE LIMITED – ASX MOC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Savers losers as banks cut term deposit rates

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Original article by Michael Bennet
The Australian – Page: 21 : 6-Sep-16

Data from Deutsche Bank shows that many Australian banks have reduced their term deposit interest rates by 15-25 basis points since the Reserve Bank cut the cash rate in August 2016. However, while rates on shorter-duration term deposits have fallen, the ANZ Bank has increased its rates on one- and two-year term deposits, while all four major banks have increased their longer-term rates for new customers. Meanwhile, the interest rates on their online savings accounts have been cut by 25 basis points.

CORPORATES
DEUTSCHE BANK AGAUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZCOMMONWEALTH BANK OF AUSTRALIA – ASX CBAWESTPAC BANKING CORPORATION – ASX WBCNATIONAL AUSTRALIA BANK LIMITED – ASX NABBANK OF WESTERN AUSTRALIA LIMITEDBENDIGO AND ADELAIDE BANK LIMITED – ASX BENBANK OF QUEENSLAND LIMITED – ASX BOQRESERVE BANK OF AUSTRALIA

Dollar hit by prospects of US interest rate hike

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Original article by David Rogers
The Australian – Page: 32 : 30-Aug-16

The Australian dollar fell to a four-week low in local trading on 29 August 2016, at around the $US0.7525 level. The currency was sold down amid indications that the Federal Reserve could increase US interest rates at least once before the end of the year, and potentially in September. A downturn in the spot price of iron ore also weighed on support for the commodity currency, which peaked at $US0.7756 earlier in the month. UBS forecasts that the dollar will test the $US0.70 level by the end of the year.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UBS HOLDINGS PTY LTD, BLOOMBERG LP, RESERVE BANK OF AUSTRALIA, QIC LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

CBA cuts discounts to boost margins

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 23-Aug-16

The Commonwealth Bank has advised mortgage brokers that the discount on some of its mortgage loan applications for owner-occupiers and investors will be reduced by 15 basis points. It has also cut the discount on several other mortgage products by eight basis points. The move has been attributed to factors such as the rising cost of funding and new capital requirements. Australia’s major banks recently attracted criticism for withholding most of the 25 basis point reduction in the cash rate.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

Big four banks sued by US funds over BBSW

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Original article by James Eyers
The Australian Financial Review – Page: 3 : 19-Aug-16

A class action launched in the US may complicate the Australian Securities & Investments Commission’s litigation against three of Australia’s big four banks. The litigants, including a derivatives trader and two hedge funds, allege in documents filed in a New York court that they suffered losses because the four major banks and Macquarie Group manipulated the bank bill swap rate. The US litigation makes a settlement between ASIC and the ANZ Bank, Westpac and National Australia Bank rather unlikely.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN LABOR PARTY, DISTRICT COURT OF UNITED STATES. SOUTHERN DISTRICT OF NEW YORK, SONTERRA CAPITAL MASTER FUND, FRONTPOINT FINANCIAL SERVICES, MAURICE BLACKBURN PTY LTD, BANK OF NEW ZEALAND, BNP PARIBAS SA, CITIBANK CORPORATION, CREDIT SUISSE AG, DEUTSCHE BANK AG, HSBC HOLDINGS PLC, JP MORGAN CHASE AND COMPANY, ROYAL BANK OF CANADA, ROYAL BANK OF SCOTLAND GROUP PLC, UC HOLDINGS, ICAP PLC, TULLETT PREBON, MORGAN STANLEY AND COMPANY INCORPORATED, LLOYD’S OF LONDON

Big four the cheapest in 20 years, says Regal

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Original article by Vesna Poljak
The Australian Financial Review – Page: 17 : 17-Aug-16

Regal Funds Management’s Julian Babarczy says Australia’s four major banks offer good value at present, noting that their valuations are at or near their lowest in the last two decades. Meanwhile, Babarczy says the banks’ capital ratios and credit quality are sufficient at present so they do not need to undertake capital raisings. The proceeds of the ANZ Bank’s $A1bn hybrid securities issuance will be treated as additional tier-1 capital rather than common equity tier-1 capital.

CORPORATES
REGAL FUNDS MANAGEMENT PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NIKKO ASSET MANAGEMENT GROUP

CBA chief’s $12.3m pay bonanza

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Original article by Michael Roddan, Ben Butler
The Australian – Page: 21 & 25 : 16-Aug-16

Commonwealth Bank executives were collectively paid a total of $A44.8m in 2015-16. This includes the $A12.3m remuneration of CEO Ian Narev, which was 50 per cent higher than previously. However, the banking major notes that this includes equity awards that were granted over the previous four years and vested during the financial year. Narev’s remuneration rose by 5.4 per cent to $A8.77m on a statutory basis. The bank recently posted a cash profit of $A9.45bn for 2015-16.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN LABOR PARTY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

CBA to drive returns as results soften

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Original article by Michael Bennet
The Australian – Page: 21 & 25 : 11-Aug-16

The Commonwealth Bank of Australia has posted a 2015-16 cash profit of $A9.45bn. Despite being a record result, it was just three per cent higher than previously, due to a disappointing performance across the group’s key businesses in the second half. CBA’s return on equity fell to 16.5 per cent and its net interest margin fell to 2.07 per cent. CEO Ian Narev says banks must take into account the needs of borrowers, savers and shareholders with regard to setting interest rates. Shareholders will receive a full-year dividend of $A4.20 per share.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WAVESTONE CAPITAL PTY LTD, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, WATERMARK FUNDS MANAGEMENT PTY LTD, BELL POTTER SECURITIES LIMITED