K62 Finance

APRA probe risks CBA rating

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Original article by Jonathan Shapiro, Phillip Coorey, James Eyers
The Australian Financial Review – Page: 1 & 6 : 29-Aug-17

The Australian Prudential Regulation Authority will establish an independent panel to review the Commonwealth Bank of Australia’s governance, culture and accountability. CBA CEO Ian Narev has described the review, which follows a series of scandals at the nation’s largest bank, as a "positive and constructive step". However, ratings agencies S&P Global and Fitch have warned that CBA’s credit rating could be downgraded if the review results in any adverse findings. Shadow treasurer Chris Bowen maintains that a royal commission into the entire banking sector is needed.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, S&P GLOBAL RATINGS, FITCH RATINGS LIMITED, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX, WILSON ASSET MANAGEMENT, FINANCE SECTOR UNION

Home loan borrowers snub banks

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Original article by Michael Bleby
The Australian Financial Review – Page: 17 : 25-Aug-17

Mortgage Choice has reported a 2016-17 net profit of $A22.2 million, up 13.5 per cent. Mortgage Choice’s shares were trading up three per cent at $A2.36 on the back of its result, while it declared a fully franked dividend of $A0.09 per share. Mortgage Choice’s loan book rose by 3.2 per cent to $A53.4 billion over the year, while CEO John Flavell commented that non-bank lenders had increased their share of Australia’s home loan market over the period.

CORPORATES
MORTGAGE CHOICE LIMITED – ASX MOC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MACQUARIE SECURITIES PTY LTD

CBA faces $200m-plus class action

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Original article by Ben Butler, Michael Roddan
The Australian – Page: 17 & 21 : 24-Aug-17

Investors who bought shares in the Commonwealth Bank of Australia between 17 August 2015 and 3 August 2017 will be eligible to participate in a proposed class action over the bank’s money-laundering scandal. CBA’s share price has fallen by six per cent since Austrac filed legal action on 3 August, slashing the bank’s market capitalisation by around $A8bn. Maurice Blackburn’s class action is expected to focus on CBA’s disclosures regarding Austrac’s investigation into the money-laundering allegations.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MAURICE BLACKBURN PTY LTD, IMF BENTHAM LIMITED – ASX IMF, FEDERAL COURT OF AUSTRALIA, COMMINSURE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, VELOCITY TRADE LIMITED, FITCH RATINGS LIMITED

APRA can’t be enforcer and supervisor, NAB says

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Original article by James Eyers
The Australian Financial Review – Page: 13 & 16 : 23-Aug-17

Banks have raised concerns about the proposed Banking Executive Accountability Regime (BEAR) in submissions to the Federal Government. The role of the Australian Prudential Regulation Authority under the new regime is a particular concern for the banking sector, given that it will have powers to fine banks up to $A200m for non-compliance. National Australia Bank has questioned the appropriateness of APRA having the dual roles of supervising and regulating the bank sector, while the ANZ Bank said more clarity is needed regarding the roles of APRA and the Australian Securities & Investments Commission under the BEAR reforms.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN BANKERS’ ASSOCIATION, AUSTRALIA. DEPT OF THE TREASURY, FINANCE SECTOR UNION, CUSTOMER OWNED BANKING ASSOCIATION, OWNERSHIP MATTERS PTY LTD, AUSTRALIANSUPER PTY LTD

Banks racing to lift their game: Hartzer

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Original article by Michael Roddan, Richard Gluyas
The Australian – Page: 21 : 22-Aug-17

ANZ Bank CEO Shayne Elliott says the Commonwealth Bank’s recent money-laundering problems have impacted the banking sector’s reputation as a whole. He also says the Federal Government’s new regulations governing bank executives are appropriate, as they need to be made accountable for their mistakes. Meanwhile, Westpac CEO Brian Hartzer says the banking major is working hard to ensure that its products, processes and policies are in line with community expectations.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

APRA refines ‘serviceability’ rules for loans

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Original article by Duncan Hughes
The Australian Financial Review – Page: 6 : 21-Aug-17

The Australian Prudential Regulation Authority has directed banks such as Westpac to be more rigorous when it comes to assessing the ability of borrowers to service their loans. Westpac will introduce new measures in this regard from 21 August, with further measures to be adopted in September. APRA’s move on loan serviceability is the latest in a number of measures by it and other regulators aimed at ensuring that borrowers are not taking on too debt and are in a position to repay loans.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AMP LIMITED – ASX AMP

Norris supports Comyn for CBA

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Original article by Richard Gluyas
The Australian – Page: 17 & 18 : 21-Aug-17

Former Commonwealth Bank of Australia CEO Ralph Norris favours appointing an internal candidate to succeed incumbent Ian Narev. Norris argues that there is less risk associated with an internal appointment, despite calls from some analysts for CBA to recruit someone from outside the bank in order to pursue cultural change in the wake of the money-laundering scandal. Norris favours appointing the head of CBA’s retail banking division, Matt Comyn, to succeed Narev.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, FEDERAL COURT OF AUSTRALIA, MEDIBANK PRIVATE LIMITED – ASX MPL, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ROYAL BANK OF SCOTLAND GROUP PLC

Rumour mill picks candidates to replace Narev

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 8 : 16-Aug-17

Brian Johnson of CLSA says the Commonwealth Bank of Australia may need to select an external candidate to succeed CEO Ian Narev, as the money-laundering scandal has tainted internal contenders. Matt Comyn and Rob Jesudason were widely regarded as leading candidates from within CBA’s ranks prior to the scandal. Former Westpac executive Rob Whitfield, Royal Bank of Scotland CEO Ross McEwan and Medibank CEO Craig Drummond are seen as potential external candidates to replace Narev when he steps down by mid-2018.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CLSA AUSTRALIA PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, ROYAL BANK OF SCOTLAND GROUP PLC, MEDIBANK PRIVATE LIMITED – ASX MPL, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, NEW SOUTH WALES. THE TREASURY, REGAL FUNDS MANAGEMENT PTY LTD, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Bendigo Bank keeps branches open

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Original article by James Frost
The Australian Financial Review – Page: 17 : 15-Aug-17

Bendigo & Adelaide Bank’s 2016-17 cash profit was slightly below market expectations at $A418.3m, despite rising by 4.2 per cent. CEO Mike Hirst says the result was affected by a regulatory crackdown on mortgage lending. He adds that while the banking sector’s reputation has been tarnished by the Commonwealth Bank’s money-laundering scandal, Bendigo performs well in terms of trust. Hirst says its branch network and customer-facing staff will play a key role in retaining that trust.

CORPORATES
BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Livingstone ousts CEO Narev, cuts pay, puts execs on notice

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Original article by James Frost
The Australian Financial Review – Page: 1 & 8 : 15-Aug-17

The Commonwealth Bank of Australia’s board has reiterated its intention to take further action on cuts and changes to executive pay and incentives in the wake of the money laundering crisis. Its actions come as it announced that CEO Ian Narev will retire by 30 June 2018, with his successor most likely to be an external appointment. Louise Davidson, the CEO of the Australian Council of Superannuation Investors, says there are clearly some problems with the CBA’s culture, noting its recent problems involving financial planning and life insurance.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, AUSTRALIANSUPER PTY LTD, AUSBIL INVESTMENT MANAGEMENT LIMITED, OWNERSHIP MATTERS PTY LTD, UNISUPER LIMITED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE