K62 Finance

Gupta plans bank for businesses

roymorgansocial Leave a comment

Original article by Luke Griffiths
The Australian – Page: 6 : 1-Jun-18

British billionaire Sanjeev Gupta wants to start a business-focused bank in Australia, and is looking at possible acquisition targets. Gupta’s GFG Alliance operates Wyelands Bank in the UK, which targets small and medium businesses, and Gupta says his proposed Australian bank would have a similar focus. Australian Industry Group CEO Innes Willox says such a bank would be welcomed, particularly as borrowing might become harder in the wake of the banking royal commission.

CORPORATES
GFG ALLIANCE, WYELANDS BANK, THE AUSTRALIAN INDUSTRY GROUP, ZEN ENERGY PTY LTD, TUNGSTEN BANK, DIAMOND BAY CLEANING SERVICES, BAILLIEU HOLST LIMITED, ARRIUM LIMITED, GLENCORE AUSTRALIA PTY LTD, DIAMOND BANK

NAB admits it had no right to customer’s house

roymorgansocial Leave a comment

Original article by Ben Butler, Elizabeth Redman
The Australian – Page: 23 : 1-Jun-18

National Australia Bank business customer Ross Dillon was cross-examined before the banking royal commission on 31 May. NAB’s Ross McNaughton admitted that the bank had no legal entitlement to use the entire proceeds from the sale of Dillon’s home to pay off the debts of his business. He said that NAB would only have a legal claim to the proceeds if the business defaulted. Dillon maintained that it had never been his intention to solely pay down his business debts with the proceeds from the sale of his family home.

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

CBA’s risk overhaul could take five years, inquiry told

roymorgansocial Leave a comment

Original article by James Frost
The Australian Financial Review – Page: 8 : 31-May-18

The Commonwealth Bank of Australia’s risk management practices came under scrutiny by the banking royal commission on 30 May. Chief risk officer David Cohen conceded that the bank’s risk function is still inadequate and warned that changes to its risk management systems will not be fully implemented for up to five years. He also expressed the view that CBA needs to "return to the basics" with regard to its risk function.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANKWEST, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

CBA shock that Bankwest wasn’t up to scratch

roymorgansocial Leave a comment

Original article by James Frost
The Australian Financial Review – Page: 7 : 30-May-18

The business loans portfolio of Bankwest came under scrutiny by the banking royal commission on 29 May. The Commonwealth Bank’s chief risk officer David Cohen told the inquiry that the loan book was reviewed after Bankwest’s acquisition in 2009, and concerns were raised about the quality of the loan book and the procedures used for granting loans. Bankwest CEO Jon Sutton also expressed concern about the quality of its business loan book in April 2009 and again in March 2010.

CORPORATES
BANKWEST, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

House prices ‘won’t sway the RBA’

roymorgansocial Leave a comment

Original article by James Glynn
The Australian – Page: 17 & 28 : 29-May-18

Reserve Bank of Australia board member Ian Harper says factors such as the low growth in wages means the central bank is unlikely to increase official interest rates in the near-term. He adds that slowing growth in residential property prices will also not influence the timing of a rise in the cash rate. Financial markets do not expect monetary policy to be tightened until at least late 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, MELBOURNE BUSINESS SCHOOL

Aussie dollar vulnerable to further EM turmoil

roymorgansocial Leave a comment

Original article by Patrick Commins
The Australian Financial Review – Page: 22 : 28-May-18

The Australian dollar has shed three per cent against its US counterpart so far in 2018. Rodrigo Catril of National Australia Bank expects the currency to trade within a range of $US0.75 to $US0.77 for the rest of the year. However, he warns that sustained volatility in emerging markets is a potential risk for the Australian dollar. Catril adds that this risk should remain relatively low unless the volatility extends beyond countries such as Turkey, Argentina and Venezuela.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP CAPITAL INVESTORS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, BLOOMBERG LP

Lawyers alarmed by Hayne inquisition

roymorgansocial Leave a comment

Original article by Misa Han
The Australian Financial Review – Page: 34 : 25-May-18

There are suggestions that the banking royal commission lacks procedural fairness, both for companies and individuals that appear before it. Dr Matt Collins, who is the ANZ Bank’s chief counsel and president of the Victorian bar, notes that the rules of evidence that apply in a normal court do not apply in a royal commission, and this means that some of the evidence given before the commission can be unreliable. Grant Hoole from the Gilbert + Tobin Centre of Public Law at the University of New South Wales says witnesses before a royal commission who are facing serious allegations should have the right to be questioned by their own counsel, for the sake of fairness.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, UNIVERSITY OF NEW SOUTH WALES, GILBERT AND TOBIN LAWYERS, HENDERSON MAXWELL PTY LTD

Bank’s conduct unconscionable

roymorgansocial Leave a comment

Original article by Ben Butler
The Australian – Page: 19 & 23 : 25-May-18

Westpac faces a maximum fine of $A3.3m after the Federal Court upheld three unconscionable conduct charges with regard to the bank bill swap rate. However, the court ruled that the trades did not amount to market manipulation. Westpac would have faced penalties of up to $A2bn under revised laws that took effect after the offences in question. Its three major rivals had agreed to out-of-court settlements with the Australian Securities & Investments Commission over allegations of unconscionable conduct.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Westpac filled forms with false details

roymorgansocial Leave a comment

Original article by Ben Butler, Elizabeth Redman
The Australian – Page: 17 & 21 : 23-May-18

Westpac’s loan practices continued to attract scrutiny by the banking royal commission on 22 May, in the wake of revelations regarding the bank’s handling of a case in which a blind woman had acted as a guarantor. Westpac executive Alastair Welsh told the inquiry that the bank’s employees have been known to enter false information into loan documentation. He also conceded that the procedures Westpac follows in assessing whether a guarantor is likely to gain any financial benefit are more "form than substance".

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, FINANCIAL OMBUDSMAN SERVICE LIMITED, NEW SOUTH WALES LEGAL AID COMMISSION

Wage woes a boon for investors, says Tevfik

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 27 : 23-May-18

The S&P/ASX 200 has fallen by an average of 4.3 per cent during May and June over the last decade, and the current trend suggests that it will be trading at around 5,724.8 points by the end of June. However, Hasan Tevfik of Credit Suisse still expects it to reach 6,500 points by the end of 2018. He says corporate profit margins – and in turn share prices – should benefit from expectations that wages growth will remain subdued. Lack of growth in wages will also affect the timing of any rise in official interest rates, which Credit Suisse does not expect until about mid-2019.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CREDIT SUISSE (AUSTRALIA) LIMITED, BLUESCOPE STEEL LIMITED – ASX BSL, AUTOMOTIVE HOLDINGS GROUP LIMITED – ASX AHG, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, VICINITY CENTRES – ASX VCX