K62 Finance

Building Society and Credit Union customer satisfaction? You can bank on it

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Original article by Roy Morgan
Market Research Update – Page: Online : 2-Oct-19

New research by Roy Morgan shows that customer satisfaction with building societies and credit unions was 89.8% in the six months to August 2019, compared with a 76.7% customer satisfaction rating for Australia’s four major banks. In stark contrast to the banks, the financial services royal commission resulted in only a minor dent in the satisfaction ratings of building societies and credit unions. Meanwhile, Newcastle Permanent Building Society has won the monthly customer satisfaction award for August, with a rating of 92%, ahead of Credit Union Australia (91%) and People’s Choice Credit Union (88%). These findings come from the Roy Morgan Single Source survey, which is based on in-depth face-to-face interviews with over 50,000 Australians each year in their homes.

CORPORATES
ROY MORGAN LIMITED, NEWCASTLE PERMANENT BUILDING SOCIETY LIMITED, CREDIT UNION AUSTRALIA LIMITED, PEOPLE’S CHOICE CREDIT UNION

Major banks hit as credit growth stalls

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Original article by Joyce Moullakis
The Australian – Page: 17 & 28 : 1-Oct-19

Official data shows that annual growth in credit fell to an eight-year low of 2.9 per cent in the year to August, after rising by just 0.2 per for the month. Housing credit and business credit also increased by 0.2 per cent in August, with growth of 3.1 per cent and 3.4 per cent respectively for the year to August. Ed Henning of CLSA anticipates a slight improvement in credit growth in coming months, although Chris Read of Morgan Stanley says credit growth is unlikely to rebound in the near-term unless there is an upturn in housing turnover as well as prices.

CORPORATES
CLSA AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, SWITZER ASSET MANAGEMENT LIMITED, MST MARQUEE, UBS HOLDINGS PTY LTD, 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, MACQUARIE GROUP LIMITED – ASX MQG

Profit-taking possible even with interest rate cut

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Original article by David Rogers
The Australian – Page: 28 : 1-Oct-19

Most economists expect the Reserve Bank of Australia to reduce the cash rate to 0.75 per cent on 1 October, and there is widespread expectation that it will fall to 0.5 per cent by February. Financial markets have priced in an 80 per cent chance of a rate cut in October. Although a rate cut is by no means certain, the Australian dollar could rally if the RBA opts to leave rates on hold, and subsequent profit-taking could see the local sharemarket retreat in the near-term. However, the RBA could potentially hold off on easing monetary policy until the outcome of the upcoming US-China trade talks.

CORPORATES
RESERVE BANK OF AUSTRALIA

RBA to cut twice more to 0.5pc, say economists

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Original article by Sarah Turner
The Australian Financial Review – Page: 1 & 22 : 30-Sep-19

A quarterly survey of economists shows that there is general consensus that the Reserve Bank of Australia will reduce the cash rate to 0.5 per cent by mid-2020. Most of the respondents expect official interests to be cut by 25 basis points before the end of 2019, followed by another cut by June. However, Shane Oliver of AMP Capital and Alan Oster of National Australia Bank expect a cash of 0.5 per cent at the end of 2019. Futures markets have priced in a 76 per cent chance of a rate cut on 1 October, and fully priced in a rate cut in November.

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

Savings rate hit as banks brace for interest pain

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Original article by Samantha Bailey
The Australian – Page: 17 & 27 : 26-Sep-19

Data from RateCity shows that ANZ, Westpac and ING are among the banks that have reduced their savings rates by up to 25 basis points in the last fortnight. RateCity also notes that the average savings rate is now 1.1 per cent; this compares with 1.57 per cent in May, prior to the Reserve Bank’s back-to-back official interest rate cuts. With the central bank widely tipped to ease monetary policy again in October, Credit Suisse estimates that banks’ at-call deposit rates would have to fall by about 51 basis points to offset the earnings impact of passing the full cash rate cut on to mortgage borrowers.

CORPORATES
RATECITY PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, ING BANK (AUSTRALIA) LIMITED, AMP BANK LIMITED, RESERVE BANK OF AUSTRALIA, CREDIT SUISSE (AUSTRALIA) LIMITED, MYSTATE LIMITED – ASX MYS, BANK OF QUEENSLAND LIMITED – ASX BOQ

Economists raise chances of QE

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Original article by David Rogers
The Australian – Page: 17 & 27 : 26-Sep-19

UBS’s chief economist George Tharenou says there is a growing possibility that the Reserve Bank of Australia will have to resort to unconventional monetary policy options. He says the US Federal Reserve is likely to reduce official interest rates by another one per cent over the next year, as US economic growth slows due to the latest round of tariff hikes. This in turn will put pressure on the RBA to further ease monetary policy, and potentially resort to measures such as quantitative easing. Tharenou expects the RBA to reduce the cash rate to just 0.25 per cent by May 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

CBA cut heats up home loan war

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Original article by Duncan Hughes
The Australian Financial Review – Page: 12 : 25-Sep-19

The Commonwealth Bank of Australia will reduce its interest rates on a range of mortgage loans for owner-occupiers and property investors. The rate cuts range from 10 basis points to 90 basis points, and apply to loan periods ranging from one to five years. Mortgage brokers say the move suggests that CBA expects the Reserve Bank to further ease monetary policy. Westpac recently announced a reduction in its mortgage loan serviceability floor.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF NEW SOUTH WALES

Westpac dividend under pressure

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 23-Sep-19

There is growing speculation that Westpac could reduce its dividend payout in response to the Reserve Bank of New Zealand’s new capital requirements. Westpac has yet to determine the size of its final dividend for 2018-19, but Credit Suisse has forecast both a lower payout and a capital raising of at least $1.5bn when Westpac releases its full-year results in early November. The prospect of further official interest rate cuts in Australia is also weighing on the earnings of the nation’s banks.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF NEW ZEALAND, CREDIT SUISSE (AUSTRALIA) LIMITED, CITIGROUP PTY LTD, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, EVANS AND PARTNERS ASIA FUND – ASX EAF, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, PM CAPITAL LIMITED

Westpac gives itself 12 months to replace CFO

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Original article by Tim Boyd
The Australian Financial Review – Page: 20 : 13-Sep-19

Westpac announced on 12 September that chief financial officer Peter King will retire in 2020, with King having joined Westpac from Deloitte in 1994. King became deputy CFO in 2011 and CFO in 2014, replacing Phil Coffey. King says that Westpac has transformed itself in the time that he has been there, while UBS banking analyst Jonathan Mott said that whomever Westpac chooses to replace King "will have some big boots to fill". Westpac CEO Brian Hartzer thanked King for his significant contribution to the company.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, DELOITTE TOUCHE TOHMATSU LIMITED

Bank bosses need a reality check

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Original article by James Frost
The Australian Financial Review – Page: 1 & 6 : 12-Sep-19

Former regulator Graeme Samuel told a parliamentary hearing on 11 September that the ANZ needs a "reality check". Samuel was responding to questions about his review of the Australian Prudential Regulation Authority (APRA), with Samuel noting that the ANZ was one of 32 entities that have chosen not to make their prudential self-assessment public. He said that the National Australia Bank had set the benchmark by releasing its self-assessment in late 2018, and that the ANZ should be compelled to submit to a snap inquiry if it did not release its review.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY NATIONAL AUSTRALIA BANK LIMITED – ASX NAB WESTPAC BANKING CORPORATION – ASX WBC