K62 Finance

Slowly but surely, the RBA is turning positive

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Original article by David Rogers
The Australian – Page: 27 : 8-Aug-18

As expected, the Reserve Bank of Australia left interest rates on hold at 1.5 per cent on 7 August, marking two years since its last change in monetary policy. The RBA has maintained its guidance for economic growth in 2018 and 2019, while it expects the unemployment rate to ease to around five per cent over the next several years. The central bank has also indicated that although wages growth is likely to remain low, it should rise over time due to the improvement in the domestic economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

NAB’s fee strategy in spotlight

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Original article by Joanna Mather
The Australian Financial Review – Page: 8 : 7-Aug-18

The banking royal commission has been told that National Australia Bank retained "grandfathered" commissions after merging five separate superannuation funds in 2016. A former NAB executive, Paul Carter, told the inquiry that the bank had been concerned about the impact that abolishing the commissions would have on revenue, as financial planners could potentially have responded to the move by directing clients to other products. The inquiry was also told that NAB failed to inform clients that they could opt out of paying a "plan service fee".

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC LIMITED, MLC MASTERKEY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NULIS

RBA set to celebrate two years on hold

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Original article by Patrick Commins
The Australian Financial Review – Page: 5 : 6-Aug-18

The Reserve Bank of Australia has left the cash rate unchanged at 1.5 per cent since August 2016, and the central bank is widely tipped to maintain the status quo at its board meeting on 7 August 2018. Bond traders have priced in a 20 per cent chance of a rate rise by the end of 2018, and an 80 per cent chance by mid-2019. The RBA has previously signalled that interest rates are likely to remain on hold until signs of wages growth emerge, and analysts generally believe that there will need to be upward pressure on wages for the unemployment rate to fall below five per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA

Macquarie’s new chief sees upside

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Original article by Joyce Moullakis, Vesna Poljak
The Australian Financial Review – Page: 1 & 21 : 27-Jul-18

Macquarie Group has announced that Shemara Wikramanayake will succeed Nicholas Moore as CEO of the investment bank. Wikramanayake, who joined Macquarie in 1987, will take up her new job towards the end of November. She has been the head of Macquarie Asset Management, which has assets of $A534.1 billion since 2008. Macquarie’s shares closed 2.6 per cent lower at $A121.70 on 26 July.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, MACQUARIE ASSET MANAGEMENT, QANTAS AIRWAYS LIMITED – ASX QAN, WESTPAC BANKING CORPORATION – ASX WBC, ST GEORGE BANK LIMITED, PERENNIAL INVESTMENT PARTNERS LIMITED, SHAW AND PARTNERS LIMITED, INDIAN PACIFIC ASSET MANAGEMENT

Bank customer satisfaction and NPS slip further during Finance Royal Commission

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Original article by Roy Morgan
Market Research Update – Page: Online : 23-Jul-18

New results from Roy Morgan shows that bank customer satisfaction in Australia has dropped from 82.3% in January 2018, prior to the Finance Royal Commission, to 78.5% in May and 78.3% in June. Bank customer satisfaction is now at the lowest monthly level since April 2012, but it still remains above the long-term average of 73.8% since 2001, and well up on the 60.0% in January 2001. Roy Morgan’s Net Promoter Score for banks has declined in line with satisfaction, going from 0.49 in January to minus 4.03 in June. ING had the highest level of customer satisfaction of the 10 largest banks in the six months to June, at 88.6% (up 0.5% points over the last 12 months), ahead of Bendigo Bank with 87.7% (down 0.9% points over the year). CBA remained the leader among the big four banks with a customer satisfaction rating of 78.3%. All of the big four showed declines in satisfaction over the year. Roy Morgan’s "Customer Satisfaction-Consumer Banking in Australia June 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, ING BANK (AUSTRALIA) LIMITED, BENDIGO BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Home buyers falling behind in repayments

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Original article by Michael Roddan
The Australian – Page: 21 : 20-Jul-18

The Northern Territory had the highest percentage of mortgage borrowers who were in arrears among all Australian states and territories in May 2018, according to Standard & Poor’s. Victoria and Western Australia recorded a decline in borrowers who were in arrears, while New South Wales and Queensland recorded an increase. Overall, the number of Australian borrowers falling behind on their mortgage repayments increased by two basis points to 1.38 per cent in May.

CORPORATES
STANDARD AND POOR’S (AUSTRALIA) PTY LTD, RESERVE BANK OF AUSTRALIA

Bankwest branch closures hit 200 workers as customers shift online

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Original article by Alice Uribe, David Marin-Guzman
The Australian Financial Review – Page: 19 : 19-Jul-18

Bankwest MD Rowan Munchenberg says consumers’ growing preference for mobile banking has prompted the Commonwealth Bank subsidiary to close 29 bank branches in New South Wales, Victoria and Queensland. The move will result in the loss of 200 jobs, and the Finance Sector Union’s national secretary Julia Angrisano says Bankwest should have engaged in more consultation with staff. She has identified digital disruption as the biggest issue facing the financial services industry.

CORPORATES
BANKWEST, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FINANCE SECTOR UNION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

APRA backs banks over Hayne probe

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Original article by James Frost
The Australian Financial Review – Page: 1 & 2 : 19-Jul-18

The Australian Prudential Regulation Authority has defended the banking sector in its submission to the royal commission’s fourth round of public hearings. APRA argued amongst other things that banks have a right to make a profit and to call in bad debts when a borrower is unable to repay a loan. APRA was responding to questions raised by royal commissioner Ken Hayne regarding the need to balance the interests of banks and customers who are experiencing financial problems.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BANKWEST, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Fed chief Powell stays put with policy for now

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Original article by David Rogers
The Australian – Page: 27 : 19-Jul-18

US Federal Reserve chairman Jerome Powell has signalled that the central bank will retain its stated policy of increasing interest rates gradually, at least for now. The potential for a full-blown trade war with China appears to be the main reason for Powell’s caveat of "for now". Meanwhile, UBS forecasts that the Reserve Bank of Australia would most likely delay tightening monetary policy until beyond 2020 in the event of a full trade war.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, UBS HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S 500 INDEX

RBA flags risk of record household debt

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Original article by David Uren
The Australian – Page: 2 : 18-Jul-18

The minutes of the Reserve Bank of Australia’s board meeting for July indicate that although the central bank expects to begin tightening monetary policy, it is in no hurry to do so. The minutes also show that high levels of household debt continues to be a concern for the central bank. It noted that while an increase in the cash rate could be expected to reduce consumer spending, the high level of debt means a rate cut may not necessarily result in increased spending.

CORPORATES
RESERVE BANK OF AUSTRALIA