K62 Finance

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

Big banks weather deposit storm

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Original article by James Frost
The Australian Financial Review – Page: 16 : 18-Jun-19

Westpac and the ANZ Bank elected not to pass on the full extent of the recent cut in official interest rates to their mortgage loan customers. As a result, they have not yet made changes to their deposit rates for retail customers, which is good news for customers who use interest from their accounts to help bolster their income. However, banks cannot maintain a gap between their mortgage rates and their deposit rates for too long, as this impacts on their bottom line.

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, RESERVE BANK OF AUSTRALIA, ISELECT LIMITED – ASX ISU, MACQUARIE BANK LIMITED – ASX MBL

Australian government bonds forecast to fall below 1pc

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Original article by Sarah Turner
The Australian Financial Review – Page: 13 & 16 : 18-Jun-19

The yield on 10-year Australian government bonds recovered slightly to 1.39 per cent on 17 June, after falling to a record low of 1.37 per cent in the previous week. Concern about the global economic outlook is weighing on bond yields worldwide, and Sally Auld of JP Morgan says the current bearish environment could see Australia’s 10-year bond yield fall below one per cent by the end of 2019. Steve Miller of Grant Samuel Funds Management says the expectation of further official interest cuts is putting downward pressure on local bond yields.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, GRANT SAMUEL FUNDS MANAGEMENT PTY LTD, ARDEA INVESTMENT MANAGEMENT PTY LTD, RESERVE BANK OF AUSTRALIA

Stockmarket boosted as Prospa prospers on debut

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Original article by Joyce Moullakis
The Australian – Page: 21 : 12-Jun-19

Prospa Group’s joint CEO Beau Bertoli is upbeat about the outlook for the small business lending market, despite the slowing Australian economy. The fintech specialises in loans of between $5,000 and $300,000, and Bertoli say there is a lot of unmet demand for small business loans. Prospa’s shares peaked at $4.55 on the stock’s first day of trading on 11 June, having been issued at $3.78. Prospa has forecast a pro-forma net loss of $1.5m for fiscal 2019.

CORPORATES
PROSPA GROUP LIMITED – ASX PGL, REFINITIV, QUALITAS REAL ESTATE INCOME FUND – ASX QRI, LIFE360 INCORPORATED – ASX 360

Savers to be slugged $1.3b by rate cut

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

Data from Canstar shows that smaller banks have reduced their interest rates on at-call cash accounts by up to 30 basis points in the wake of the Reserve Bank’s official interest rate cut. The four major banks have yet to reduce their own rates on at-call accounts, but Finder’s Graham Cooke warns that is only a matter of time. It is estimated that savers’ income from the interest on at-call accounts will be slashed by around $1.3bn if the official interest rate cut is passed on in full.

CORPORATES
CANSTAR PTY LTD, RESERVE BANK OF AUSTRALIA, FINDER.COM.AU, AMP BANK LIMITED, SUNCORP BANK, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MACQUARIE CREDIT UNION LIMITED, RATECITY PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC

Banks not passing on cut nothing new: Treasury

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Original article by Matthew Cranston, James Eyers
The Australian Financial Review – Page: 4 : 7-Jun-19

Westpac and ANZ have been criticised for withholding part of the Reserve Bank’s official interest rate cut. The central bank has cut the cash rate a total of 19 times since 2008, and analysis by the Treasury shows that there have been 13 occasions when at least one of the four major banks failed to pass on the full rate. The banks have also reduced their rates by a higher margin than the official interest rate cut on several occasions since the global financial crisis.

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

Ex-RBA deputy queries rate cut

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 6 : 6-Jun-19

Stephen Grenville was the Reserve Bank of Australia’s deputy governor when it introduced inflation targeting in 1996. However, he has questioned whether the inflation target of 2-3 per cent is still necessary, as well as the central bank’s decision to reduce the cash rate to a record low of 1.25 per cent. Grenville argues that there needs to be more focus on the role of fiscal policy in stimulating the economy. Inflation has been below the RBA’s target range for several years, but governor Philip Lowe says there is no need for any changes to the monetary policy framework at present.

CORPORATES
RESERVE BANK OF AUSTRALIA, LOWY INSTITUTE FOR INTERNATIONAL POLICY, OUTLOOK ECONOMICS, AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND

Banks defy the Treasurer, RBA

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Original article by Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 5-Jun-19

Federal Treasurer Josh Frydenberg has criticised the ANZ Bank for reducing its variable mortgage interest rates by just 0.18, after the Reserve Bank of Australia cut the cash rate by 0.25 per cent to a record low of 1.25 per cent. Westpac has cut its variable rates by 0.20 per cent, while National Australia Bank and the Commonwealth Bank have passed the central bank’s full rate cut on to customers. RBA governor Philip Lowe also says the major banks should reduce their mortgage rates by the full amount, given that their wholesale funding costs have fallen significantly.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, JP MORGAN AUSTRALIA LIMITED