K: Financial and Insurance Services

Banks discuss new standards council option

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Original article by James Frost, James Eyers
The Australian Financial Review – Page: 17 : 16-Apr-18

The second week of the banking royal commission’s public hearings will commence on 16 April, with financial planning to be the initial focus. AMP executive Anthony Jack Regan and Australian Securities & Investments Commission deputy chairman Peter Kell are both expected to appear before the commission on 16 April. Meanwhile, talks involving the formation of a Professional Banking Council are continuing, with banks, regulators and industry associations involved in the discussions.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, FINANCIAL SERVICES INSTITUTE OF AUSTRALASIA, AUSTRALIAN BANKERS’ ASSOCIATION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Boards appoint more women than men

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Original article by Sally Patten
The Australian Financial Review – Page: 3 : 13-Apr-18

Fifty-two per cent of directors appointed to the boards of S&P/ASX 200 companies in the first three months of 2018 were female, according to the Australian Institute of Company Directors. This compares to 36 per cent for the same period in 2017, and 44 per cent for the same period in 2016. Companies that appointed female directors in the March 2018 quarter include Whitehaven Coal, Beach Energy and Flight Centre. AICD chair Elizabeth Proust suggests that one reason for the growing number of female directors is research which suggests that diversity is good for a company’s bottom line.

CORPORATES
AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, WHITEHAVEN COAL LIMITED – ASX WHC, BEACH ENERGY LIMITED – ASX BPT, FLIGHT CENTRE TRAVEL GROUP LIMITED – ASX FLT, DAVID JONES LIMITED, PREMIER INVESTMENTS LIMITED – ASX PMV, PACIFIC BRANDS LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, ARGO GLOBAL LISTED INFRASTUCTURE LIMITED – ASX ALI, INVOCARE LIMITED – ASX IVC, THORN GROUP LIMITED – ASX TGA, NONI B LIMITED – ASX NBL, COMPUTERSHARE LIMITED – ASX CPU, METCASH LIMITED – ASX MTS, OIL SEARCH LIMITED – ASX OSH, VOCUS GROUP LIMITED – ASX VOC, ACSI INTERNATIONAL PTY LTD

Activism to rise as M&A at highest since 2007

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 25 : 13-Apr-18

Data from Dealogic shows that $US32.8bn ($A42.3bn) worth of mergers and acquisitions have been announced in Australia so far in 2018. Neil Pathak of Gilbert + Tobin says M&A activity in the near-term is unlikely to be affected by heightened financial market volatility or concerns about a trade war between the US and China. The law firm also anticipates that shareholder activists will continue to target listed companies.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, GILBERT AND TOBIN LAWYERS, BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, ARDENT LEISURE GROUP – ASX AAD, QUINTIS LIMITED – ASX QIN, AWE LIMITED – ASX AWE, ISENTIA GROUP LIMITED – ASX ISD, MYER HOLDINGS LIMITED – ASX MYR, SANTOS LIMITED – ASX STO, HARBOUR ENERGY LIMITED, TRIBECA INVESTMENT PARTNERS PTY LTD, BENNELONG FUNDS MANAGEMENT PTY LTD, WESTFIELD CORPORATION – ASX WFD, UNIBAIL-RODAMCO, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD

Westpac reveals tough move against liar loans

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Original article by Duncan Hughes
The Australian Financial Review – Page: 34 : 12-Apr-18

Westpac will introduce stricter disclosure criteria for people seeking a home loan from mid-April. Amongst other things, mortgage applications will be required to provide more extensive information on their expenditure in order to qualify for a loan. The move is aimed at cracking down on so-called "liar loans". Independent analysis suggests that about 20 per cent of mortgage applications overstate their income and almost 50 per cent understate their expenditure.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, EQUIFAX INCORPORATED, EXPERIAN AUSTRALIA PTY LTD, ILLION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

First rate rise will shock, warns RBA’s Lowe

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Original article by Jacob Greber
The Australian Financial Review – Page: 10 : 12-Apr-18

Reserve Bank of Australia governor Philip Lowe has reiterated that there is likely to be a gradual increase in economic growth and wages, which should ensure that interest rates remain on hold in the near-term. Lowe also used an Australia-Israel Chamber of Commerce speech to emphasise that the cash rate is expected to rise rather than fall when the central bank next adjusts monetary policy, and he noted that interests have not risen for more than seven years. Some economists now expect the cash rate to remain at 1.5 per cent until 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA-ISRAEL CHAMBER OF COMMERCE

Inquiry can be a circuit breaker

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Original article by David Rogers, Ben Butler
The Australian – Page: 17 & 26 : 10-Apr-18

Former Westpac CEO David Morgan says he is unsure whether the bonus schemes used by banks deliver high levels of integrity. Morgan values the importance of a productive workplace culture that is combined with high integrity. He thinks the financial services royal commission could act as a "circuit breaker" for the banks in improving their reputations in the wake of a series of scandals. The wealth management arms of the big four banks will come under the commission’s scrutiny when it begins its next round of hearings in the week beginning 16 April.

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

New chief Comyn pledges to restore confidence in CBA

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Original article by Michael Roddan
The Australian – Page: 17 & 20 : 10-Apr-18

Commonwealth Bank of Australia CEO Matt Comyn has told staff that he is committed to changing the culture at the bank in the wake of a series of scandals. Comyn conceded that CBA had not done enough to protect the interests of its customers, and apologised for the mistakes made by himself and other top executives. Brett Le Mesurier of Shaw & Partners says acting on the recommendations of the banking royal commission will be a key challenge for Comyn, who formally succeeded Ian Narev as CEO on 9 April.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SHAW AND PARTNERS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSSIE HOME LOANS LIMITED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MAURICE BLACKBURN PTY LTD, UBS HOLDINGS PTY LTD, FEDERAL COURT OF AUSTRALIA

How to pick a winner as tariff tensions rise

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Original article by David Rogers
The Australian – Page: 26 : 10-Apr-18

Hasan Tevfik of Credit Suisse says a trade war between the US and China would negatively affect economic growth, bond markets and shares. He adds that investors should factor in the potential impact of an increase in tariffs, although a large-scale trade war is unlikely to occur. Tevfik says BHP Billiton, Fortescue Metals Group and QBE Insurance Group are among the Australian-listed companies that would be hard hit by increased protectionism by the US and China. He also warns of the potential for a further rise in bond yields.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, QBE INSURANCE GROUP LIMITED – ASX QBE, SIMS METAL MANAGEMENT LIMITED – ASX SGM, MONADELPHOUS GROUP LIMITED – ASX MND, BLUESCOPE STEEL LIMITED – ASX BSL, NUFARM LIMITED – ASX NUF, QANTAS AIRWAYS LIMITED – ASX QAN, BOEING COMPANY, STANDARD AND POOR’S ASX 200 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Banks betting on AI to win back trust

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Original article by Yolanda Redrup
The Australian Financial Review – Page: 16 : 9-Apr-18

IBM executive Marc Andrews believes that Australia’s banks will be looking to make use of artificial intelligence to help restore their corporate image in the wake of the banking royal commission. IBM’s work with banks in the area of AI has focused on a number of key areas, including regulatory compliance and anti-money laundering strategies. Andrews says other areas where banks can make use of AI include helping to prevent bullying, sexism and discrimination in their workplaces, and in the identification of poor culture within teams.

CORPORATES
IBM CORPORATION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Reputation tops Comyn’s CBA to-do list

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Original article by James Thomson
The Australian Financial Review – Page: 13 & 16 : 9-Apr-18

Matt Comyn will formally succeed Ian Narev as CEO of the Commonwealth Bank of Australia on 9 April. His immediate priority is expected to be taking action to address the damage that a series of scandals have caused to CBA’s reputation. However, Yarra Capital Management’s MD Dion Hershan says CBA remains a strong business with a sound strategy, and any damage to its reputation is likely to be temporary. Meanwhile, Hamish Chalmers of Watermark Funds Management says reducing costs should be CBA’s priority over the next five years.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, YARRA CAPITAL MANAGEMENT, WATERMARK FUNDS MANAGEMENT PTY LTD, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, ABN AMRO BANK NV, ING BANK NV