K62 Finance

NAB CFO hails APRA decision

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Original article by James Frost
The Australian Financial Review – Page: 16 : 24-Jul-17

The Australian Prudential Regulation Authority has set a new capital target for the banking sector, with the four main banks expected to have a common equity tier-one capital ratio of 10.5 per cent or more by 1 January 2020. Gary Lennon, the National Australia Bank’s chief financial officer, says it is well placed to reach the target, as it had a CETI ratio of 10.1 per cent at the end of March 2017. Lennon is supportive of APRA’s target, saying it will help to boost investor confidence in the banking sector.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Bankers ‘all smiles’ as capital angst ends

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Original article by Andrew White
The Australian – Page: 22 : 21-Jul-17

Macquarie Wealth Management says the nation’s four major banks should have no difficulty meeting the Australian Prudential Regulation Authority’s revised capital targets, given that their capital increased by between 30 and 50 basis points during the first half of 2016-17. The new minimum requirements for common equity tier-one capital were less onerous than had been forecast, which prompted renewed investor support for bank stocks on 20 July.

CORPORATES
MACQUARIE WEALTH MANAGEMENT, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, UBS HOLDINGS PTY LTD, 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

Job surge adds to dollar’s strength

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Original article by David Rogers
The Australian – Page: 30 : 21-Jul-17

The Australian dollar peaked at a two-year high of $US0.7989 in local trading on 20 July, in response to data showing that 62,000 full-time jobs were created in June. The economy added a net 14,000 jobs, due to a sharp fall in part-time positions, and the unemployment rate was steady at 5.6 per cent. Capital Economics’ Katie Hickie says the Reserve Bank is likely to leave official interest rates on hold until at least the end of 2018, arguing that growth in wages will be limited by excess capacity in the labour market.

CORPORATES
CAPITAL ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, EUROPEAN CENTRAL BANK

Banks dodge a capital bullet

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Original article by Andrew White
The Australian – Page: 17 & 21 : 20-Jul-17

The Australian Prudential Regulation Authority will require the nation’s four major banks to have minimum common equity tier-one capital ratios of 10.5 per cent from 2020. The new capital requirements are part of APRA’s strategy for ensuring that local banks are "unquestionably strong". Investors responded positively to the revised capital rules, which were less stringent than had been anticipated, with shares in local banks rallying on 19 July. The capital ratios of most of the major banks are already close to APRA’s proposed new minimum.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, 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, YARRA CAPITAL PARTNERS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, SHANGHAI RURAL COMMERCIAL BANK

RBA sending a warning shot on rates: Edwards

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Original article by David Rogers
The Australian – Page: 17 & 28 : 20-Jul-17

Economist John Edwards recently suggested that Australia’s economic outlook could potentially prompt the Reserve Bank to lift the cash rate from 1.5 per cent to 3.5 per cent by the end of 2019. The minutes of the central bank’s latest board meeting indicate that it now has a "neutral" nominal cash rate target of 3.5 per cent. Edwards says it is quite possible that official interest rates could rise to this level, and he anticipates a rate rise in March 2018. Paul Bloxham of HSBC forecasts a rate increase in the March 2018 quarter.

CORPORATES
RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, DEUTSCHE BANK AG, GOLDMAN SACHS AUSTRALIA PTY LTD, LOWY INSTITUTE FOR INTERNATIONAL POLICY

Investors twitchy ahead of new capital rules

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Original article by James Eyers, James Frost
The Australian Financial Review – Page: 7 : 19-Jul-17

The Australian Prudential Regulation Authority is poised to unveil its revised capital rules for the banking sector on 19 July. There has been speculation that APRA will require banks to increase their equity capital. Meanwhile, Morgan Stanley forecasts that the Commonwealth Bank of Australia will report a common equity tier 1 capital ratio of about 9.9 per cent for fiscal 2017. Richard Wiles of Morgan Stanley says APRA’s new capital requirements constitute the biggest source of risk for CBA in the near-term.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, GOLDMAN SACHS AUSTRALIA PTY LTD

RBA signals cash rate rise to 3.5pc

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 19-Jul-17

The minutes of the Reserve Bank of Australia’s monthly board meeting for July show that it now has a neutral cash rate target of 3.5 per cent, compared with a cash rate of 1.5 per cent at present. Financial markets increased the chances of an interest rate rise in May 2018 to 91 per cent in response to the release of the minutes, which also made reference to economic indicators such as a downturn in unemployment and growth in infrastructure investment.

CORPORATES
RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG, UNITED STATES. FEDERAL RESERVE BOARD, GOLDMAN SACHS AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

ANZ joins the party with addition of Samsung Pay

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Original article by James Frost
The Australian Financial Review – Page: 14 : 18-Jul-17

The ANZ Bank’s Bob Belan notes that it has become the first major bank to allow customers to make mobile payments using Apple, Samsung and Android devices. ANZ will begin offering the Samsung Pay contactless mobile payments solution. It was the first Australian bank to provide access to the rival Apple Pay service. Westpac revealed plans to offer Samsung Pay earlier in 2017.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, SAMSUNG ELECTRONICS AUSTRALIA PTY LTD, SAMSUNG PAY, WESTPAC BANKING CORPORATION – ASX WBC, APPLE INCORPORATED, APPLE PAY, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, FACEBOOK INCORPORATED, MESSENGER CORPORATION, WECHAT, SNAPCHAT INCORPORATED, CITIGROUP INCORPORATED, AMERICAN EXPRESS COMPANY, CREDIT UNION AUSTRALIA LIMITED, BANK AUSTRALIA, DEFENCE BANK LIMITED, BANK OF SYDNEY LIMITED

Headaches for Reserve Bank as Aussie battler becomes dollar dazzler

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Original article by David Rogers
The Australian – Page: 17 & 28 : 18-Jul-17

The Australian dollar has gained three per cent against its US counterpart in the last week, peaking at a two-year high of $US0.7836 in intra-day trading on 17 July. Meanwhile, the Australian dollar trade-weighted index has risen to 66.4 points. Ray Attrill of National Australia Bank says the currency’s recent strength means the Reserve Bank will not increase the cash rate as quickly as financial markets had expected.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, GROUP OF TEN (G-10), UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, BLOOMBERG LP

Fed chief says increasing prices will allow rate rises

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Original article by Nick Timiraos
The Australian – Page: 27 : 14-Jul-17

The general expectation of financial markets is that the Federal Reserve will increase US interest rates again in December 2017. Federal Reserve chair Janet Yellen has told Congress that it is too soon to suggest that the US inflation rate will reach two per cent in coming years. She added that the central bank will maintain its current stand on gradually lifting the cash rate unless inflation remains persistently below its target of two per cent.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. DEPT OF LABOR, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT