K: Financial and Insurance Services

CBA reputation hammered by series of scandals

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Original article by James Thomson
The Australian Financial Review – Page: 13 & 18 : 19-Apr-18

The Commonwealth Bank is rated 57th in the Reputation Institute’s latest Australian Corporate Reputation Index, compared with 36th previously. The index was compiled in February and March, and followed a series of scandals and executive departures at the bank. However, the positions of Australia’s other three major banks were largely unchanged in the latest index. Air New Zealand has the highest ranking in the index for the second successive year, followed by Toyota and Qantas.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, REPUTATION INSTITUTE PTY LTD, AIR NEW ZEALAND LIMITED – ASX AIZ, TOYOTA MOTOR CORPORATION AUSTRALIA LIMITED, QANTAS AIRWAYS LIMITED – ASX QAN, BHP BILLITON LIMITED – ASX BHP, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SUNCORP GROUP LIMITED – ASX SUN, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AUSTRALIANSUPER PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RIO TINTO LIMITED – ASX RIO, MYER HOLDINGS LIMITED – ASX MYR, APPLE PTY LTD, MURRAY GOULBURN CO-OPERATIVE COMPANY LIMITED, ORIGIN ENERGY LIMITED – ASX ORG, AGL ENERGY LIMITED – ASX AGL, ENERGYAUSTRALIA PTY LTD

CBA eyes $4b spin-off of funds manager

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 13 & 16 : 18-Apr-18

The Commonwealth Bank of Australia has appointed John Mulcahy as the chairman of Colonial First State Global Asset Management ahead of its demerger and sharemarket float. Goldman Sachs values CFSGAM at between $A3.7bn and $A4.8bn, which could potentially make it the largest Australian IPO since Medibank Private in 2014. CBA opted for an IPO following a strategic review of CFSGAM, which boasts $A219bn worth of assets under management. CBA sold its life insurance business in 2017, and the latest divestiture will enable it to focus on its core banking business.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, GOLDMAN SACHS AUSTRALIA PTY LTD, MEDIBANK PRIVATE LIMITED – ASX MPL, MIRVAC GROUP – ASX MGR, SUNCORP GROUP LIMITED – ASX SUN, AIA GROUP LIMITED, ARNHEM INVESTMENT MANAGEMENT PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, REGAL FUNDS MANAGEMENT PTY LTD, NEW SOUTH WALES TREASURY CORPORATION, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, ECLIPX GROUP LIMITED – ASX ECX, MACQUARIE GROUP LIMITED – ASX MQG, FIDELITY INVESTMENTS AUSTRALIA LIMITED, ERNST AND YOUNG, JP MORGAN AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD

AMP admits dirty deeds and deceptions

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Original article by Ben Butler
The Australian – Page: 1 & 4 : 18-Apr-18

Shares in AMP fell sharply on 17 April after the banking royal commission heard further revelations of misconduct. Jack Regan, AMP’s head of financial advice, told the inquiry of multiple instance in which AMP had misled the Australian Securities & Investments Commission with regard to an investigation into a financial planning scandal. Amongst other things, the inquiry was told that AMP had falsely informed clients that they had been overcharged. Regan also said AMP’s relationship with Clayton Utz raised questions about the impartiality of the law firm’s investigation into the scandal.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, CLAYTON UTZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

RBA talks up rate rise, but not just yet

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Original article by David Rogers
The Australian – Page: 17 & 24 : 18-Apr-18

The minutes of the Reserve Bank’s latest board meeting show that board members expect monetary policy to be tightened rather than eased, although they have indicated that this is unlikely in the near-term given the outlook for inflation and unemployment. Meanwhile, Bill Evans of Westpac says the central bank is likely to downgrade its growth forecast for the Australian economy in 2018 from 3.25 per cent to three per cent in its next statement on monetary policy.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UBS HOLDINGS PTY LTD, CAPITAL ECONOMICS LIMITED

AMP admits to misleading ASIC 10 times

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Original article by Ben Butler
The Australian – Page: 1 & 2 : 17-Apr-18

AMP confessed to the banking royal commission on 16 April that it had misled the Australian Securities & Investments Commission on at least 10 occasions. Its deception related to a scheme that saw numerous customers charged fees for services they did not receive. With financial planning being the focus of the banking royal commission’s second round of public hearings, ASIC deputy chair Peter Kell said that in his opinion financial planners should not be able to refer to themselves as professionals, such has been their poor behaviour in recent years.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, STORM FINANCIAL LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

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

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

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