K62 Finance

Mortgage rates hit record lows

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Original article by Jonathan Shapiro|Clancy Yeates|Jacob Greber
The Australian Financial Review – Page: 1 & 4 : 24-Jul-14

Three of Australia’s four major banks reduced their fixed mortgage interest rates on 23 July 2014, after the five-year swap rate fell to just 3.11 per cent in the previous week. The Commonwealth Bank’s five-year fixed rate has fallen to a record low of just 4.99 per cent, with Westpac and National Australia Bank reducing their rates for new customers to the same level. Meanwhile, market watchers expect the Reserve Bank to leave the cash rate on hold after inflation rose to three per cent in the second quarter

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA|WESTPAC BANKING CORPORATION – ASX WBC|NATIONAL AUSTRALIA BANK LIMITED – ASX NAB|RESERVE BANK OF AUSTRALIA|AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ|BELL POTTER SECURITIES LIMITED|BELL FINANCIAL GROUP LIMITED – ASX BFG|UBS HOLDINGS PTY LTD|MALAYSIAN AIRLINE SYSTEMS|AUSTRALIAN BUREAU OF STATISTICS|RATECITY PTY LTD|MOZO PTY LTD|MEMBERS EQUITY BANK PTY LTD|UBANK

ANZ-Roy Morgan Consumer Confidence Returns

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 22-Jul-14

The ANZ-Roy Morgan Consumer Confidence rating for Australia rose by 4.4 per cent to 113.5 in the week ended 20 July 2014. Consumer confidence has almost completely retraced the sharp deterioration seen in the weeks around the Federal Government’s May 2013 Budget and is returning to long-run average levels. The improvement in confidence has been driven by large increases in households’ perceptions regarding economic conditions over the next year and their financial situation in both a year’s time and compared with a year ago

CORPORATES
ROY MORGAN RESEARCH LIMITED|AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Treasury says lower $A to avoid income crunch

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Original article by Jacob Greber
The Australian Financial Review – Page: 1-Feb : 22-Jul-14

The Melbourne Economic Forum has warned of the need for a reduction in real wages and higher productivity to avert a decline in Australians’ standard of living. However, Professor Ian McDonald of Melbourne University believes that the economic modelling has too much emphasis on productivity. Meanwhile, federal Treasury economist David Gruen told the forum that the Australian dollar is likely to fall in coming years, which will assist the transition from the mining boom

CORPORATES
MELBOURNE ECONOMIC FORUM, UNIVERSITY OF MELBOURNE, AUSTRALIA. DEPT OF THE TREASURY, VICTORIA UNIVERSITY. CENTRE OF POLICY STUDIES, AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA

Majors facing $23bn ‘too big to fail’ slug

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Original article by Michael Bennet
The Australian – Page: 19 : 18-Jul-14

The interim report by the inquiry into Australia’s financial system has proposed stricter capital requirements for banks that are deemed to be "systemically important". The four major banks will have to lift their tier-one capital holdings to eight per cent from 2016. Jonathan Mott of UBS says that lifting the capital ratio above 10 per cent would require banks to increase their common equity tier one capital by around $A23bn

CORPORATES
UBS HOLDINGS PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, ARNHEM INVESTMENT MANAGEMENT PTY LTD, DEUTSCHE BANK AG

Interest rates set to remain at record lows

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Original article by Bianca Hartge-Hazelman
The Australian Financial Review – Page: 27 : 17-Jul-14

The general consensus of economists polled by Bloomberg is that Australia’s cash rate will rise in the first half of 2015, although the financial market has priced in a better-than-even chance of a rate cut by the end of 2014. Tim Toohey of Goldman Sachs is also bucking the trend, and believes that the Reserve Bank could potentially reduce the cash rate again by September. The central bank itself has retained a neutral bias on monetary policy

CORPORATES
GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG, BLOOMBERG LP, WESTPAC BANKING CORPORATION – ASX WBC, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AMP CAPITAL INVESTORS LIMITED, AMP LIMITED – ASX AMP

Time for discussion over the meaning of ‘too big to fail’

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Original article by James Eyers
The Australian Financial Review – Page: 10 : 16-Jul-14

David Murray, head of the new financial system review for the Australian Government, has raised the issue of banks being deemed "too big to fail". He noted that the "moral hazard" created by the Government guaranteeing deposits should be addressed, and that one solution could be to lift the fees charged to the banks in return for the support. The Australian Bankers’ Association concedes that a debate on the issue is needed, while the Customer Owned Banking Association believes Murray should have gone even further

CORPORATES
MACQUARIE BANK LIMITED – ASX MBL, AUSTRALIAN BANKERS’ ASSOCIATION, CUSTOMER OWNED BANKING ASSOCIATION, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S (AUSTRALIA) PTY LTD, NATIONAL PRESS CLUB (AUSTRALIA), GROUP OF TWENTY (G-20)

Coles to play banks at own game

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Original article by Jared Lynch
The Australian Financial Review – Page: 19 : 15-Jul-14

Coles will expand its product offerings in the financial services sector, with the introduction of personal loans. The grocery retailer expects to receive regulatory approval by the end of 2014, but Coles Finance director Rob Scott has declined to comment on the possibility that Coles could also seek a banking licence. The new products will be offered in partnership with GE Capital

CORPORATES
COLES GROUP LIMITED, WESFARMERS LIMITED – ASX WES, GE CAPITAL AUSTRALIA, TESCO PLC, J SAINSBURY PLC, MARKS AND SPENCER PLC, MASTERCARD AUSTRALIA LIMITED, VISA INTERNATIONAL, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

The $2500 house deposit; high-risk mortgages return

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 1 & 6 : 14-Jul-14

The Australian Prudential Regulation Authority has made banks cut the number of mortgages they write that have high loan-to-valuation ratios (LVRs). However smaller and nonbank providers now offer LVRs of as high as 99.375%, causing concern about a situation similar to the sub-prime mortgages crisis in the US in 2007. A new joint venture by home construction businesses BGC and Metricon even advises buyers to rely both on the first-home owners’ grant and a personal loan to raise a 5% deposit, with as little as $A2,500 of their own money. Meanwhile residential real estate prices have risen some 10% during 2013-14

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BGC (AUSTRALIA) PTY LTD, METRICON HOMES, HIVE EMPIRE PTY LTD, DIGITAL FINANCE ANALYTICS, RP DATA LIMITED, CORELOGIC AUSTRALIA PTY LTD, RISMARK INTERNATIONAL PTY LTD, RESERVE BANK OF AUSTRALIA, RAMS MORTGAGE CORPORATION LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, THE LOAN COMPANY, MOODY’S INVESTORS SERVICE INCORPORATED, BANK OF ENGLAND

CBA on track for planners: Norris

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Original article by Steve Creedy
The Australian – Page: 21 : 14-Jul-14

New Commonwealth Bank of Australia (CBA) CEO Ian Narev has issued an apology to customers affected by malpractice in its financial planning division between 2006 and 2010. The CEO at that time, Sir Ralph Norris, has now commented that he approves of Narev’s efforts in dealing with the scandal. It may cost the bank more than twice the $A52m already paid in compensation to the victims. CBA has also asked ex-High Court judge Ian Callinan to head a review of any further complaints. Sir Ralph says he was advised in 2010 that the matter was with the Australian Securities & Investments Commission

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH FINANCIAL PLANNING LIMITED

Analysts urge Westpac to close 200 branches

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 11-Jul-14

Westpac Banking could reduce costs by closing up to 200 branches. Analysts from JPMorgan said that Westpac generated a third less profit per branch than some competitors. They said that the St George branches, acquired in 2008, were a drain on the business. Closing 200 branches is estimated to save $A400 million a year. The analysts said that Westpac should reconsider its strategy of offering a number of brands

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, ST GEORGE BANK LIMITED, JP MORGAN AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF SOUTH AUSTRALIA LIMITED, BANK OF MELBOURNE LIMITED, RAMS HOME LOANS PTY LTD, BANK OF WESTERN AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UBANK, STANDARD AND POOR’S (AUSTRALIA) PTY LTD