K: Financial and Insurance Services

Industry funds satisfying more at the top end

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Original article by Roy Morgan
Market Research Update – Page: Online : 9-Apr-18

A Roy Morgan Single Source shows that in February 2018, superannuation fund members with $250,000 or more had higher satisfaction with the financial performance of their industry funds compared to those belonging to either retail funds or those with a self-managed super fund. The highest satisfaction for industry funds was for those members with balances of $700,000 or more where they scored 87.8%, well ahead of SMSFs (82.5%) and retail funds (80.2%). Meanwhile, satisfaction with the financial performance of retail funds (61.4%) was higher than industry funds (49.7%) in accounts with balances of less than $5,000. For all other balances industry funds had higher satisfaction than retail funds. Of the 15 largest funds, QSuper with a satisfaction rating of 73.3% was well ahead of second-placed Cbus (68.2%) and UniSuper (67.8%).

CORPORATES
ROY MORGAN LIMITED, QSUPER LIMITED, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, UNISUPER LIMITED

ASIC’s Shipton warns banks to restore trust – or else

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Original article by Joyce Moullakis, James Eyers
The Australian Financial Review – Page: 1 & 12 : 6-Apr-18

Australian Securities & Investments Commission chairman James Shipton has urged banks to adopt standards that are comparable with those of a "genuine profession". He says that if they cannot do this themselves, then ASIC is quite prepared to impose further regulations on them. His comments come during the course of the banking royal commission, which is tipped to be quite critical of the sector when it hands down its findings.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMITTEE FOR ECONOMIC DEVELOPMENT OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED

Amid the swings hopes for rally build

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Original article by David Rogers
The Australian – Page: 30 : 6-Apr-18

The S&P 500 gained 10 per cent in February 2018, while Australia’s benchmark S&P/ASX 200 rose five per cent in response. Equities markets may experience a similar rally in April, with Australian banks in particular having the potential to perform well given that the S&P/ASX 200 banks index is currently at its lowest level for 18 months. Meanwhile, the S&P/ASX 200 is trading on a price-earnings multiple of 14.8 times, compared with its long-term average of about 14.4 times, according to Chris Nicol and Daniel Blake of Morgan Stanley.

CORPORATES
STANDARD AND POOR’S 500 INDEX, STANDARD AND POOR’S ASX 200 INDEX, MORGAN STANLEY AUSTRALIA LIMITED, STANDARD AND POOR’S ASX BANKS 200 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, NASDAQ COMPOSITE INDEX, NYSE FANG+ INDEX

APRA targets banker bonuses

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: W1 & W2 : 5-Apr-18

A review of remuneration in the banking, insurance and superannuation industry shows that senior executives are rarely penalised financially for poor risk management practices or misconduct among staff within their purview. Wayne Byers, the chairman of the Australian Prudential Regulation Authority – which undertook the review – says bank executives should be held more accountable, calling for their bonuses to be deferred or forgone. Frank Mirenzi of Moody’s Investors Service notes that many countries have cracked down on executive pay in the banking sector in the wake of the global financial crisis.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC

RBA keeps rates level for 18th meeting in row

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Original article by Jacob Greber
The Australian Financial Review – Page: 5 : 4-Apr-18

The general consensus of economists is that the Reserve Bank of Australia will not tighten monetary policy until 2019, after the cash rate was left unchanged at 1.5 per cent on 3 April. RBA governor Philip Lowe again stressed that there is likely to be a gradual fall in the unemployment rate and a rise in the inflation rate to the central bank’s target range. He also said low growth in wages is likely to persist for some time. The RBA has not adjusted official interest rates since August 2016.

CORPORATES
RESERVE BANK OF AUSTRALIA, INDEED INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

CBA captured 40pc of Aussie mortgages

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Original article by James Frost
The Australian Financial Review – Page: 17 : 4-Apr-18

Data supplied to the banking royal commission shows that a significant proportion of home loans sold by Aussie Home Loans in 2015 were those offered by its parent company, the Commonwealth Bank of Australia. Up to 39.7 per cent of the mortgages that Aussie Home Loans sold by volume in 2015 were from brands owned by the bank, including Bankwest and Aussie Select. Likewise, 37.5 per cent of mortgage loans sold by value were from CBA-owned brands. A key issue for the royal commission has been whether mortgage brokers are acting in the interests of their customers or the banks.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSSIE HOME LOANS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANK OF WESTERN AUSTRALIA LIMITED, AUSSIE SELECT

AMP and ASIC added to banking royal commission hit list

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Original article by James Frost
The Australian Financial Review – Page: 13 : 4-Apr-18

Financial advice will be the focus of the banking royal commission’s second round of public hearings, which will commence on 9 April. While the four major banks are likely to attract further scrutiny, AMP and its subsidiaries have also been asked to appear before the inquiry, along with officials from the Australian Securities & Investments Commission and industry bodies such as the Financial Planning Association of Australia and the Association of Financial Advisers.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LIMITED, ASSOCIATION OF FINANCIAL ADVISERS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, COMMONWEALTH FINANCIAL PLANNING LIMITED, COUNT FINANCIAL LIMITED, DOVER GROUP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RI ADVICE GROUP PTY LTD, MILLENNIUM 3 PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, BT FINANCIAL GROUP PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Facebook fallout hits technology stocks

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Original article by Supratim Adhikari
The Australian – Page: 17 & 26 : 29-Mar-18

Investor sentiment toward Australian-listed technology companies turned bearish on 28 March, in the wake of a similar sell-down on Wall Street. WiseTech Global was among the hardest hit, shedding 4.6 per cent to close at $A10.11, while Altium, Appen and Xero all fell by at least two per cent. Julia Lee of Bell Direct stresses that Australian technology stocks do not use large volumes of data so they are not exposed to the same risks as US peers such as Facebook. She does note that many local tech stocks are overvalued.

CORPORATES
WISETECH GLOBAL LIMITED – ASX WTC, ALTIUM CAPITAL LIMITED, APPEN LIMITED – ASX APX, XERO LIMITED – ASX XRO, BELL DIRECT, FACEBOOK INCORPORATED, CAMBRIDGE ANALYTICA LLC, NASDAQ, LINCOLN INDICATORS PTY LTD, GENTRACK GROUP LIMITED – ASX GTK, STANDARD AND POOR’S ASX 200 INDEX

Regional banks seek level playing field

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Original article by James Eyers
The Australian Financial Review – Page: 45 & 50 : 29-Mar-18

The Productivity Commission has received a joint submission from six regional banks in which they call for regulatory reforms to ensure that they remain competitive against larger rivals. Amongst other things, they have argued that the Federal Government’s implicit guarantee to bail out the "big four" in the event of a financial crisis gives them a competitive advantage when seeking funding via wholesale debt markets. The regional banks have also called for changes to the policy that requires them to have higher levels of capital for loans that have an equivalent risk.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AMP BANK LIMITED, SUNCORP GROUP LIMITED – ASX SUN, ME BANK, MYSTATE LIMITED – ASX MYS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA

NAB investors kept in dark

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Original article by Sarah Danckert
The Age – Page: 23 : 28-Mar-18

National Australia Bank’s 2017 annual report included a contingent liability for measures aimed at ensuring compliance with anti-money laundering laws. However, the minutes of NAB’s risk committee meeting in November 2015 show that the bank was dealing with issues of non-compliance with anti-money laundering laws that had been identified by Austrac in an on-site compliance assessment in April of that year.

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