K: Financial and Insurance Services

Credit mischief costs banks $50m

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Original article by Joanna Mather
The Australian Financial Review – Page: 4 : 15-Feb-18

The financial services royal commission will initially focus on banks’ responsible lending practices in relation to credit cards, home loans and car finance packages. Meanwhile, new figures show that the Australian Securities & Investments Commission has ordered banks to pay $A50m in refunds and compensation to credit card customers over the last two years. Westpac, ANZ and Citi are among the banks that have been forced to reimburse customers during this period.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIBANK PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

Share indexes tipped to test recent lows

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Original article by David Rogers
The Australian – Page: 27 : 15-Feb-18

Bank of America Merrill Lynch’s Bull & Bear Indicator suggests that global equities face a further pullback and could fall to around the level seen during the recent sharemarket rout. Meanwhile, BAML’s latest survey of fund managers shows that respondents’ average cash balance has risen by 0.3 per cent to 4.7 per cent, while equity allocation has fallen by 12 per cent and bond allocation has fallen to the lowest level in two decades.

CORPORATES
BANK OF AMERICA NA, MERRILL LYNCH AND COMPANY INCORPORATED, MSCI ALL COUNTRY WORLD INDEX, UNITED STATES. FEDERAL RESERVE BOARD, WESTPAC BANKING CORPORATION – ASX WBC

NAB posts $1.65b in Q1 cash profit

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Original article by James Frost
The Australian Financial Review – Page: 21 : 9-Feb-18

Shares in National Australia Bank closed 2.3 per cent higher at $A28.90 on 8 February, after the major bank reported a cash profit of $A1.65bn for the first quarter of 2017-18. The result was three per cent higher than previously, while there was a 2.4 per decline in bad and doubtful debts. However, NAB’s expenses increased by four per cent during the quarter, and the bank expects expenses to rise by another 5-8 per cent during the remainder of the financial year. Citigroup has upgraded its recommendation on NAB’s shares to "buy".

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CITIGROUP PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, INVESTORS MUTUAL LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Low inflation, low unemployment, and Lowe restraint

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Original article by David Uren
The Australian – Page: 1 & 6 : 9-Feb-18

Reserve Bank governor Philip Lowe has indicated that an interest rate rise is now more likely than a rate cut. However, he says the central bank is unlikely to tighten monetary policy until inflation rises around the mid-point of its target range of 2-3 per cent and there is a further reduction in the unemployment rate. He has stressed that the Reserve Bank does not need to adjust monetary policy in line with other central banks. Lowe also says the Reserve Bank does not expect its inflation forecasts to be unduly affected by the recent sharemarket volatility.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Bargain hunters happy to take the risks

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Original article by David Rogers
The Australian – Page: 30 : 9-Feb-18

Australian investors returned to the sharemarket on 8 February, seeking buying opportunities among stocks that had been heavily sold down in the recent sharemarket rout. Blue-chip stocks in particular attracted buying activity. However, investors should be mindful that financial market volatility can persist for some time, and the pace at which the US Federal Reserve tightens monetary policy will be a key factor in the outlook for equities.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE GROUP LIMITED – ASX MQG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, CREDIT SUISSE AG, STANDARD AND POOR’S 500 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, UNITED STATES. DEPT OF THE TREASURY, LPL FINANCIAL LLC

CBA’s half-year profit misses expectations

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Original article by James Frost
The Australian Financial Review – Page: 13 & 16 : 8-Feb-18

The Commonwealth Bank of Australia has posted a 2017-18 interim cash profit of $A4.73bn, which is 1.9 per cent lower than previously. The result was marred by $A575m worth of provisions, including some $A375m associated with Austrac’s investigation into money-laundering allegations. CBA’s cash profit rose 5.8 per cent to $A5.11 billion if the provisions are excluded. Meanwhile, CBA’s retail banking division has reported a cash profit of $A2.653bn, an increase of eight per cent, while its business and private banking division’s cash profit rose by nine per cent to $A960m.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, ARGO INVESTMENTS LIMITED – ASX ARG, PERENNIAL INVESTMENT PARTNERS LIMITED

Choice urges Hayne focus on unfair fees

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 15 : 8-Feb-18

Consumer group Choice has used its submission to the banking royal commission to urge the inquiry to examine issues such as the use of trailing commissions in the financial services sector and the methods used to calculate fees and charges. Choice has argued that unfair fees is a key issue that the general public would like the royal commission to address. Choice has also criticised the financial services industry’s self-regulation regime, noting the shortcomings of self-regulation for insurers in particular.

CORPORATES
AUSTRALIAN CONSUMERS’ ASSOCIATION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Shaky markets signal more share pain on way

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Original article by David Rogers
The Australian – Page: 17 & 27 : 8-Feb-18

Futures pricing suggests that the US sharemarket will experience further volatility, despite a rebound on 7 February. The bearish investor sentiment of recent days has prompted renewed support for "safe-haven" assets, including US government bonds and currencies such as the yen. Meanwhile, the Chicago Board Options Exchange’s Volatility Index briefly rose above 50 per cent on 7 February, compared with just 11.5 per cent a week earlier. However, Jeremy Lawson of Aberdeen Standard Investments does not expect global sharemarket volatility to be sustained.

CORPORATES
CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, ABERDEEN STANDARD INVESTMENTS, CREDIT SUISSE AG, BELL ASSET MANAGEMENT LIMITED – ASX BLM, STANDARD AND POOR’S 500 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S ASX 200 INDEX, FTSE 100 INDEX, NIKKEI 225 INDEX, SHANGHAI COMPOSITE INDEX, HANG SENG INDEX

Lib MP growls over layer of BEAR red tape

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 6-Feb-18

The Greens will seek amendments to the Federal Government’s Banking Executive Accountability Regime in the Senate, after the legislation was passed by the lower house on 5 February. Liberal MP Nicolle Flint opposed the BEAR regime, arguing that it will further increase the compliance burden for the financial sector, noting that it has been subject to a spate of new rules and regulations in recent years. The BEAR regime, which is slated to take effect in July, has the support of the Australian Labor Party.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN GREENS, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY

$30bn shares wipeout prompts fears bull run at an end

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Original article by David Rogers
The Australian – Page: 1 : 6-Feb-18

Richard Coppleson of Bell Potter says the global equities market sell-off will create excellent buying opportunities when it has run its course. Futures pricing suggests that Wall Street will shed a further 0.6 per cent when trading resumes, after the Dow Jones Industrial Average fell 2.5 per cent on 2 February. The Australian bourse is likely to follow its lead, after shedding 1.6 per cent on 5 February.

CORPORATES
BELL POTTER SECURITIES LIMITED, STANDARD AND POOR’S ASX 200 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, CSI 300 INDEX, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, STANDARD AND POOR’S 500 INDEX, WESFARMERS LIMITED – ASX WES, TARGET AUSTRALIA PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, PENGANA CAPITAL GROUP LIMITED – ASX PCG, RESERVE BANK OF AUSTRALIA