K62 Finance

Banks’ big legal year to get busier amid Hayne fallout

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Original article by Misa Han
The Australian Financial Review – Page: 17 : 15-Jan-19

Westpac, National Australia Bank, AMP and IOOF Holdings are among the financial services groups that will be subject to legal action in 2019. Further legal action in the sector is expected in the wake of the financial services royal commission. Josh Mennen of law firm Maurice Blackburn has flagged mortgage lending practices as an area that could attract legal action. There are also indications that the Australian Securities & Investments Commission will be more willing to pursue legal action against banks in 2019.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP LIMITED – ASX AMP, IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, MAURICE BLACKBURN PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, SLATER AND GORDON LIMITED – ASX SGH, GILBERT AND TOBIN LAWYERS, HERBERT SMITH FREEHILLS PTY LTD, FEDERAL COURT OF AUSTRALIA, SUPREME COURT OF NEW SOUTH WALES, SWINBURNE UNIVERSITY OF TECHNOLOGY

Neobanks set for vault into future

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Original article by Richard Gluyas
The Australian – Page: 15 & 16 : 11-Jan-19

Australia’s traditional banks are set to face growing competition from purely digital banks. The majority of banks that have entered the domestic market in the last decade have been foreign owned, but local ‘neobanks’ are changing the status quo. Volt will seek a full banking licence after gaining a restricted licence in May 2018, and the digital bank aims to have a $3m mortgage loan book within three years. Xinja also recently secured a restricted licence, while 86400 is set for a public launch within three months.

CORPORATES
VOLT BANK LIMITED, XINJA BANK LIMITED, 86400 PTY LTD, CUSCAL, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, UP, MONZO, REVOLUT, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BARCLAYS BANK PLC

Banks could face another tough year

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Original article by Sarah Turner
The Australian Financial Review – Page: 17 : 10-Jan-19

The S&P/ASX 200 Banks Index shed 16.5 per cent in 2018, falling to its lowest level in five years. JCP Investment Partners is bearish about the outlook for the sector in 2019, warning that there is a 40-50 per cent chance of a banking crisis. However, Citigroup is more upbeat about the sector, and suggests that bank stocks may have been oversold.

CORPORATES
STANDARD AND POOR’S ASX 200 BANKS INDEX, JCP INVESTMENT PARTNERS LIMITED, CITIGROUP PTY LTD

Satisfaction with banks remains positive and above the long term average

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Original article by Roy Morgan
Market Research Update – Page: Online : 9-Jan-19

New results from Roy Morgan shows that customer satisfaction with Australia’s banks rose to 78.1% in the six months to November 2018, compared with 78.0% in the six months to October. This represents the first positive monthly move in satisfaction since prior to the start of the Finance Royal Commission in January. 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, ING with 88.8% satisfaction (up 3.6% points from January) and Bendigo Bank on 88.5% (up 0.1% point), were the only ones to show improvements in satisfaction during the Royal Commission. Westpac showed the biggest decline (down 5.5% points). The CBA retains its position of having the highest satisfaction among the big four with 76.7%, followed by NAB (74.6%), ANZ (74.3%) and Westpac (72.4%). Roy Morgan’s ‘Customer Satisfaction-Consumer Banking in Australia November Report’ 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

Banks in GST war with ATO

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 2 : 8-Jan-19

The Australian Taxation Office wants to cut the amount of goods and services tax credits that banks and other financial institutions claim for providing home loans, credit cards and transactional accounts. Experts suggest that the ATO’s clampdown could cost each of the big banks between $60 million and $80 million a year, while bank executives acknowledge that it will be very difficult for them to pass on any higher tax costs to customers, given the current poor reputation of the banking sector.

CORPORATES
AUSTRALIAN TAXATION OFFICE, AUSTRALIAN BANKING ASSOCIATION

Fed will take a break from rate hikes: Yellen

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Original article by Joyce Moullakis
The Australian – Page: 13 & 18 : 8-Jan-19

The Federal Reserve raised US interest four times in 2018, and former chair Janet Yellen says another one or two rate rises may be necessary to prevent the economy from overheating. However, Yellen has told a conference in China that she does not expect the central bank to tighten monetary policy again immediately. Yellen’s successor Jerome Powell has signalled that the Federal Reserve will be flexible in its approach to monetary policy in 2019.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, UBS AG, AMERICAN ECONOMIC ASSOCIATION, PEOPLE’S BANK OF CHINA, EUROPEAN CENTRAL BANK, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

UBS, Macquarie top of the dealmaking charts

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 27 : 4-Jan-19

Data from Dealogic shows that UBS displaced Macquarie as Australia’s highest-earning investment bank in 2018, with revenue of $US219m. It was followed by Macquarie with revenue of $US146m and JP Morgan ($US108m). UBS was also the top revenue-earner in terms of mergers and acquisitions activity, handling some $US752m worth of deals in Australasia. JP Morgan generated the most revenue among investment banks globally, at $US6.9bn.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, JP MORGAN AUSTRALIA LIMITED, JP MORGAN AND COMPANY INCORPORATED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF CHINA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED, WESTPAC BANKING CORPORATION – ASX WBC, THE GOLDMAN SACHS GROUP INCORPORATED, MORGAN STANLEY AND COMPANY INCORPORATED, EVERCORE PARTNERS, MOELIS AND COMPANY, CENTERVIEW

Regulation slows loans: bank chief

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Original article by Eli Greenblat
The Australian – Page: 1 & 2 : 4-Jan-19

Westpac chairman Lindsay ­Maxsted says the banking major is continuing to lend, but increased regulation of the sector means it is taking longer to approve loans. Maxsted adds that the focus on responsible lending obligations could have an adverse impact on the Australian economy. A number of business leaders have expressed similar concerns, and they have backed a call by federal Treasurer Josh Frydenberg for banks to keep providing access to credit.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE TREASURY, SOUTH32 LIMITED – ASX S32, ANSELL LIMITED – ASX ANN, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN AGRICULTURAL COMMODITIES PTY LTD, NUFARM LIMITED – ASX NUF, KPMG AUSTRALIA PTY LTD

Revenge of machines: dollar’s flash crash to 10-year low

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Original article by Michael Roddan
The Australian – Page: 15 & 20 : 4-Jan-19

The Australian dollar fell to $US0.6741 early in local trading on 3 January, its lowest level since 2009. The so-called ‘flash crash’ event was attributed to algorithmic trading. However, the currency recovered much of the lost ground and was fetching $US0.6968 late in the local trading session. Asian currencies, the US dollar and the British pound also fell sharply. Treasurer Josh Frydenberg says many factors influence the direction of the Australian dollar, noting that it is the world’s fifth-most traded currency.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, PEPPERSTONE GROUP LIMITED

Cashed-up PE firms warned on overpaying

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Original article by Bo Seo, Jemima Whyte
The Australian Financial Review – Page: 13 & 15 : 3-Jan-19

Data from the Australian Private Equity & Venture Capital Association shows that the private equity sector completed $6.9bn worth of deals in 2018. Private equity firms have an additional $9.7bn available for acquisitions in 2019. However, Quadrant Private Equity’s executive chairman Chris Hadley says they must avoid paying too much, particularly for lower-quality assets. Meanwhile, experts say the private equity sector’s business model is changing, with more funds opting to partner with super funds and other institutional investors.

CORPORATES
AUSTRALIAN PRIVATE EQUITY AND VENTURE CAPITAL ASSOCIATION LIMITED, QUADRANT PRIVATE EQUITY PTY LTD, TPG CAPITAL LP, PACIFIC EQUITY PARTNERS PTY LTD, GREENCROSS LIMITED – ASX GXL, PETCO ANIMAL SUPPLIES INCORPORATED, TRANSURBAN GROUP LIMITED – ASX TCL, WESTCONNEX, KKR AND COMPANY LP, MYOB GROUP LIMITED – ASX MYO, BGH CAPITAL PTY LTD, AUSTRALIANSUPER PTY LTD, HEALTHSCOPE LIMITED – ASX HSO, NAVITAS LIMITED – ASX NVT, THE CARLYLE GROUP, CAMPBELL INTERNATIONAL, GOLDMAN SACHS AUSTRALIA PTY LTD