K62 Finance

RBA to cut twice more, say economists

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Original article by Patrick Commins
The Australian Financial Review – Page: 1 & 18 : 1-Jul-19

A quarterly survey of economists shows that there is a widely held expectation that the Reserve Bank of Australia will reduce official interest rates two more times during 2019. This would reduce the cash rate to 0.75 per cent, but David Plank of the ANZ Banks says further rate cuts could be necessary, depending on the outlook for the global economy and the Australian dollar. David Bassanese of BetaShares says the RBA would be unlikely to take the cash rate below 0.5 per cent, and it would probably opt for quantitative easing instead. Many economists expect a rate cut on 2 July.

CORPORATES
RESERVE BANK OF AUSTRALIA, BETASHARES CAPITAL LIMITED, ST GEORGE BANK LIMITED, BIS OXFORD ECONOMICS PTY LTD, AMP CAPITAL INVESTORS LIMITED, MOODY’S ANALYTICS AUSTRALIA PTY LTD, RBC CAPITAL MARKETS, DEUTSCHE BANK AG, INDUSTRY SUPER AUSTRALIA PTY LTD

Banks to lift their game with new code

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Original article by David Rogers
The Australian – Page: 17 & 20 : 1-Jul-19

The Australian Banking Association’s updated Banking Code of Practice comes into effect on 1 July, and CEO Anna Bligh says it is an "important step" in restoring consumers’ trust in banks following the Hayne royal commission. The revised code will provide increased protection for consumers, and require banks to treat them fairly. The first phase of the open banking regime also commences on 1 July.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, VOLT BANK LIMITED, FINANCIAL COUNSELLING AUSTRALIA LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY, AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY

History suggests rate cut in July unlikely

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Original article by Matthew Cranston
The Australian Financial Review – Page: 12 : 28-Jun-19

Financial markets have priced in a 72 per cent chance that the Reserve Bank of Australia will reduce the cash rate by 25 basis points in July. However, analysis shows that the central bank has reduced the cash rate in two consecutive months on just 12 of the 46 occasions on which it has eased monetary policy since 1990. The RBA has not reduced the cash rate in two consecutive months since 1992, when there were concerns about the outlook for the global economy. Chris Read of Morgan Stanley says an easing pause in July would enable the RBA to pursue a gradual cutting cycle.

CORPORATES
RESERVE BANK OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

ANZ squeezes savers more than borrowers

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Original article by James Frost
The Australian Financial Review – Page: 21 : 27-Jun-19

The ANZ Bank has defended its decision to reduce the interest rates on its popular ANZ Progress Saver and ANZ Online Saver accounts by 20 basis points. A spokesman says ANZ still has the best interest rates for comparable products among Australia’s major banks. Sally Tindall of RateCity warns that savers can expect interest rates to fall further, given that the Reserve Bank is tipped to reduce the cash rate again. ANZ reduced its mortgage interest rates by 18 basis points after the official interest rate cut in early June.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RATECITY PTY LTD, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UBANK, AUSTRALIA. DEPT OF THE TREASURY

Risks build as central banks push on a string

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Original article by David Rogers
The Australian – Page: 27 : 26-Jun-19

There is a growing view that further monetary policy easing will do little to stimulate economic growth. Expectations of further interest rate cuts have seen Australia’s All Ordinaries Index gain 18 per cent so far in 2019. Matthew Brooks of Macquarie Group notes that the Australian sharemarket rose by an average of 12 per cent after the first interest rate cut in eight of the 11 easing cycles since 1971, while the S&P 500 was up at least 10 per cent a year. The other three easing cycles coincided with recessions.

CORPORATES
STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, STANDARD AND POOR’S 500 INDEX, MACQUARIE GROUP LIMITED – ASX MQG, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, UNITED STATES. FEDERAL RESERVE BOARD, MORGAN STANLEY AUSTRALIA LIMITED

Westpac admits to being less mature on non-financial risks

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Original article by Richard Gluyas
The Australian – Page: 21 : 25-Jun-19

Westpac has begun to implement the recommendations arising from a self-assessment of its culture and governance, while it will also take on board any feedback from the Australian Prudential Regulation Authority. APRA requested the major banks to undertake a self-assessment in the wake of governance scandals at the Commonwealth Bank. Westpac has not released the full report of its self-assessment, but shareholders have been told that the review showed that its management of non-financial risks can be improved.

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

RBNZ orders independent reviews of ANZ

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Original article by Joyce Moullakis
The Australian – Page: 21 : 25-Jun-19

The Reserve Bank of New Zealand has commissioned reviews of the ANZ Bank’s compliance with capital requirements and governance standards. The independent reviews follow the recent departure of the bank’s New Zealand CEO David Hisco after a review of his personal expense claims. Meanwhile, Mark Nathan of Regal Funds Management expects the central bank to make changes to its proposed overhaul of Australian banks’ capital requirements in response to feedback from the industry.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ANZ NATIONAL BANK LIMITED, RESERVE BANK OF NEW ZEALAND, REGAL FUNDS MANAGEMENT PTY LTD, NEW ZEALAND. FINANCIAL MARKETS AUTHORITY

Banks suffer as battle for home loans heats up

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Original article by Samantha Bailey
The Australian – Page: 21 : 20-Jun-19

Data from the Australian Prudential Regulation Authority shows that home loan approvals fell by 16.5 per cent year-on-year in the March quarter. The figures also show that the value of mortgage loans written by Australia’s major banks increased by just 2.6 per cent over the last year, compared with growth of eight per cent for customer-owned banks. The total assets of the latter increased by 1.6 per cent quarter-on-quarter, while the assets of the ‘big four’ banks declined by 0.4 per cent.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CUSTOMER OWNED BANKING ASSOCIATION

RBA signals more rate cuts needed

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Original article by David Rogers
The Australian – Page: 17 & 24 : 19-Jun-19

The minutes from the Reserve Bank of Australia’s monthly board meeting show that it expects to further reduce official interest rates in coming months. Gareth Aird of the Commonwealth Bank anticipates rate cuts in August and November, when the central bank updates the economic forecasts in its quarterly monetary policy statements. Tom Kennedy of JP Morgan also expects a rate cut in August, although he says July remains a possibility.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, JP MORGAN AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, STANDARD AND POOR’S 500 INDEX, MSCI WORLD INDEX, UNITED STATES. FEDERAL RESERVE BOARD

Search narrows for new NAB boss

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

National Australia Bank has declined to comment on progress regarding its search for a successor to former CEO Andrew Thorburn. However, sources have indicated that the shortlist of candidates has been trimmed and NAB has commenced a detailed assessment of internal candidates, who include Mike Baird and Anthony Healy. Thorburn stepped down in the wake of the Hayne royal commission, while NAB chairman Ken Henry will depart when a new CEO is appointed.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RUSSELL REYNOLDS ASSOCIATES INCORPORATED, MEDIBANK PRIVATE LIMITED – ASX MPL, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, ROYAL BANK OF SCOTLAND GROUP PLC, BANK OF IRELAND PLC, MACQUARIE GROUP LIMITED – ASX MQG, AMP LIMITED – ASX AMP