K62 Finance

AUSTRAC, Westpac head to court

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Original article by James Frost
The Australian Financial Review – Page: 19 : 9-Jun-20

Westpac and AUSTRAC are having difficulty agreeing on an agreed statement of facts as the two parties prepare to heard for court. AUSTRAC has accepted Westpac’s admission that it broke the law 23 million times, but AUSTRAC has indicated it plans to pursue Westpac for a series of "unquantifiable" breaches. Justice James Allsop said on 30 March that Westpac and AUSTRAC should be ready to go to trial "sooner than later" in a case that may well cost Westpac more than $1 billion to settle.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

RBA tips fewer ATMs and an end to cheques

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Original article by Joyce Moullakis
The Australian – Page: 17 : 4-Jun-20

The Reserve Bank of Australia could introduce a ‘least-cost routing’ regime for credit card transactions unless merchants take the initiative themselves, according to assistant governor Michele Bullock. This is among the options that will be considered in the RBA’s review of the payments system. Bullock also notes that the coronavirus pandemic has seen a sharp downturn in ATM usage, which may prompt the nation’s ATM network to be scaled back. She adds that cheques could soon be phased out, given that this payment option has been in steady decline for the last two decades.

CORPORATES
RESERVE BANK OF AUSTRALIA

Surging dollar harming export earnings

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Original article by David Rogers
The Australian – Page: 20 : 4-Jun-20

The Australian dollar peaked at a five-month high of $US0.6983 in local trading on 3 June, having fallen to an 18-year low of $US0.551 earlier in 2020. The currency has averaged $US0.648 so far in the first half of the calendar year, compared with an average of around $US0.68 in the second half of 2019. The dollar’s recent rebound has boosted offshore interest in Australian equities, although it will weigh on the nation’s export earnings.

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Savings rates are drying up as banks race to the bottom on mortgages

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Original article by Matt Johnson
The New Daily – Page: Online : 3-Jun-20

Data from Canstar shows that Australian banks reduced the interest rates on a range of savings accounts and term deposits by up to 75 basis points in May. However, the interest rates on mortgage loans were reduced much less aggressively, averaging just 0.08 per cent for variable home loans and 0.36 per cent for fixed-rate loans. Steve Mickenbecker of Canstar attributes this to factors such as growing competition from non-bank mortgage lenders. However, he does not expect rates to fall much further.

CORPORATES
CANSTAR PTY LTD

ANZ urges stricken firms: wind up now

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Original article by James Frost
The Australian Financial Review – Page: 13 & 17 : 1-Jun-20

The ANZ’s head of retail and business banking, Mark Hand, suggests that 2021 will be a very difficult year for small businesses. He suggests that many small and medium enterprises will not recover from the COVID-19 crisis, even with loan deferrals from banks and wage subsidies from the federal government. He says the best move for some SME owners would be to wind up their business and walk away with some equity. The ANZ is worried that the recent spark of optimism resulting from a fall in new COVID-19 cases and the easing of some restrictions will result in some of its business borrowers becoming complacent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Watchdog backs delay of Hayne banking reforms

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Original article by Eli Greenblat
The Australian – Page: 16 : 29-May-20

Some of the recommendations arising from the Hayne royal commission were slated to be implemented in July. Australian Securities & Investments Commission chairman James Shipton has expressed support for the federal government’s decision to delay these reforms until the end of 2020, given the impact of the coronavirus pandemic on banks and the domestic economy. Shipton has also told a Senate committee that ASIC is watching out for fraudulent activity such as phoenix companies and attempts to scam people out of their superannuation savings via the early access scheme.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Lowe urges banks to lend again

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Original article by David Rogers
The Australian – Page: 13 & 17 : 22-May-20

Reserve Bank governor Philip Lowe has praised the resilience of Australia’s financial system and said that it is well-placed to ride out the coronavirus pandemic. Lowe has also told a Financial Services Institute webcast that banks should utilise the capital and liquidity buffers that they have built up over the last decade and continue to lend during the pandemic. Lowe also repeated his view that the prospect of negative interest rates in Australia is unlikely.

CORPORATES
RESERVE BANK OF AUSTRALIA, FINANCIAL SERVICES INSTITUTE OF AUSTRALASIA

Powell’s equities lift: we’re not out of ammo

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Original article by David Rogers
The Australian – Page: 20 : 19-May-20

The Australian sharemarket has been bolstered by encouraging comments from US Federal Reserve chairman Jerome Powell. He indicated that there is "almost no limit" to the central bank’s monetary stimulus in response to the coronavirus pandemic; Powell has also forecast that the US economy will steadily recover during the second half of 2020, in the absence of a second wave of virus infections. The Federal Reserve’s balance sheet has increased by 67 per cent to $US6.93trn since February, although the central bank has been winding back its quantitative easing program since mid-March.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, STANDARD AND POOR’S ASX 200 INDEX

NAB’s check on mortgage deferrals

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 15 : 18-May-20

The National Australia Bank announced in March that it would offer a six-month repayment reprieve to mortgage loan customers impacted by COVID-19, with 80,000 borrowers taking up its offer. It stated then it would wait for three months before contacting borrowers to see if they are able to start making payments again, but it has begun the process after just two months. All the other major banks have confirmed they will wait the three months before getting in touch with borrowers. A NAB spokesperson says it has commenced the process ahead of time to ensure it has got in contact with all relevant borrowers before the "three-month checkpoint". Recent figures from the Australian Banking Association reveal that 429,000 borrowers have sought a pause on their repayments since late March.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BANKING ASSOCIATION

Westpac dividend chance good as zero

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Original article by James Frost
The Australian Financial Review – Page: 19 : 6-May-20

Victor German of Macquarie and Matthew Wilson from Evans & Partners are among the analysts who do not expect Westpac to pay an interim dividend for 2019-20. However, German believes that Westpac could pay a final dividend of $0.40 per share, and Wilson forecasts a payout of $0.35. Brendan Sproules of Citigroup is more bullish, forecasting a final dividend of $0.65. Citi has a share price target of $26 for Westpac.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, EVANS AND PARTNERS ASIA FUND – ASX EAF, CITIGROUP PTY LTD