K62 Finance

NAB downplays ‘inevitable’ AAA rating loss

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Original article by Michael Roddan
The Australian – Page: 23 : 5-May-17

National Australia Bank has conceded that the loss of Australia’s coveted triple-A credit rating would result in a corresponding downgrade of the bank’s credit rating. However, group treasurer Shaun Dooley says this would have no impact on the bank’s domestic funding costs, while the cost of international funding would rise by about 10 basis points. Dooley adds that international investors have indicated that they would continue to invest in Australian banks if the nation’s credit rating were downgraded.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, FITCH RATINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, DELOITTE ACCESS ECONOMICS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA

ANZ shares pummelled by ‘lower for longer’ outlook

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Original article by Richard Gluyas
The Australian – Page: 19 & 23 : 3-May-17

The ANZ Bank has posted a 2016-17 interim cash profit of $A3.4bn, which is 23 per cent higher than previously. However, most analysts had expected a half-year profit of between $A3.5bn and $A3.8bn. CEO Shayne Elliott is confident that ANZ can outperform its rivals in terms of profit growth, but he says the low-growth environment means it no longer expects revenue growth to outpace that of rival banks. Shareholders will receive an interim dividend of $A0.80 per share.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE RESEARCH EQUITIES, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA

Upbeat RBA signals end to cuts

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Original article by David Rogers
The Australian – Page: 27 : 3-May-17

The Reserve Bank of Australia’s decision to leave official interest rates unchanged on 2 May was widely expected. However, an upbeat outlook for the domestic and global economies has prompted speculation that there will be no more rate cuts in the current monetary policy cycle. RBA governor Philip Lowe noted that the resource sector’s exports are rising while higher commodity prices are resulting in an increase in national income.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX

Rate hikes deferred by slow US growth

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Original article by Myriam Robin
The Australian Financial Review – Page: 20 : 1-May-17

The Federal Reserve is tipped to leave interest rates on hold in May 2017, in the wake of GDP data showing that US economic growth slowed to a three-year low of 0.7 per cent in the March quarter. Some 70 per cent of futures traders expect the Federal Reserve to tighten monetary policy in June. The Reserve Bank of Australia is also expected to leave rates on hold in May, and Paul Brennan of Citigroup says the central bank’s revised quarterly forecasts are unlikely to be unduly affected by data showing that inflation is within its target range.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, THINKMARKETS, REUTERS HOLDINGS PLC, SOCIETE GENERALE SA

Major banks reduce legal powers over SME customers

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Original article by James Eyers
The Australian Financial Review – Page: 16 : 1-May-17

All four of Australia’s major banks have made changes to the terms of their loans to small businesses. The changes, which were recommended by small business ombudsman Kate Carnell, relate to "non-monetary default" clauses in loan contracts. The changes will apply to loans of up to $A3 million, although in the case of Westpac and the ANZ, they will only apply to new loans or when an existing loan is being renewed or modified. The Commonwealth Bank and National Australia Bank will apply the changes to both new and existing loans.

CORPORATES
AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BANKERS’ ASSOCIATION

Banks set for earnings boost from rate hikes

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Original article by James Frost, Jonathan Shapiro
The Australian Financial Review – Page: 13 & 16 : 1-May-17

The ANZ Bank, Westpac and National Australia Bank will release their 2016-17 interim results in early May 2017, while the Commonwealth Bank will release a trading update for the third quarter of its financial year. The "big four" banks are forecast to post a combined interim cash profit of around $A16bn. Earnings are expected to have been bolstered by the banks’ recent moves to lift their interest rates for investor and interest-only home loans. Citigroup forecasts that the rate rises will boost earnings per share by up to two per cent in 2017.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CITIGROUP PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSBIL INVESTMENT MANAGEMENT LIMITED, UBS HOLDINGS PTY LTD, STANDARD CHARTERED BANK MALAYSIA BERHAD, STANDARD CHARTERED BANK PLC, DNR CAPITAL PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG

Inflation will decide the rate debate

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Original article by Philip Baker
The Australian Financial Review – Page: 30 : 26-Apr-17

Investors will be awaiting the release of Australia’s CPI data for the March 2017 quarter, which may influence the timing of any change to monetary policy. The headline inflation rate is widely tipped to have risen by 2.2 per cent year-on-year, which would be the first time that inflation has been within the Reserve Bank’s target range of 2-3 per cent since the September 2014 quarter. However, the underlying inflation rate for the year to March is expected to be around 1.8 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, WOOLWORTHS LIMITED – ASX WOW

Report pans banks’ reform resistance

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Original article by Richard Gluyas
The Australian – Page: 21 : 26-Apr-17

The ANZ Bank is the only major Australian bank to have supported the key recommendations of the House of Representatives economics committee’s first report on increasing competition and governance in the industry. The recommendations included measures to make bank executives more accountable for the misconduct of employees. The Australian Labor Party still maintains the need for a royal commission into the banking sector.

CORPORATES
AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKERS’ ASSOCIATION, LIBERAL PARTY OF AUSTRALIA

Banks may have to sell rivals’ products

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Original article by James Eyers
The Australian Financial Review – Page: 3 : 24-Apr-17

Australian Securities & Investments Commission chairman Greg Medcraft says the regulator may use soon-to-be acquired powers to restrict the scope of banks to cross-sell products. He was speaking at a financial technology forum in London. He said it is also possible that banks could be compelled to sell products offered by rivals under its "product intervention" powers.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, INTERNATIONAL MONETARY FUND, AUSTRALIAN BRITISH CHAMBER OF COMMERCE

Jobs to go at NAB as banks face cost squeeze

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

Australian banks are continuing to downsize their workforces amid rising costs, falling net interest margins and new capital requirements. The ANZ Bank has advised that it shed 35 IT jobs in early 2017, while National Australia Bank recently told staff that it intends to cut about 500 jobs. However, NAB will create 400 new jobs, with some displaced staff likely to be redeployed. There was a 2.4 per cent reduction in full-time staff in Australia’s banking industry in 2015-16.

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