K62 Finance

Admitting guilt the clincher for rate-rig case

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Original article by Jonathan Shapiro, Patrick Durkin
The Australian Financial Review – Page: 13 & 18 : 11-Oct-17

The Australian Securities & Investments Commission’s case against three of the "big four" banks over allegations that they manipulated the bank bill swap rate will be heard by the Federal Court on 23 October. Some observers believe that the parties could reach a settlement before the case begins, although this would require the banks to admit that they had engaged in unconscionable conduct. Meanwhile, stock exchange operator ASX Limited has issued new guidelines regarding bank bill trading in the wake of the BBSW scandal.

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

CBA faces investor class action

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Original article by James Frost
The Australian Financial Review – Page: 4 : 10-Oct-17

Andrew Watson of law firm Maurice Blackburn says its class action against the Commonwealth Bank could be the largest ever in Australia. The firm will seek compensation for retail and institutional investors who bought the bank’s shares between 1 July 2015 and 3 August 2017. The class action centres on the bank’s failure to make adequate disclosures regarding the money-laundering scandal. Austrac’s revelation that it was investigating the bank prompted a sharp fall in its share price.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MAURICE BLACKBURN PTY LTD, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, IMF BENTHAM LIMITED – ASX IMF

NAB simplifies its small business lending contracts

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 6-Oct-17

National Australia Bank has advised that its standard contract for small business loans has been streamlined to make it "simple, fairer and more transparent". The number of clauses in the standard contract has been reduced from 24 to just 17, while it includes a summary of key terms in plain English. The new contracts will apply to about 98.7 per cent of the bank’s business customers. The move to simplify small business lending contracts follows criticism of the banking sector’s existing contracts by small business ombudsman Kate Carnell earlier in 2017.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, AUSTRALIAN LABOR PARTY

Why Coppo says to buy banks now

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Original article by Philip Baker
The Australian Financial Review – Page: 30 : 6-Oct-17

Richard Coppleson of Bell Financial Group says investors should consider buying Australian bank stocks in October for their dividend yield. He says historical analysis shows that bank stocks have not posted gains during the month of October in just four years since 2000, and three of those occasions were due to the global financial crisis. He attributes the generally strong performance of bank stocks during October to the fact that they among the few stocks that trade ex-dividend in November.

CORPORATES
BELL FINANCIAL GROUP LIMITED – ASX BFG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MORGAN STANLEY AUSTRALIA LIMITED, LONG-TERM CAPITAL MANAGEMENT, RESERVE BANK OF AUSTRALIA

Interest-only loans a timebomb for banks

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Original article by Michael Roddan
The Australian – Page: 3 : 5-Oct-17

According to official figures, interest-only loans account for about 35 per cent of all mortgages issued in Australia. However, research by UBS has found that just 24 per cent of home loans are interest-only. Jonathan Mott of UBS says the discrepancy could be because many of these borrowers are unaware that they are not paying off the principal of their loan. The UBS survey also found that 70 per cent of people with interest-only loans reported having "moderate" or "high" levels of financial stress.

CORPORATES
UBS HOLDINGS PTY LTD

CBA’s management exodus continues

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Original article by James Eyers
The Australian Financial Review – Page: 9 & 12 : 3-Oct-17

The Commonwealth Bank of Australia’s ASB subsidiary in New Zealand will consider internal and external candidates to succeed outgoing CEO Barbara Chapman. ASB’s profits have risen from just $A568m to more than $A1bn since Chapman took the helm in 2011. She will retire from the banking sector in 2018. CBA also recently advised that the head of its wealth management arm, Annabel Spring, will step down in late 2017, while CEO Ian Narev will leave the banking major by mid-2018.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ASB BANK LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ALL BLACKS, RUSSELL REYNOLDS ASSOCIATES INCORPORATED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, FEDERAL COURT OF AUSTRALIA

Yellen defends Fed’s gradual rate rise plan

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Original article by David Harrison
The Australian – Page: 28 : 28-Sep-17

Financial markets have priced in a 77.9 per cent chance of a rise in US interest rates in December following a speech by Federal Reserve chair Janet Yellen, compared with 72.8 per cent previously. The central bank has flagged one more rate rise in 2017 and further tightening of monetary policy over the next several years. However, Yellen has told a conference that the outlook for inflation will influence how rapidly interest rates are increased. Inflation has remained below the Federal Reserve’s target of two per cent for some time.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, NATIONAL ASSOCIATION FOR BUSINESS ECONOMICS, FEDERAL RESERVE BANK OF NEW YORK, FEDERAL RESERVE BANK OF CHICAGO

Bendigo Bank has highest customer satisfaction among majors

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 28-Sep-17

A Roy Morgan Single Source survey has found that customer satisfaction with Bendigo Bank in August 2017 was 89.3%, making it the top performer among the 10 largest consumer banks. Not only was Bendigo the satisfaction leader but it improved its rating over the month by 0.9% points, against an overall decline of 0.2% points for banks in total. Other small banks such as ING Direct with 86.7%, Bank of Queensland (84.2%), Suncorp (83.0%) and St George (82.0%) also had high customer satisfaction ratings. The best performer among the four majors was the CBA with 80.2%, followed by Westpac on 78.5%, NAB (78.4%) and ANZ (77.3%). The overall average satisfaction for all banks was 80.8% in August. Meanwhile, the mortgage customers of each of the big four banks continue to be a drag on their overall satisfaction, despite historically low home-loan rates.

CORPORATES
ROY MORGAN RESEARCH LIMITED, BENDIGO BANK, ING DIRECT, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP BANK, ST GEORGE BANK LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Competition probe shakes ‘four pillars’

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 20-Sep-17

Australian Competition & Consumer Commission chairman Rod Sims says it has a "neutral" position on the issue of mergers between the nation’s four major banks. However, the ACCC has used its submission to the Productivity Commission’s inquiry into competition in the financial system to urge it to examine the impact of the so-called "four pillars" policy. The ACCC has also asked the inquiry to consider whether the four pillars policy should be expanded to include smaller banks.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. PRODUCTIVITY COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

BIS warns on risks of digital currency

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Original article by Richard Gluyas
The Australian – Page: 20 : 19-Sep-17

The Bank for International Settlements has noted the increased interest in cryptocurrencies like Bitcoin, while observing that such currencies could be issued by central banks. However, it notes that not enough has been done to assess the risks associated with digital currencies, including how resilient cryptocurrencies issued by central banks would be to cyberattacks. Meanwhile, JP Morgan Chase CEO Jamie Dimon has referred to bitcoin as a "fraud", saying that any JP Morgan employee found to be trading in it would be sacked on the spot.

CORPORATES
BANK FOR INTERNATIONAL SETTLEMENTS, JP MORGAN CHASE AND COMPANY