K62 Finance

Carnell: banking inquiry should pass the pub test

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Original article by James Frost
The Australian Financial Review – Page: 15 : 24-Jan-18

Complaints about loans to small business and farmers are among those on which the banking royal commission will accept submissions, according to information released on 23 January. Kate Carnell, the small business and family enterprise ombudsman, previously headed an inquiry into small business loans in 2016. She says the banking royal commission must ensure that all interested parties are given the opportunity to make a submission.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN

Banking inquiry to start next month

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Original article by Richard Gluyas
The Australian – Page: 18 : 23-Jan-18

The banking royal commission will hold its first public hearing on 12 February, while its website has begun accepting submissions about alleged misconduct in the financial services industry. The Consumer Action Law Centre has made the first of two submissions, in which it has called upon the royal commission to focus on misconduct that affects disadvantaged consumers in particular. Meanwhile, Craig Williams of Citigroup has downgraded the Commonwealth Bank to a "sell" recommendation in the wake of its money-laundering scandal.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CONSUMER ACTION LAW CENTRE, CITIGROUP PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, HIGH COURT OF AUSTRALIA

UBS warning on household debt

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 21 : 19-Jan-18

New figures show that Australia’s household debt-to-income ratio has risen by three per cent to a record 199.7 per cent, which UBS notes is one of the world’s highest. The increase is largely due to the Australian Bureau of Statistics’ decision to include the debt of self-managed superannuation funds in the key indicator for the first time. UBS has forecast that the debt-to-income ratio will peak at around 205 per cent, and it has warned that rising household debt may affect demand for housing credit and the earnings of major banks. However, UBS is upbeat about the outlook for non-bank lenders.

CORPORATES
UBS HOLDINGS PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Bank probe a funding risk

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Original article by Tom McIlroy, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 4 : 16-Jan-18

Fitch Ratings says Australian banks may face an increase in wholesale funding costs if the Federal Government’s royal commission further erodes trust in the sector. The ratings agency notes that the Australian banking sector is particularly reliant on offshore funding. Meanwhile, royal commissioner Kenneth Hayne is expected to seek public submissions shortly, but Small Business & Family Enterprise Ombudsman Kate Carnell says the inquiry must avoid being swamped by submissions. Financial services providers must lodge 50-page reports with the commission by the end of January.

CORPORATES
FITCH RATINGS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, AUSTRALIAN BANKERS’ ASSOCIATION, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, HIGH COURT OF AUSTRALIA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Interest-only loans plummet as banks clamp down on mortgage risk

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Original article by Michael Roddan
The Australian – Page: 13 & 14 : 16-Jan-18

New data suggests that the Australian Prudential Regulation Authority’s crackdown on interest-only mortgage loans is having an impact. Australian Fin­ancial Group’s latest mortgage index shows that 19 per cent of new mortgage loans in the December 2017 quarter were interest-only loans, compared with 47 per cent for the corresponding period in 2016. However, the size of the average mortgage loan rose by 2.8 per cent nationwide in the year to November, and by 4.3 per cent in Victoria.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN FINANCE GROUP LIMITED – ASX AFG, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, DIGITAL FINANCE ANALYTICS, MOODY’S INVESTORS SERVICE INCORPORATED

Resurgent Aussie dollar heads back above US80c as commodity prices boom

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Original article by David Rogers
The Australian – Page: 13 & 18 : 16-Jan-18

The Australian dollar rose above $US0.79 in local trading on 15 January, and National Australia Bank estimates that the currency’s fair value in the near-term is $US0.80. Ray ­Attrill of NAB says the currency could reach its 2017 peak of $US0.8125 unless the US dollar rebounds, while Sean Callow of Westpac is also upbeat about the currency’s near-term outlook. Aside from US dollar weakness, the Australian dollar has benefited from a rally in the price of key commodities over the last month.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, IG MARKETS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

US inflation stirs global rate rise bets

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 27 : 15-Jan-18

Thierry Albert Wizman of Macquarie Group notes that the Reserve Bank of Australia is the only major central bank among developed countries that has not flagged a rise in official interest rates. The Bank of Canada is widely tipped to tighten monetary policy again in mid-January, while the general consensus of economists is that US interest rates will rise in March. Meanwhile, New York Federal Reserve president William Dudley recently warned that factors such as the low unemployment rate in the US and the Trump administration’s tax cuts could potentially see the US economy "overheat".

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF NEW YORK, BANK OF CANADA, EUROPEAN CENTRAL BANK, BANK OF JAPAN, FIS GROUP, BANK OF AMERICA CORPORATION, CAPITAL ECONOMICS LIMITED, LEHMAN BROTHERS INCORPORATED, RBC CAPITAL MARKETS, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Big banks to slash 20,000 jobs

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Original article by James Frost
The Australian Financial Review – Page: 1 & 4 : 3-Jan-18

Australia’s big four banks reduced their full-time employee numbers by just under 1,500 in 2017. However, banking analysts suggest that Westpac, the National Australia Bank, the ANZ Bank, and the Commonwealth Bank will be a lot more active in 2018 in terms of job shedding, with an overall reduction of 20,000 full-time employees seen as likely. Victor German from Macquarie says he had thought the big four might have been a bit more active in 2017 in terms of job cuts, while he urged them not to rely on natural attrition to get employee numbers down.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MACQUARIE GROUP LIMITED – ASX MQG, CLSA AUSTRALIA PTY LTD, KPMG AUSTRALIA PTY LTD, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, COMMINSURE

Bank inquiry’s massive dragnet

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Original article by Richard Gluyas
The Australian – Page: 13 & 16 : 21-Dec-17

The royal commission into financial services will require banks, insurers and superannuation funds to disclose any instances of misconduct since the start of 2008, and whether they are currently the subject of criminal or civil proceedings. Commissioner Kenneth Hayne has indicated that industry super funds will also be required provide an explanation for any expenditure that not is related to the fund’s administration or the payment of members’ benefits. Meanwhile, Small Business & Family Enterprise Ombudsman Kate Carnell, has reservations about a revised banking code of practice.

CORPORATES
AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, HIGH COURT OF AUSTRALIA

No mischief at Westpac, Rat told RBA

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Original article by James Frost
The Australian Financial Review – Page: 26 : 20-Dec-17

Transcripts from the court case concerning the activities of Westpac traders in regard to alleged manipulation of the bank bill swap rate were released by Federal Court Justice Jonathan Beach on 19 December. Closing submissions were presented on 14 December, and a judgment is not expected until 2018. The transcripts were taken from phone calls, including one made by Westpac trader Colin Roden to Reserve Bank of Australia official Matt Boge, in which Roden seeks to assure that himself and fellow traders are not up to any "mischief".

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN FINANCIAL MARKETS ASSOCIATION INCORPORATED