K62 Finance

ANZ compo bill jumps to $1.2bn

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Original article by Joyce Moullakis
The Australian – Page: 21 : 9-Oct-19

The ANZ Bank has advised that its cash profit for the second half of 2018-19 will be marred by an after-tax charge of $559m due to increased provisions for customer-related remediation. ANZ has now announced a total of $1.22bn in after-tax compensation charges since 2017. Australia’s major banks have set aside a combined $7.6bn pre-tax to compensate customers, and Jarrod Martin of Credit Suisse expects this to increase. ANZ will release its financial results for the year to 30 September in late October.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CREDIT SUISSE (AUSTRALIA) LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, MORGANS FINANCIAL LIMITED, CITIGROUP PTY LTD

QE would kill finance and capitalism, McKibbin warns

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Original article by John Kehoe
The Australian Financial Review – Page: 6 : 9-Oct-19

Former Reserve Bank board member Warwick McKibbin has cautioned against any move to reduce implement quantitative easing in Australia. He argues that unconventional monetary policy in Europe is merely propping up financially unsustainable businesses while restricting access to capital for new businesses. He adds that reducing interest rates below a certain level merely distorts capital without providing any economic stimulus. Some economists expect the cash rate to fall to 0.5 per cent in coming months.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK FOR INTERNATIONAL SETTLEMENTS, AUSTRALIAN NATIONAL UNIVERSITY

More work to do for CBA boss

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 8-Oct-19

Commonwealth Bank of Australia CEO Matt Comyn is seeking feedback from customers about what it is doing right and areas in which it can improve. He has sent a letter to customers in which he concedes that CBA still has a lot of work to do to restore its reputation in the wake of a series of scandals. Comyn has also written to employees, stating that amongst other things, the bank must keep listening to customers, complete a remediation program and implement the recommendations of the Hayne royal commission. CBA will provide a live stream of its upcoming customer forum in Brisbane.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RESERVE BANK OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMINSURE

Banks face heat over loyalty tax

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Original article by Patrick Durkin, James Frost, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 2 : 7-Oct-19

Australian Competition & Consumer Commission chairman Rod Sims has suggested that the nation’s banks are trying to "dud" their loyal customers. Sims, who is hoping Treasurer Josh Frydenberg will grant the ACCC’s request to conduct an inquiry into the competitive strength of the big banks, was commenting on the gap between mortgage interest rates offered to new borrowers and those offered to existing customers; the gap is generally half a percentage point. The banks have argued in private that it is not possible to offer the same competitive rates to all borrowers.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, EVANS AND PARTNERS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, DELOITTE TOUCHE TOHMATSU LIMITED

Savers do it tough as banks hold off cuts

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Original article by Jonathan Shapiro, Aleks Vickovich, Jemima Whyte
The Australian Financial Review – Page: 4 : 4-Oct-19

People who rely on interest income from their savings have been hard hit by the Reserve Bank of Australia’s aggressive monetary policy easing. Canstar notes that banks’ 12-month deposit rates have traditionally been about one per cent higher than the cash rate, but this has narrowed to 0.64 per cent. Term deposit rates and online savings account rates have both fallen sharply since the first of three official interest rate cuts in June, and Canstar’s Steve Mickenbecker says there is little scope for further reductions.

CORPORATES
RESERVE BANK OF AUSTRALIA, CANSTAR PTY LTD, UNIVERSITY OF TECHNOLOGY, SYDNEY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP BANK, MACQUARIE GROUP LIMITED – ASX MQG

ING achieves satisfaction ratings above ninety percent despite turbulent year for banking

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Original article by Roy Morgan
Market Research Update – Page: Online : 4-Oct-19

New Roy Morgan data shows that ING’s customer satisfaction rating among Australian home loan customers is 90%, followed by Bendigo Bank (86.9%) and Bankwest (81.6%). ING also has the highest level of customer satisfaction among non-home loan customers, at 92%, followed by Bendigo Bank (88.3%) and Suncorp (85.8%). The Big 4 banks were significantly behind the leaders; taking the Big 4 together, total non-home loan satisfaction is at its highest for over a year (77.8%), while home loan satisfaction is at a six-month high (71.1%). The findings come from the Roy Morgan Single Source survey, the world’s largest continuous source of consumer insights, derived from in-depth face-to-face interviews with over 50,000 Australians each year in their homes.

CORPORATES
ROY MORGAN LIMITED, ING BANK (AUSTRALIA) LIMITED, BENDIGO BANK, SUNCORP BANK

Squeeze on banks a risk to economy

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Original article by Jemima Whyte, Jonathan Shapiro, Aleks Vickovich, Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 4-Oct-19

The ANZ Bank’s chief economist Warren Hogan has rejected claims by Prime Minister Scott Morrison that the nation’s major banks are ‘profiteering’ by failing to pass on the latest official interest rate cut in full to their home loan customers. He says the banks are merely seeking to protect their margins. Meanwhile, the Australian Banking Association has stressed the importance of ‘strong, stable and profitable banks’ to economic growth and the free flow of credit.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF TECHNOLOGY, SYDNEY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, HYPERION ASSET MANAGEMENT LIMITED, UNISUPER LIMITED, IFM INVESTORS PTY LTD, EVANS AND PARTNERS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

RBA inflation goal requires negative rates

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Original article by David Rogers
The Australian – Page: 27 : 3-Oct-19

Andrew Boak, the chief economist at Goldman Sachs, says there is a material risk that the Reserve Bank of Australia will reduce the cash rate to less than 0.5 per cent and implement a quantitative easing program. Boak adds that the central bank’s own macroeconomic model suggests that a negative cash rate would be needed to deliver on its inflation and employment targets over the next 2-3 years. Boak expects the cash rate to be cut by another 25 basis points in November, while financial markets have fully priced in a rate cut by February.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY

Banks blasted for holding back on cuts

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Original article by Joyce Moullakis
The Australian – Page: 17 & 20 : 3-Oct-19

Westpac has reduced its mortgage interest rates by 15 basis points in response to the latest official interest rate cut, while the ANZ Bank has cut its rates by 14 basis points. Prime Minister Scott Morrison and Treasurer Josh Frydenberg have criticised the four major banks for failing to reduce their mortgage rates in line with the 25 basis point reduction in the cash rate. Meanwhile, analysts warn that the banks’ margins will come under pressure due to official interest rate cuts.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, REGAL FUNDS MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, SUNCORP BANK, MACQUARIE BANK LIMITED – ASX MBL, ATHENA HOME LOANS PTY LTD, RATECITY PTY LTD

Billion dollar hit for NAB after ASIC action

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Original article by James Fernyhough
The Australian Financial Review – Page: 15 & 18 : 3-Oct-19

National Australia Bank has advised that its cash earnings for the second half of 2018-19 will fall by about $1.23bn, while its full-year net profit will fall by $1.18bn. This has been attributed to an additional after-tax charge of $832m for its customer remediation program, as well as a change to its software capitalisation policy. NAB’s total provisions for customer remediation in the wake of the fees-for-no-service scandal has now topped $2bn. NAB will release its full-year results on 7 November.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MOODY’S INVESTORS SERVICE INCORPORATED, S&P GLOBAL RATINGS