K: Financial and Insurance Services

Banks to stick with advice charges

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Original article by Anthony Klan
The Australian – Page: 8 : 29-Jun-18

Westpac-owned BT recently stated that it will abolish so-called "grandfathered" advice charges for customers with legacy investment products. AMP, National Australia Bank, ANZ, and the Commonwealth Bank have indicated that they will still impose the charges. The Productivity Commission noted in a recent report that around 630,000 superannuation accounts are subject to trailing commissions, with such charges having a detrimental impact on their balances.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BT FINANCIAL GROUP PTY LTD, AMP LIMITED – ASX AMP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. PRODUCTIVITY COMMISSION

ASX sails to 8pc return with BHP leading the pack

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 29 : 29-Jun-18

Australia’s benchmark S&P/ASX 200 Index has posted a gain of 8.6 per cent prior to dividends so far in 2017-18, after rising 9.3 per cent in 2016-17. BHP Billiton, CSL and Macquarie Group have been the biggest contributors to the local market’s gains in the current financial year. Citigroup has forecast that the ASX 200 will rise to 6,500 points in 2018-19, while the consensus of analysts is for earnings-per-share growth of eight per cent in 2018-19.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BHP BILLITON LIMITED – ASX BHP, CSL LIMITED – ASX CSL, MACQUARIE GROUP LIMITED – ASX MQG, CITIGROUP PTY LTD, TELSTRA CORPORATION LIMITED – ASX TLS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP LIMITED – ASX AMP, RESERVE BANK OF AUSTRALIA, XERO LIMITED – ASX XRO, WISETECH GLOBAL LIMITED – ASX WTC, AFTERPAY TOUCH GROUP LIMITED – ASX APT, ALTIUM LIMITED – ASX ALU, APPEN LIMITED – ASX APX, BLOOMBERG LP, STANDARD AND POOR’S 500 INDEX, WILSON ASSET MANAGEMENT, ATLAS FUNDS MANAGEMENT PTY LTD, BIS OXFORD ECONOMICS PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

RBA sidelined as cost of money rises

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 28-Jun-18

Futures market pricing suggests that investors expect the Reserve Bank of Australia to keep official interest rates on hold until late 2019. However, the gap between the cash rate and the bank bill swap rate has increased to 61 basis points, compared with an average of 18 basis points for much of the last decade. The rise in the BBSW may eventually prompt Australia’s major banks to increase their mortgage interest rates independently of the RBA, with several of the nation’s smaller lenders having already done so.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF QUEENSLAND LIMITED – ASX BOQ, ME BANK, AMP BANK LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, IFM INVESTORS PTY LTD

Digital cash not on RBA agenda

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Original article by David Swan
The Australian – Page: 29 : 27-Jun-18

The Reserve Bank of Australia’s head of payments policy has downplayed the prospect that the central bank will introduce a digital version of the Australian dollar. Tony Richard says the RBA does not believe that there would be sufficient demand for a digital currency at present. He adds that a digital currency would have implications for the RBA’s financial stability mandate and the structure of the financial sector. Several fintech companies advocated the introduction of a digital Australian dollar in 2017.

CORPORATES
RESERVE BANK OF AUSTRALIA, FINTECH AUSTRALIA PTY LTD, AGRIDIGITAL, OTHERA, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED

ACCC slams health insurers

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Original article by Sarah-Jane Tasker
The Australian – Page: 17 & 28 : 26-Jun-18

Complaints to the Private Health Insurance Ombudsman rose by 30 per cent in 2016-17, with benefit payments again attracting the most complaints. The Australian Competition & Consumer Commission’s acting chair Delia Rickard says the health insurance sector needs to become more transparent about its policies if it wants to restore consumer trust. Australians paid around $A23.1 billion in health insurance premiums in 2016-17, an increase of $A1 billion over the previous year.

CORPORATES
PRIVATE HEALTH INSURANCE OMBUDSMAN, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, BUPA AUSTRALIA PTY LTD, MEDIBANK PRIVATE LIMITED – ASX MPL, THE HOSPITAL CONTRIBUTIONS FUND OF AUSTRALIA LIMITED, NIB HOLDINGS LIMITED – ASX NHF, HBF HEALTH LIMITED

Farm families forgotten in ANZ loan

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Original article by Sue Neales
The Australian – Page: 2 : 26-Jun-18

The banking royal commission’s current hearings are focusing on how banks such as the National Australia Bank and ANZ treat their farming clients. Ben Steinberg from ANZ, which acquired $A2.4 billion worth of farm loans from Landmark Financial Services in 2010, has conceded that it did not take into account the human impact of calling in bad loans and evicting farm families. He said that ANZ should have been more conscious of the fact that many Landmark customers were not used to dealing with a large bank.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, LANDMARK FINANCIAL SERVICES, RABOBANK AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RURAL BANK LIMITED, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN

Plea to end unhealthy RBA cash rate

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Original article by Jacob Greber
The Australian Financial Review – Page: 5 : 26-Jun-18

Economists James Morley from the University of Sydney and Mark Crosby of Monash University say the Reserve Bank of Australia needs to increase official interest rates. Crosby says the cash rate is at an "unhealthy level" at just 1.5 per cent and it is safe to begin tightening monetary policy. Morley argues that there is scope for at least two rate rises without having any adverse impact on the economy. Former RBA board member Warwick McKibbin has called for an increase in the cash rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNIVERSITY OF SYDNEY, MONASH UNIVERSITY, AUSTRALIAN NATIONAL UNIVERSITY, GOLDMAN SACHS AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

RBA’s Lowe urged to raise rates

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 6 : 25-Jun-18

The general consensus of market economists is that the Reserve Bank of Australia should leave official rates on hold at 1.5 per cent for the rest of 2018 and most of 2019. However, former RBA board member Warwick McKibbin says the central bank should increase the cash rate by at least 25 basis points, as interest rates are beginning to rise globally. He also argues that the RBA should gradually shift its focus from an inflation target of 2-3 per cent toward a nominal income target.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF ENGLAND, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF NEW YORK, EUROPEAN CENTRAL BANK, AUSTRALIAN NATIONAL UNIVERSITY, THE BROOKINGS INSTITUTION

Bank customer satisfaction declines during the Finance Royal Commission

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Original article by Roy Morgan
Market Research Update – Page: Online : 25-Jun-18

New research from Roy Morgan shows that bank customer satisfaction has dropped from 82.3% in January 2018, prior to the Finance Royal Commission, to 78.5% in May. This is the lowest monthly satisfaction level since May 2012, but it remains ahead of the long-term average of 74.0% calculated since 2001. The survey also shows that the level of dissatisfaction with banks has increased from 4.6% in January to 6.2%, and is now at the highest level since April 2012. These are the latest findings from the Roy Morgan Single Source survey, which includes over 4,000 interviews per month with bank customers.

CORPORATES
ROY MORGAN LIMITED

CBA gets green light for BBSW settlement

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Original article by James Frost
The Australian Financial Review – Page: 20 : 22-Jun-18

Federal Court judge Jonathan Beach has ruled that the Commonwealth Bank of Australia’s $A25m settlement for manipulating the bank bill swap rate is appropriate. Justice Jonathan Beach said the magnitude of the fines should be sufficient to deter similar misconduct. However, he criticised CBA’s bank bill traders for abusing their "privileged position" and questioned the adequacy of training and monitoring of the bank’s traders.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC