K62 Finance

Forecasters tipping RBA will cling to its tightening bias

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Original article by Vesna Poljak
The Australian Financial Review – Page: 22 : 4-Feb-19

Andrew Ticehurst of Nomura expects the Reserve Bank of Australia’s board to retain its bias toward tightening monetary policy when it meets on 4 February. Ticehurst also forecasts that the central bank will scale back its economic growth and inflation forecasts. The general consensus of economists is that the RBA will leave the cash rate unchanged at 1.5 per cent throughout 2019, although financial markets have priced in the chance of a rate cut late in the year.

CORPORATES
RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED, RBC CAPITAL MARKETS, WESTPAC BANKING CORPORATION – ASX WBC, MARKET ECONOMICS PTY LTD, AMP CAPITAL INVESTORS LIMITED, INDUSTRY SUPER AUSTRALIA PTY LTD, CAPITAL ECONOMICS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

ASIC to clarify lending rules post Hayne

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 1-Feb-19

The Australian Securities & Investments Commission is expected to issue revised guidelines covering banks and their responsible lending obligations in coming weeks. The new guidelines are expected to be one of the first regulatory responses to the banking royal commission’s final report, which is due to be released on 4 February. The guidelines are likely to state that it is permissible for banks to use technology to help them to make more speedy decisions on loan applications.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED

Fed puts the brakes on interest rates

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Original article by Nick Timiraos
The Australian – Page: 28 : 1-Feb-19

Wall Street rallied and US bond yields fell after the Federal Reserve left the cash rate on hold at its first monetary policy meeting for 2019 and signalled that further rate rises are off the agenda in the near-term. The central bank had increased the federal funds rate in December and flagged two rate rises in 2019. Federal Reserve chairman Jerome Powell has identified a number of potential risks to the US economy that contributed to the decision to announce an interest rate pause.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX, GRANT THORNTON INTERNATIONAL

Satisfaction with banks improving

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Original article by Roy Morgan
Market Research Update – Page: Online : 1-Feb-19

New results from Roy Morgan shows that customer satisfaction with Australia’s banks rose to 78.2% in the six months to December 2018, compared with 78.1% in the six months to November. This in turn was up from 78.0% in October. These two positive months are in contrast to the nine months of declines up to October during the Royal Commission, with satisfaction showing a decline of 3.2% points over this period. Satisfaction with banks remains above the long-term average of 74.3% calculated since 2001 and well up on the 58.7% in January 2001. Of the 10 largest consumer banks, only ING (up 4.1% points) and Bendigo Bank (up 0.5% points) have shown increased satisfaction from prior to the commencement of the Royal Commission. The CBA retains its position of having the highest satisfaction among the big four with 77.1%, ahead of NAB (75.0%), ANZ (74.2%) and Westpac (72.0%). Roy Morgan’s ‘Customer Satisfaction-Consumer Banking in Australia’ is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including over 4,000 bank customers per month.

CORPORATES
ROY MORGAN LIMITED, ING BANK (AUSTRALIA) LIMITED, BENDIGO BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Banks not to blame for house slump

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Original article by James Frost, James Thomson
The Australian Financial Review – Page: 1 & 8 : 31-Jan-19

Westpac CEO Brian Hartzer has refuted suggestions that the bank has become more averse to approving loans as a result of the financial services royal commission. He says Westpac’s loan approval rates remain unchanged, and it is simply that fewer people are applying for loans. He also refutes claims that banks are responsible for the recent decline in house prices, arguing that it is merely an "orderly adjustment" to the housing price cycle. Hartzer adds that further regulation of lenders could prompt more customers to switch to so-called shadow banks.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. PRODUCTIVITY COMMISSION

Rates rise tipped but not soon

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Original article by James Glynn
The Australian – Page: 27 : 31-Jan-19

There is general consensus in financial markets that the Reserve Bank of Australia will keep official interest rates on hold at 1.5 per cent in February. However forme RBA board member John Edwards says the next movement in the cash rate will be up rather than down, although this is will not happen in the near-term. He adds that the RBA’s economic growth and inflation forecasts for 2019 are "quite plausible".

CORPORATES
RESERVE BANK OF AUSTRALIA

Banks under fire: investigations laid bare by regulator

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Original article by Ben Butler
The Australian – Page: 17 & 21 : 30-Jan-19

Documents released by the financial services royal commission show that the Australian Securities & Investments Commission’s enforcement committee approved the prosecution of National Australia Bank for breaching its financial services licence in June 2018. The committee found that NAB had repeatedly failed to comply with laws requiring it to report serious breaches of its licence within 10 days. NAB’s compliance record also came under scrutiny by the royal commission in August.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RIO TINTO LIMITED – ASX RIO, TENNIS AUSTRALIA, FEDERAL COURT OF AUSTRALIA, TRIO CAPITAL LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, VAN EYK CAPITAL PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Next rates move will be up: RBA’s Harper

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Original article by James Glynn
The Australian – Page: 24 : 30-Jan-19

Reserve Bank of Australia board member Ian Harper has downplayed suggestions that the central bank could further reduce the cash rate. He says the strength of the domestic economy means that interest rates will rise, but stresses that this is his personal view. Meanwhile, Harper adds that there are no indications as yet that the downturn in residential property prices has prompted consumers to reduce their spending. Financial markets have priced in a better-than-even chance that the RBA will reduce the cash rate during 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, MELBOURNE BUSINESS SCHOOL, COMMONWEALTH SECURITIES LIMITED

Baird defends NAB interest rate hike

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Original article by Joyce Moullakis
The Australian – Page: 15 & 16 : 25-Jan-19

Sally Tindall of RateCity expects other major banks to increase their mortgage interest rates after National Australia Bank announced a rise in its rates for owner-occupiers and investors. NAB has indicated that a rise in wholesale funding costs was the main driver of the rate hike, but chief customer officer Mike Baird notes that it is the first increase in its standard variable interest rate since March 2017. NAB chose to leave its mortgage rates on hold when other banks lifted theirs in September.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RATECITY PTY LTD, BANK OF QUEENSLAND LIMITED – ASX BOQ, VIRGIN MONEY (AUSTRALIA) PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

RBA will ignore gloom and stay a growth hawk

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Original article by James Glynn
The Australian – Page: 23 : 25-Jan-19

The Reserve Bank of Australia is tipped to scale back its economic growth forecasts for 2019 and 2020, after GDP growth was just 2.8 per cent year-on-year in the December 2018 quarter. The RBA had previously forecast growth of 3.5 per cent for 2018. However, the central bank is expected to maintain its hawkish stance, given that the unemployment rate eased in December. The strong labour market also means an increase in the cash rate is more likely than a cut.

CORPORATES
RESERVE BANK OF AUSTRALIA