K: Financial and Insurance Services

CBA abusing the law fighting customers: Labor

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 12-Oct-18

Commonwealth Bank of Australia CEO Matt Comyn appeared before the House of Representatives economics committee on 11 October. He admitted that the misconduct exposed by the financial services royal commission had hurt some customers, and said CBA is changing its organisational culture in the wake of the scandals that have rocked the bank. Labor MP Clare O’Neil criticised CBA’s approach to dealing with customers’ complaints, including the use of aggressive litigation tactics.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, AUSTRALIAN LABOR PARTY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, LIBERAL PARTY OF AUSTRALIA

Trump blames crazy Fed for rout

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Original article by Vesna Poljak, Sarah Turner, Michael Smith, Jacob Greber
The Australian Financial Review – Page: 1 & 29 : 12-Oct-18

The Nasdaq shed more than four per cent on 11 October, as global sentiment toward equities turned bearish. President Donald Trump has linked the global sell-off to the Federal Reserve’s recent decision to increase official interest rates, telling reporters that the central bank is "making a mistake" and it has "gone crazy". Simon Doyle of Schroders says US markets are likely to experience a further big fall, citing factor such as high valuations, rising interest rates and the US-China trade war.

CORPORATES
NASDAQ COMPOSITE INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, UNITED STATES. FEDERAL RESERVE BOARD, SCHRODER INVESTMENT MANAGEMENT AUSTRALIA LIMITED, NETFLIX INCORPORATED, AMAZON.COM INCORPORATED, ADOBE CORPORATION, STANDARD AND POOR’S ASX 200 INDEX, HANG SENG INDEX, NIKKEI 225 INDEX, WISETECH GLOBAL LIMITED – ASX WTC, APPEN LIMITED – ASX APX, FEDERATION ASSET MANAGEMENT, MACQUARIE GROUP LIMITED – ASX MQG

CBA faces first suit over low returns

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Original article by Michael Roddan
The Australian – Page: 21 : 11-Oct-18

The Commonwealth Bank of Australia has indicated that it will "vigorously" defend a class action launched by Slater & Gordon. The law firm contents that wealth manager Colonial First State had invested its superannuation clients’ money in CBA-owned funds that had very low returns, when it could have invested the money in higher-returning funds controlled by CBA or other banks. Other banks and financial institutions have also been targeted by class action lawyers in the wake of the financial services royal commission.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, COLONIAL FIRST STATE GROUP LIMITED, SLATER AND GORDON LIMITED – ASX SGH, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH FINANCIAL PLANNING LIMITED, BW FINANCIAL ADVICE, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC LIMITED, AMP LIMITED – ASX AMP, MAURICE BLACKBURN PTY LTD

Bank CEOs to face off with fired-up MPs

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Original article by James Frost
The Australian Financial Review – Page: 17 : 11-Oct-18

Liberal MP Tim Wilson, who chairs federal parliament’s standing committee on economics, says bank CEOs can expect to face a grilling when they front the committee in coming days. He says that amongst other things, the committee will be demanding information on how the major banks intend to address governance concerns and compensate customers for misconduct. Commonwealth Bank CEO Matt Comyn and Westpac CEO Brian Hartzer will appear before the committee on 11 October.

CORPORATES
AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, LIBERAL PARTY OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AMP LIMITED – ASX AMP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKING ASSOCIATION, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIAN GREENS, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Rio reverse reveals investor ire on pay

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Original article by Patrick Durkin
The Australian Financial Review – Page: 15 : 10-Oct-18

Rio Tinto has advised that it will not proceed with plans to adopt a new executive remuneration model after meetings with key shareholders indicated that it was unlikely to secure sufficient support from investors. A number of Australian-listed companies have adopted so-called hybrid remuneration structures, including Telstra, AMP and Wesfarmers. However, investors have raised concerns about the hybrid model, and the issue has attracted scrutiny by the financial services royal commission.

CORPORATES
RIO TINTO LIMITED – ASX RIO, TELSTRA CORPORATION LIMITED – ASX TLS, AMP LIMITED – ASX AMP, WESFARMERS LIMITED – ASX WES, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, QBE INSURANCE GROUP LIMITED – ASX QBE, PERPETUAL LIMITED – ASX PPT, JB HI-FI LIMITED – ASX JBH, ISENTIA GROUP LIMITED – ASX ISD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Banks to end charging dead, conflicted fees

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Original article by James Frost
The Australian Financial Review – Page: 13 & 17 : 10-Oct-18

The Australian Banking Association has proposed a number of changes to the banking code of practice in response to the misconduct exposed by the financial services royal commission. Amongst other things, banks have agreed to take action to ensure that they do not continue to charge fees after a customer has died, while the banks will ensure that they do not charge fees for services that are not provided or are not needed by a customer. The ABA and its members will also lobby for the complete abolition of trailing commissions for financial advice.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE PRIVATE WEALTH MANAGEMENT PTY LTD, CLSA AUSTRALIA PTY LTD, COMMONWEALTH FINANCIAL PLANNING LIMITED, COUNT FINANCIAL LIMITED, FINANCIAL WISDOM LIMITED, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT

Bidders are swinging hard for assets in M&A frenzy

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 17 : 10-Oct-18

Data from Dealogic shows that some $US88bn ($124bn) worth of mergers and acquisitions have been announced in Australia so far in 2018. This compares with $US89.3bn for the whole of 2017. Bankers and lawyers expect M&A activity to remain strong, with cashed-up local private equity firms competing with foreign players. Recently announced M&A transactions include KKR’s bid for MYOB and Affinity Equity Partners’ deal to buy Scottish Pacific Group.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, KKR AND COMPANY LP, MYOB GROUP LIMITED – ASX MYO, AFFINITY EQUITY PARTNERS (AUSTRALIA) PTY LTD, SCOTTISH PACIFIC GROUP LIMITED – ASX SCO, PACIFIC EQUITY PARTNERS PTY LTD, LIFEHEALTHCARE GROUP LIMITED, NEXTDC LIMITED – ASX NXT, ASIA PACIFIC DATA CENTRE GROUP – ASX AJD, APA GROUP – ASX APA, CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, TRANSURBAN GROUP LIMITED – ASX TCL, WESTCONNEX, WESTFIELD CORPORATION, MINTER ELLISON, SIRTEX MEDICAL LIMITED, CDH INVESTMENTS FUND MANAGEMENT COMPANY, GREENHILL AND COMPANY, NM ROTHSCHILD AUSTRALIA HOLDINGS PTY LTD, WESFARMERS LIMITED – ASX WES, UBS HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE CAPITAL PTY LTD

Banks tumble over advice compo fears

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Original article by Michael Roddan
The Australian – Page: 17 & 20 : 9-Oct-18

The ANZ Bank has advised that its full-year accounts for 2017-18 will include charges totalling $739m in the second half. Amongst other things, ANZ has advised of $374m in charges to compensate customers who paid fees for services they had not received, while its costs associated with the financial services royal commission are expected to total $55m. The major banks will shortly come under scrutiny by the House of Representatives economics committee for the first time since the inquiry began.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UBS HOLDINGS PTY LTD, LIBERAL PARTY OF AUSTRALIA, STANDARD AND POOR’S FINANCIAL SERVICES LLC, MLC LIMITED, MAURICE BLACKBURN PTY LTD, SLATER AND GORDON LIMITED – ASX SGH

6000-point level the next test of new down leg

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Original article by David Rogers
The Australian – Page: 28 : 9-Oct-18

The Australian sharemarket’s 1.4 per cent fall on 8 October was its largest single-day loss since late March, with blue-chip stocks in particular retreating. The bearish investor sentiment also weighed on the Australian dollar, which fell to its lowest level in 2.5 years in local trading. Charting suggests that the S&P/ASX 200 could fall below 6,000 points in coming days, although the earnings outlook means it would be unlikely to remain below this level for very long.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BHP BILLITON LIMITED – ASX BHP, CSL LIMITED – ASX CSL, TELSTRA CORPORATION LIMITED – ASX TLS, ARISTOCRAT LEISURE LIMITED – ASX ALL, TREASURY WINE ESTATES LIMITED – ASX TWE, NORSK HYDRO AS, MORGAN STANLEY AUSTRALIA LIMITED, RIO TINTO LIMITED – ASX RIO, SANTOS LIMITED – ASX STO, COCHLEAR LIMITED – ASX COH, RESMED INCORPORATED – ASX RMD, INVOCARE LIMITED – ASX IVC, NUFARM LIMITED – ASX NUF, ANSELL LIMITED – ASX ANN, GOLDMAN SACHS AUSTRALIA PTY LTD, PEOPLE’S BANK OF CHINA

Banks urged to slash branches to offset rising costs

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Original article by Richard Gluyas
The Australian – Page: 19 : 8-Oct-18

Morgan Stanley argues that Australia’s major banks could generate significant savings by closing bank branches and placing greater emphasis on mobile banking. This is one of four scenarios outlined in a new report; however, Morgan Stanley notes that banks are unlikely to significantly reduce the cost of their networks in the next year, given that the sector is under scrutiny at present. Morgan Stanley adds that the major banks could potentially generate large savings by reviewing their multibrand strategies.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ