K: Financial and Insurance Services

Record looms as dividends ready to soar

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Original article by Sarah Turner
The Australian Financial Review – Page: 20 : 24-Sep-18

Australia’s S&P/ASX 200 has gained around two per cent so far in 2018, and analysts are hopeful that the market will be bolstered by some $13bn worth of dividend payments in the last week of September. Richard Coppleson of Bell Potter estimates that listed companies will pay out around $18.9bn in dividends for the month, compared with $16.4bn in September 2017. The resources sector has accounted for four of the top five companies in terms of the size of dividend increases in 2017-18, and Shane Oliver of AMP Capital notes that this is having a flow-on effect across the broader market.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BELL POTTER SECURITIES LIMITED, AMP CAPITAL INVESTORS LIMITED, BHP BILLITON LIMITED – ASX BHP, ALUMINA LIMITED – ASX AWC, WOODSIDE PETROLEUM LIMITED – ASX WPL, RIO TINTO LIMITED – ASX RIO, CSL LIMITED – ASX CSL, CREDIT SUISSE (AUSTRALIA) LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, FORTESCUE METALS GROUP LIMITED – ASX FMG, AMP LIMITED – ASX AMP

Union funds call a truce

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Original article by Joanna Mather
The Australian Financial Review – Page: 1 & 4 : 24-Sep-18

Industry Super Australia CEO Bernie Dean says the lobby group has "shelved indefinitely" its anti-bank "fox and henhouse" advertisements. Dean, who has succeeded David Whiteley, was responsible for creating the commercials, which were launched in March 2017. AustralianSuper CEO Ian Silk had been queried by the banking royal commission as to why it had helped to finance what the commission described as political advertising. Silk stated that it was in the best interest of AustralianSuper’s members. Dean says this was a reasonable comment.

CORPORATES
INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIANSUPER PTY LTD, HOST-PLUS, ACTU, VICTORIAN WORKCOVER AUTHORITY, AUSTRALIA. PRODUCTIVITY COMMISSION

Watchdog acts to rein in initial coin offerings

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Original article by Samantha Bailey
The Australian – Page: 26 : 21-Sep-18

The Australian Securities & Investments Commission has the burgeoning cryptocurrencies industry in its sights, revealing a crackdown on so-called initial coin offerings. ASIC has blocked the issuance of cryptocurrency tokens by several companies, due to concerns that their ICO product disclosure statements contained misleading or deceptive information. The corporate regulator notes that ICOs are highly speculative and the sector is largely unregulated.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NEW DAWN FUND, INVESTORS EXCHANGE LIMITED

Suncorp kept misleading ads campaign

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Original article by Michael Roddan, Ben Butler
The Australian – Page: 17 & 20 : 21-Sep-18

The financial services royal commission has been told that Suncorp-owned insurer AAMI faced potential fines of up to $7.2m for misleading advertising in November 2017, but it was fined just $43,800 by the Australian Securities & Investments Commission. The radio ads promoted AAMI’s commitment to completely replace a policyholder’s home if it was destroyed, but failed to disclose that this was subject to a cost limit. AAMI’s in-force premium revenue from these policies was $426m for the year, providing a strong incentive to continue the ad campaign.

CORPORATES
SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FINANCIAL OMBUDSMAN SERVICE LIMITED, AAI LIMITED

Thorburn faces $1m pay cut in NAB overhaul

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Original article by James Eyers
The Australian Financial Review – Page: 17 & 20 : 20-Sep-18

National Australia Bank will disclose more details of its revised executive pay structure when its annual remuneration report is released in November. Amongst other things, NAB will no longer take into account total shareholder return when determining executive bonuses, although return on equity will continue to be a key metric. NAB chairman Ken Henry says the new pay scheme is aimed at more closely aligning executive remuneration to customer service. CEO Andrew Thorburn is among the executives to be affected by the new remuneration policy.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Insurance shambles left homes in danger

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Original article by Michael Roddan
The Australian – Page: 17 & 21 : 20-Sep-18

The banking royal commission has heard evidence from customers of budget insurer Youi who had lodged insurance claims for storm damage to their homes. Amongst other things, the inquiry was told that Youi has yet to authorise repairs to a home in Queensland that was damaged by Cyclone Debbie in March 2017. Jason Storey, the chief operating officer of claims handling at Youi, conceded that the insurer lacks sufficient resources to cope with major natural disasters.

CORPORATES
YOUI PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RAND MERCHANT INSURANCE HOLDINGS GROUP LIMITED, NEW SOUTH WALES. ENVIRONMENT PROTECTION AUTHORITY

Westpac slashes new borrower rates

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Original article by Duncan Hughes
The Australian Financial Review – Page: 21 : 20-Sep-18

Westpac will increase its standard variable mortgage interest rates for existing customers by 14 basis points on 20 September, with several of its major rivals to lift their rates in coming weeks. However, Westpac will also target new home loan customers, offering rate cuts of up to 110 basis points for the first five years. Customers will then be offered a discount of 80 basis points for the life of their loan. National Australia Bank has yet to announce any changes to its interest rates for existing customers.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED

Cost of home loan less than 2017: RBA

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Original article by James Glynn
The Australian – Page: 22 : 19-Sep-18

A number of Australian lender have increased their mortgage interest rates since the Reserve Bank’s last board meeting on 4 September. However, the minutes of the meeting note that the cost of financing a home loan remains lower than at the same time in 2017. The Reserve Bank also observed that bank funding costs are still low by historical standards. In addition, the Reserve Bank gave indications that the next movement in the cash rate is likely to be upward, although this is not expected in the near-term.

CORPORATES
RESERVE BANK OF AUSTRALIA

Hagger NAB exit opens way for Baird

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 18 : 18-Sep-18

National Australia Bank has appointed former New South Wales premier Mike Baird as chief customer officer of consumer banking, after Andrew Hagger resigned as the head of consumer banking and wealth. Hagger said he will accept responsibility for the fee-for-no-service scandal that was exposed by the banking royal commission, and fund managers say his position had become untenable following the revelations. Baird, who is currently NAB’s head of corporate and institutional banking, is now regarded as a leading contender to eventually succeed CEO Andrew Thorburn.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WILSON ASSET MANAGEMENT, ALPHINITY CONCENTRATED AUSTRALIAN SHARE FUND, PERPETUAL LIMITED – ASX PPT, AMP LIMITED – ASX AMP, AUSTRALIAN GREENS, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF NEW ZEALAND, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLAYTON UTZ

AMP still taking fees from the dead

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Original article by Ben Butler, Michael Roddan
The Australian – Page: 3 : 18-Sep-18

Paul Sainsbury, the head of wealth management at AMP, appeared before the banking royal commission on 17 September. He told the inquiry that AMP had been charging life insurance customers a fee even after being informed that they had died. Sainsbury said the practice had been occurring since 2016, and the extent of the problem had been discovered after the royal commission was told earlier in 2018 that the Commonwealth Bank had engaged in similar practices.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, DOVER FINANCIAL ADVISERS PTY LTD, ALLIANZ AUSTRALIA LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BORAL LIMITED – ASX BLD, COCA-COLA AMATIL LIMITED – ASX CCL