K62 Finance

The share of mortgage holders At Risk of mortgage stress fell in July after the Stage 3 tax cuts

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Aug-24

New research from Roy Morgan shows that 1,604,000 mortgage holders (29.8%) were ‘At Risk’ of ‘mortgage stress’ in the three months to July 2024. This represents a decrease of 0.5% points on the June figures after the introduction of the Stage 3 tax cuts in July increased household income for millions of Australians, including many mortgage holders. The level of mortgage holders ‘At Risk’ of mortgage stress is set to fall further over the next few months. However, a reduction in mortgage stress will not happen if the Reserve Bank board decides to raise interest rates at its next meeting in September. The number of Australians ‘At Risk’ of mortgage stress has increased by 797,000 since May 2022, when the RBA began a cycle of interest rate increases. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 982,000 (18.9% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.5%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

Traders gird for dangerous 48 hours

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Original article by Sarah Jones
The Australian Financial Review – Page: 27 : 31-Jul-24

Bond market pricing suggests that there is about a 20 per cent chance that the Reserve Bank of Australia will increase the cash rate in August. The chances of a rate rise in September are now 31 per cent. Quarterly CPI data to be released on Wednesday is likely to be a key factor in the RBA’s monetary policy decision; the central bank’s preferred measure of trimmed mean inflation is tipped to ease from one per cent to 0.9 per cent. Investors will also be keenly awaiting the outcome of the US Federal Reserve’s two-day policy meeting, and signs that rate cuts are on its agenda in coming months.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Longo suspects ANZ broke law

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Original article by Ronald Mizen, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 6 : 24-Jul-24

Australian Securities & Investments Commission chairman Joe Longo has responded to claims by ANZ CEO Shayne Elliott regarding the bank’s government bond scandal. Elliott said ANZ does not believe that there was any wrongdoing on its part, and ASIC has simply asked it to "please explain" some "unusual activity" in the bond market in April 2023. However, Longo says it is on the public record that ASIC is investigating the bond trades, adding that this means by definition that the corporate regulator suspects a breach of the law. Longo has also advised that ASIC has established a dedicated insider trading team.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

ASIC warned over ANZ-AOFM probe

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Original article by David Ross
The Australian – Page: 15 & 19 : 23-Jul-24

The Australian Securities & Investments Commission is investigating allegations that ANZ traders manipulated a $14 billion placement of federal government securities in April 2023. ANZ only informed investors in May that it was facing an investigation by ASIC, but documents obtained under a Freedom of Information request show that the Australian Office of Financial Management shared over 20 documents concerning the ANZ with ASIC between Jaunary and May; one of the documents reveals that ASIC demanded information about past risk manager reports on 29 January.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT

Mortgage stress increased in June, but set to ease in the months ahead after the Stage 3 tax cuts

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Original article by Roy Morgan
Market Research Update – Page: Online : 23-Jul-24

New research from Roy Morgan shows that 1,602,000 mortgage holders (30.3%) were ‘At Risk’ of ‘mortgage stress’ in the three months to June 2024. This represents an increase of 88,000 (+0.6%) on a month earlier, but is below the record highs reached earlier this year. The RBA left interest rates on hold during its June board meeting, and there is no RBA board meeting in July. The level of mortgage holders ‘At Risk’ of ‘mortgage stress’ in June is set to fall over the next few months after the Stage 3 income tax cuts were introduced from the start of July. Compared to May 2022, when the RBA began a cycle of interest rate increases, the number of Australians ‘At Risk’ of mortgage stress has increased by 795,000. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 1,016,000 (20.0% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.5%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

Macquarie Bank has the wealthiest customers

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Original article by Roy Morgan
Market Research Update – Page: Online : 10-Jul-24

New financial data from Roy Morgan’s Wealth Report shows that among the larger banks, Macquarie has the wealthiest customers. Macquarie customers’ net wealth per capita is a market leading $943,000. Macquarie customers have higher incomes than customers of other large banks, and they are also the most likely to own or to be paying off homes, the main source of Australians’ wealth. In second place is St George with net wealth per capita of $662,000. St George’s customers are centred in Sydney where housing prices are the highest in the country, contributing to that city having greater per capita wealth than elsewhere in Australia. In third please is Westpac, with net wealth per capita of $646,000, the highest of the top four banks. Westpac customers are more likely to own property than customers of the other top four banks. They are also older and more likely to be Baby Boomers, giving them more time to have accumulated wealth. Meanwhile, the Commonwealth Bank has the lowest net wealth per capita of the banks reported ($474,000). Its customers are more likely to be Gen Z than customers of the other large banks. The latest data covers the 12 months to March 2024. Over this period net wealth per capita among all Australians aged 14+ stood at $503,000. Net wealth per capita is often below average among customers of the smaller regional banks and credit unions.

CORPORATES
ROY MORGAN LIMITED, MACQUARIE BANK LIMITED – ASX MBL, ST GEORGE BANK LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Analysts warn on bank growth

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Original article by Cliona O’Dowd
The Australian – Page: 19 : 9-Jul-24

The share prices of Australia’s big four banks have risen strongly over the past 12 months, but Macquarie analysts have warned that the earnings outlook for the Commonwealth Bank, the ANZ, Westpac and the National Australia is weak. They note that the likelihood of there being a softer landing for the broader economy has diminished, and that extremely low impairment charges will hinder their earnings recovery in the medium term; Macquarie is underweight the banking sector over that period.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE GROUP LIMITED – ASX MQG

Average home loan surges to record high

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 30 : 9-Jul-24

Data from the Australian Bureau of Statistics shows that the average new home loan for owner-occupiers reached a record high of $626,055 nationally in May. The average size of new home loans reached fresh highs in Queensland, South Australia and Western Australia in May. NSW still boasts the nation’s highest average home loan, at $767,584; however, this is below the state’s peak of $803,235 in early 2022. In contrast, the average home loan in Victoria fell to $601,891 in May, compared with a peak of $651,364 in 2022. Sally Tindall of RateCity notes that home buyers are taking out bigger mortgage loans than ever, despite the cash rate rising to its highest level in 12 years.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RATECITY PTY LTD

Dead bank customers still charged fees

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 3-Jul-24

The ANZ Bank says it has significantly increased the number of employees who manage deceased estates cases, after it was formally sanctioned for charging fees to customers who had passed away. The Banking Code Compliance Committee’s chairman Ian Govey says it generally only sanctions banks for the most serious and systemic breaches of the Banking Code of Practice, and ANZ’s non-compliance justified such action. ANZ has paid remediation of $3.2 million to 18,852 deceased estates since early 2024.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANKING CODE COMPLIANCE COMMITTEE

Defying gravity: CBA prepares to take on Wall Street’s biggest banks

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Original article by Eric Johnston
The Australian – Page: 13 & 21 : 2-Jul-24

The Commonwealth Bank of Australia is now the world’s 13th largest bank in terms of market capitalisation. CBA now boasts a market cap of $211bn ($US140.7bn), ranking it above global rivals such as Citi; it is also within reach of making the list of the world’s 10 biggest banks. The rise of CBA is particularly impressive given that it remains largely focused on the Australian market, with its international operations limited to a small subsidiary in New Zealand. It is also not regarded as a globally systemically important bank, which is generally a prerequisite for ranking amongst the 10 biggest banks.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA