K62 Finance

CBA faces penalty over rates slug

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Original article by Joyce Moullakis, David Ross
The Australian Financial Review – Page: 16 : 2-Dec-20

The Australian Securities & Investments Commission has launched legal action against the Commonwealth Bank of Australia over allegations that it breached financial services laws. ASIC contends that customers with business overdraft accounts were charged incorrect interest rates between December 2014 and March 2018. CBA has advised that 2,269 customers who were overcharged during this period have been reimbursed $3.74m in total. ASIC is seeking pecuniary penalties and other orders.

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

Consumer groups savage responsible lending plan

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Original article by Paul Smith
The Australian Financial Review – Page: 19 : 23-Nov-20

The federal government’s proposed changes to responsible lending laws have been attacked by a consortium of consumer rights advocacy groups. In a submission to the government’s inquiry into the proposed changes, the groups have labelled them as "fundamentally defective". They note that the changes represent a direct contradiction of the banking royal commission’s first recommendation, namely that the National Consumer Credit Protection Act should not be revised to alter the "obligation to assess unsuitability".

CORPORATES
CONSUMER CREDIT LEGAL SERVICE, CONSUMER ACTION LAW CENTRE, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

CBA profits cut despite growth in lending

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Original article by James Frost, James Eyers
The Australian Financial Review – Page: 17 : 12-Nov-20

The Commonwealth Bank of Australia has reported a cash profit of $1.8bn for the September quarter, which is 16 per cent lower than previously. Household deposits increased by $15.8bn during the first three months of 2020-21, while mortgage lending increased by $5.6bn. CBA has advised that its net interest margin was lower than in the second half of 2019-20, primarily due to the impact of lower interest rates. CBA has also reported a sharp fall in the number of deferred loans since the end of the September quarter.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

ANZ steers well clear of buy now, pay later

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Original article by Ticky Fullerton
The Australian – Page: 18 : 9-Nov-20

The ‘buy now, pay later’ industry is enjoying strong growth, but the ANZ Bank intends to avoid the sector. The bank’s former chairman David Gonski says that while it is good that BNPL providers allow people to access credit when they need it, consumers must be mindful that they will pay interest when using these services. Meanwhile, Gonski believes that Australia’s investment banking sector presents opportunities at present. Gonski stepped down as ANZ chairman in late October.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Banks shut ATMs and branches amid digital push and cost cuts

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Original article by James Frost
The Australian Financial Review – Page: 18 : 9-Nov-20

Data presented to a federal parliamentary inquiry has highlighted the decline in the branch and ATM networks of Australia’s major banks over the last five years. The figures show that the number of branches and ATMs per 100,000 people has fallen by 33 per cent since 2015. Shadow assistant treasurer Andrew Leigh says the federal government has ignored the issue of branch closures, and says it has no plans to ensure that disadvantaged Australians continue to have access to banking services. The Australian Banking Association notes that the shift to digital banking has gathered pace during the coronavirus pandemic.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION

NAB takes virus hit, digs in to aid recovery

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Original article by James Frost, James Eyers
The Australian Financial Review – Page: 17 & 26 : 6-Nov-20

National Australia Bank has posted a cash profit of $3.7bn for the year to 30 September, which is 37 per cent lower than previously. The result was marred by credit impairment charges totalling $2.76bn, including a provision of $1.86bn for the impact of the coronavirus pandemic. Shareholders will receive a final dividend of $0.30 per share and a full-year payout of $0.60. NAB shares closed 3.2 per cent higher at $19.31 on 5 November.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Banks defiant on mortgage rates

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Original article by Joyce Moullakis, Lachlan Moffet Gray
The Australian – Page: 17 & 21 : 5-Nov-20

Australia’s four largest banks will keep their variable home loan interest rates unchanged, despite the Reserve Bank’s decision to reduce the cash rate to a record low of 0.1 per cent. However, the "big four" banks will all reduce their fixed home loan interest rates, with some falling below two per cent for the first time. The majority of mortgage loans across the Australian financial sector have variable rates, although more borrowers are opting for fixed-rate loans in the low-interest rate environment.

CORPORATES
RESERVE BANK OF AUSTRALIA, 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

Retirees hit but ‘it’s for the good of all’

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Original article by Patrick Commins
The Australian – Page: 4 : 4-Nov-20

Reserve Bank governor Philip Lowe has conceded that retirees and savers will be hard hit by the decision to reduce the cash rate to a record low of 0.1 per cent. However, Lowe contends that they need to be mindful of the "collective good", arguing that lower rates will benefit the broader community by supporting spending and creating jobs. Rice Warner’s executive director Michael Rice notes that retirees who are only partly self-funded will be particularly hard hit by the decline in deposit rates, and many will become more reliant on the age pension.

CORPORATES
RESERVE BANK OF AUSTRALIA, RICE WARNER ACTUARIES PTY LTD

Westpac resumes dividend as profits plummet 62pc

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Original article by James Frost, James Eyers
The Australian Financial Review – Page: Online : 3-Nov-20

Westpac announced on 2 November that it had recorded a full-year cash profit of $2.608 billion, down 62 per cent. Cash earnings by its consumer bank unit were down 12 per cent to $2.7 billion, while earnings by its business bank unit declined by 62 per cent to $734 million. Impairments for bad and doubtful debts were raised by $2.2 billion to $6.2 billion, while Westpac will pay a pay a fully franked final dividend of $0.31 per share on 18 December.

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

No benefit in rate cut: ANZ chief

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Original article by Richard Gluyas
The Australian – Page: 13 & 18 : 30-Oct-20

The ANZ Bank has posted a net profit of $3.58bn for the year to 30 September, which is 40 per cent lower than previously. The result was primarily marred by a blowout in impairment charges, which rose to $2.74bn. Shareholders will receive a full-year dividend of $0.60 per share, compared with $1.60 in 2019-20. Meanwhile, CEO Shayne Elliott says a further reduction in official interest rates is unlikely to do much to stimulate the economy, as financial markets already have sufficient liquidity. The Reserve Bank is widely tipped to reduce the cash rate on 3 November.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA