K62 Finance

Move likely to delay RBA hike

roymorgansocial Leave a comment

Original article by Ronald Mizen
The Australian Financial Review – Page: 7 : 31-Aug-18

Data from Bloomberg shows that financial markets view the chances of a reduction in the cash rate by the end of 2019 to be just 58.7 per cent in the wake of Westpac’s out-of-cycle increase in its variable mortgage interest rates. Shane Oliver of AMP Capital says the other major banks are likely to follow, which will in turn mean that the Reserve Bank is likely to leave the cash rate on hold until least 2020. Oliver and David Bassanese of Betashares Capital also suggest that the central bank could potentially reduce the cash rate if Westpac’s rivals increase their interest rates.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, BETASHARES CAPITAL LIMITED, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, BIS OXFORD ECONOMICS PTY LTD, CANSTAR PTY LTD, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, RAMS HOME LOANS PTY LTD

CBA may need a rethink on dividend

roymorgansocial Leave a comment

Original article by Sarah Turner
The Australian Financial Review – Page: 31 : 30-Aug-18

Analysts suggest that the Commonwealth Bank may have to reduce its dividend payout if it proceeds with the demerger of CFS Group. Shareholders received a total dividend of $4.31 per share for the 2017-18 financial year, but Richard Wiles of Morgan Stanley estimates that this could fall to around $4 per share if its wealth management and mortgage broking assets are demerged. However, Andrew Martin of Alphinity Investment Management does not expect the bank to reduce its dividend in the near-term.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CFS GROUP, MORGAN STANLEY AUSTRALIA LIMITED, ALPHINITY INVESTMENT MANAGEMENT PTY LTD, JP MORGAN AUSTRALIA LIMITED, CLIME ASSET MANAGEMENT PTY LTD, PLATYPUS ASSET MANAGEMENT PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC

Costello slams ASIC for banks’ appalling acts

roymorgansocial Leave a comment

Original article by Joanna Mather, Jonathan Shapiro
The Australian Financial Review – Page: 11 : 30-Aug-18

Future Fund chairman Peter Costello says the banking royal commission should look into the failings of the Australian Securities & Investments Commission in responding to misconduct in the financial services sector. The former federal treasurer argues that while the misconduct of banks has been appalling, ASIC bears some responsibility for allowing it to occur. Costello forecasts that the royal commission will result in lower profits in the banking sector, while financial advice will cost more and it will become harder to obtain credit.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Rates on the rise: Westpac takes first shot with interest hike

roymorgansocial Leave a comment

Original article by Michael Roddan, Adam Creighton
The Australian – Page: 1 & 2 : 30-Aug-18

Sally Tindall of RateCity expects Westpac’s major rivals to quickly follow its lead in announcing an increase in its mortgage interest rates. Westpac has cited higher funding costs for its decision to increase the rates on interest-only and principal-and-interest loans for owner-occupiers and property investors from 19 September. Westpac CEO Brian Hartzer says the bank is of the view that higher funding costs are likely to be sustained for some time. The Reserve Bank has not increased official interest rates since August 2016.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RATECITY PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RESERVE BANK OF AUSTRALIA, MACQUARIE GROUP LIMITED – ASX MQG, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AMP BANK LIMITED, BANK OF QUEENSLAND LIMITED – ASX BOQ, ING DIRECT, ME BANK, SUNCORP BANK, CITIGROUP PTY LTD, BEYOND BANK AUSTRALIA, AUSWIDE BANK LIMITED – ASX ABA, MYSTATE LIMITED – ASX MYS, QBANK, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIAN LABOR PARTY

ASIC warns CBA on reverse mortgages

roymorgansocial Leave a comment

Original article by James Eyers
The Australian Financial Review – Page: 19 : 29-Aug-18

Lending standards in the reverse mortgage sector have come under scrutiny by the Australian Securities & Investments Commission, which has expressed concern that some lenders have adopted a "tick the box" approach to approving such loans. The Commonwealth Bank and its Bankwest subsidiary are the leading providers of reverse mortgages, which tend to be popular with older people. Demand for such products is expected to increase due to Australia’s ageing population.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BANKWEST, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, HEARTLAND SENIORS FINANCE, AUSTRALIA. PRODUCTIVITY COMMISSION

APRA prepares to approve three new banks

roymorgansocial Leave a comment

Original article by James Eyers
The Australian Financial Review – Page: 26 : 28-Aug-18

There is speculation that the Australian Prudential Regulation Authority could grant full banking licences to fintech start-ups Volt Bank, 86400 and Judo Capital by the end of 2018. They would be subject to the same capital requirements as other banks, while gaining the trust of consumers will be a challenge. However, they should benefit from a lack of legacy IT systems and branch networks, as well as negative sentiment toward traditional banks in the wake of the royal commission.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, VOLT BANK LIMITED, 86400 PTY LTD, JUDO CAPITAL PTY LTD, 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

NAB operations boss quits as Baird firms for top job

roymorgansocial Leave a comment

Original article by James Eyers
The Australian Financial Review – Page: 15 & 18 : 28-Aug-18

Former New South Wales premier Mike Baird is now regarded as the leading internal candidate to eventually succeed National Australia Bank CEO Andrew Thorburn. COO Antony Cahill had been seen as a potential successor, but he will leave the bank in mid-September to take up a role at Visa in the UK. Andrew Hagger was also regarded as a contender to replace Thorburn, but he attracted scrutiny by the banking royal commission over the fee-for-no-service scandal. External candidates are said to include former Westpac executive Jason Yetton.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, VISA INTERNATIONAL, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC, SOCIETYONE AUSTRALIA PTY LTD, MLC LIMITED, PERPETUAL LIMITED – ASX PPT

Exposure was good for banks: Elliott

roymorgansocial Leave a comment

Original article by Richard Gluyas
The Australian – Page: 21 : 24-Aug-18

ANZ Bank CEO Shayne Elliott has no regrets about his involvement in calling for the financial services royal commission, even though the evidence it has presented has been "confronting". The CEOs and chairmen of the major banks urged Treasurer Scott Morrison to hold the inquiry in a letter sent to him in November 2017. They noted that confidence in the financial system was being hurt by the ongoing speculation about the prospect of a royal commission.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. DEPT OF THE TREASURY

NAB withheld size of fee scandal from ASIC for 11 months

roymorgansocial Leave a comment

Original article by Joanna Mather
The Australian Financial Review – Page: 2 : 22-Aug-18

Australian financial services providers could be forced to repay clients more than $1bn over the fee-for-no-service scandal. The Australian Securities & Investments Commission’s deputy chairman Peter Kell has told the banking royal commission that just $260m has been refunded to date. Meanwhile, National Australia Bank informed ASIC in early November 2016 that clients affected by the scandal were owed $34.6m, but ASIC contends that NAB was aware of the extent of these liabilities some 11 months earlier. ASIC’s first report on the scandal had estimated that NAB owed just $12m.

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, AMP LIMITED – ASX AMP

Ticehurst supports lowering RBA inflation target

roymorgansocial Leave a comment

Original article by Vesna Poljak
The Australian Financial Review – Page: 31 : 17-Aug-18

Several leading economists have urged the Reserve Bank of Australia to scale back its inflation target. Andrew Ticehurst of Nomura Australia argues that the RBA’s midpoint of the 2-3 per cent target range is higher than that of its counterparts in the US, New Zealand and the UK, while he notes that some Asian central banks have reduced their inflation target without any adverse impact. Ticehurst says the RBA should "fine-tune" the inflation target by reducing it to around two per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, NOMURA AUSTRALIA LIMITED, BETASHARES CAPITAL LIMITED, UNIVERSITY OF TECHNOLOGY, SYDNEY, BANK OF KOREA, BANK INDONESIA