K62 Finance

Dollar dives as RBA keeps door open on rate cut

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Original article by David Rogers
The Australian – Page: 17 & 27 : 7-Feb-19

Reserve Bank of Australia governor Philip Lowe adopted a more dovish tone on monetary policy on 6 February. He used a National Press Club speech in Sydney to indicate that the RBA has the flexibility to reduce the cash rate if the outlook for unemployment and inflation makes such a move appropriate. The RBA had signalled in December that interest rates are more likely to rise than to fall. Lowe also said that the downturn in house prices is unlikely to affect economic growth.

CORPORATES
RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

NAB bosses dig in: we’ll fix culture

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Original article by Joyce Moullakis
The Australian – Page: 1 & 5 : 6-Feb-19

Brett Le Mesurier of Shaw & Partners expects National Australia Bank CEO Andrew Thorburn to resign by the end of February, followed by chairman Ken Hendy later in the year. However, Thorburn has indicated that he will remain in his role despite attracting criticism in the final report of the financial services royal commission. He also says NAB will review and revise its strategy to improve its culture and governance.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, SHAW AND PARTNERS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI

Next rates move still up, RBA insists

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Original article by David Rogers, James Glynn
The Australian – Page: 19 & 28 : 6-Feb-19

The Reserve Bank of Australia has downgraded its forecast for economic growth in 2019 from 3.25 per cent to around three per cent, after leaving the cash rate unchanged at 1.5 per cent. The central bank has also advised that it now expects the unemployment rate to fall to around 4.75 per cent over the next several years, while it forecasts an underlying inflation rate of two per cent in 2019. Analysts expect official interest rates to remain on hold for some time.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK, AUSTRALIAN BUREAU OF STATISTICS

NAB singled out for most Hayne pain

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Original article by James Thomson
The Australian Financial Review – Page: W1 & W4 : 5-Feb-19

Key executives of National Australia Bank have been criticised in the financial services royal commission’s final report, including CEO Andrew Thorburn and chairman Ken Hendry. Commissioner Kenneth Hayne says the appearances of Thorburn and Henry before the inquiry raised questions as whether NAB had learnt from its past mistakes with regard to the fee-for-no-service scandal. However, Hayne noted that the evidence of Commonwealth Bank CEO Matt Comyn and ANZ counterpart Shayne Elliott showed that they understand the challenges that their banks face.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

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