K: Financial and Insurance Services

NAB goes back to business for growth

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 2-Nov-18

National Australia Bank has posted cash earnings of $5.7bn for 2017-18, which is 14 per cent lower than previously. Cash earnings for the year to 30 September fell by two per cent when restructuring costs and customer remediation charges are excluded. NAB’s consumer and wealth management division’s earnings fell by 5.8 per cent, although its business and private banking division’s earnings rose 2.5 per cent. CEO Andrew Thorburn is upbeat about NAB’s earnings outlook.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ARNHEM INVESTMENT MANAGEMENT PTY LTD, MLC LIFETIME COMPANY LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Bad bankers to be named and shamed

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Original article by Jeff Whalley
Herald Sun – Page: 26 : 1-Nov-18

Australian Financial Complaints Authority CEO David Locke says the new agency expects to handle 55,000 complaints from consumers and small businesses in its first year. The AFCA has been formed via the merger of the Financial Ombudsman Service, the Superannuation Complaints Tribunal and the Credit & Investments Ombudsman. Locke says he will be more open to "naming and shaming" wrongdoers in the financial services industry than the FOS, noting that the latter was restricted to doing so in annual reports. The number of complaints received by the FOS rose by 10 per cent during its last year of operation.

CORPORATES
AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY, FINANCIAL OMBUDSMAN SERVICE LIMITED, AUSTRALIA. SUPERANNUATION COMPLAINTS TRIBUNAL, CREDIT AND INVESTMENTS OMBUDSMAN, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

AMP digs in as fresh queries arise over insurance arm sale

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Original article by James Frost
The Australian Financial Review – Page: 15 & 22 : 1-Nov-18

AMP’s acting CEO Mike Wilkins has defended the wealth manager’s $3.45bn deal to sell its life insurance arm, arguing that it is in the best interests of long-term shareholders. He adds that AMP’s board felt that it was appropriate to proceed with the transaction without putting it to a shareholder vote, although Dean Paatsch of proxy advisory firm Ownership Matters believes that the size of the deal means it should have been approved by shareholders. An ASX Limited spokesman has indicated that the deal is unlikely to breach listing rules.

CORPORATES
AMP LIMITED – ASX AMP, OWNERSHIP MATTERS PTY LTD, ASX LIMITED – ASX ASX

ANZ warns of more housing pain to come as profit sinks by 5pc

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 1-Nov-18

The ANZ Bank has posted a 2017-18 cash net profit of $6.49bn, which is five per cent lower than previously. Revenue for the year to 30 September declined by 1.4 per cent and ANZ’s net interest margin fell from 1.99 per cent to 1.87 per cent. CEO Shayne Elliott expects a further downturn in residential property prices, although he adds that the housing market’s fundamentals remain strong and a significant decline is unlikely. ANZ shareholders will receive a final dividend of $0.80 per share, and a full-year payout of $1.60.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CONCENTRATED LEADERS FUND LIMITED – ASX CLF, CITIGROUP PTY LTD

Mitsubishi in $4.1bn swoop for CBA arm

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 1-Nov-18

Brett Le Mesurier of Shaw & Partners expects the Commonwealth Bank of Australia to return capital to shareholders following a deal to sell its global asset management business. Japan’s Mitsubishi UFJ Financial Group will pay $4.1bn for Colonial First State Global Asset Management, which CBA had previously intended to demerge with its financial planning and mortgage assets. CBA expects to generate a post-tax gain of around $1.5bn from the sale of CFSGAM, while the bank’s common-equity tier-one capital will be boosted by 60 basis points.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED, SHAW AND PARTNERS LIMITED, COUNT FINANCIAL LIMITED, FINANCIAL WISDOM LIMITED, AUSSIE HOME LOANS LIMITED, COLONIAL FIRST STATE GROUP LIMITED, MORTGAGE CHOICE LIMITED – ASX MOC, COUNTPLUS LIMITED – ASX CUP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, SOCIETYONE AUSTRALIA PTY LTD, SUNCORP GROUP LIMITED – ASX SUN, TRIBECA INVESTMENT PARTNERS PTY LTD, MITSUBISHI UFJ TRUST AND BANKING INCORPORATION

Fundies blast AMP over $3.4b fire sale

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Original article by James Frost
The Australian Financial Review – Page: 1 & 22 : 31-Oct-18

Allan Gray Australia and Merlon Capital Partners are among the institutional investors that have criticised AMP’s proposal to divest its life insurance business. They believe that the $3.4bn sale price undervalues the life business, and Merlon has flagged the possibility of seeking an extraordinary general meeting to challenge the deal. Merlon has written to AMP arguing that the deal demonstrates a "reckless disregard" for shareholders’ funds, while Simon Mawhinney of Allan Gray describes it as a "disastrous deal" for AMP’s shareholders.

CORPORATES
AMP LIMITED – ASX AMP, ALLAN GRAY AUSTRALIA PTY LTD, MERLON CAPITAL PARTNERS PTY LTD, MACQUARIE COUNTRYWIDE MANAGEMENT LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESOLUTION LIFE GROUP LIMITED, AXA ASIA PACIFIC HOLDINGS LIMITED

RBA signals majors near unquestionably strong threshold

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Original article by Adam Creighton
The Australian – Page: 19 & 28 : 31-Oct-18

The Reserve Bank’s assistant governor Michele Bullock has praised the success of measures aimed at increasing the capital ratios of Australian banks. She notes that the four major banks are close to achieving the Australian Prudential Regulation Authority’s "unquestionably strong" capital benchmark. The banks’ capital ratios have increased from eight per cent to 12 per cent since 2013, when measured on a risk-weighted basis. However, Bullock has warned that APRA’s measures may be undermined if the non-bank financial sector’s market share increases.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, LEHMAN BROTHERS INCORPORATED, BANK OF ENGLAND

Chairmen in hot seat at commission

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 31-Oct-18

Remuneration in the banking sector will come under scrutiny during the financial services royal commission’s final round of public hearings, which commences on 19 November. There is also speculation that the chairs of some, if not all, of Australia’s four major banks will be asked to appear before the inquiry. The banks’ self-­assessments of their governance and culture are also expected to be on the royal commission’s agenda.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Local rally defies Wall Street blues to signal correction may be over

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Original article by David Rogers
The Australian – Page: 28 : 31-Oct-18

The Australian sharemarket has posted strong gains in the last two trading sessions, reducing its loss for the month to 6.5 per cent. The local bourse has recovered from its recent 18-month low of 5,624 points, having peaked at 6,373 points in late August. Meanwhile, Tony Brennan of Citigroup notes that growth stocks were the biggest underperformers in the Australian market’s recent sell-off, although he adds that these stocks’ price-earnings multiples remain high.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, SHANGHAI COMPOSITE INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, NASDAQ COMPOSITE INDEX, STANDARD AND POOR’S 500 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, MSCI WORLD INDEX, MSCI EMERGING MARKETS INDEX

The big banks facing a full-year profit hit

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Original article by James Frost
The Australian Financial Review – Page: 17 : 29-Oct-18

The consensus of analysts is that the ANZ Bank will post a cash profit of $6.2bn for the year to 30 September, down from $6.9bn previously. National Australia Bank’s full-year cash profit is tipped to fall from $6.64bn to $5.47bn, but Westpac’s cash profit is forecast to rise from $8.06bn previously to $8.13bn. Factors such as customer remediation costs and falling net interest margins are expected to weigh on the earnings of the three big banks. The Commonwealth Bank’s cash profit for the year to 30 June fell by 4.7 per cent to $9.4bn.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UBS HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE