K: Financial and Insurance Services

Yellen defends Fed’s gradual rate rise plan

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Original article by David Harrison
The Australian – Page: 28 : 28-Sep-17

Financial markets have priced in a 77.9 per cent chance of a rise in US interest rates in December following a speech by Federal Reserve chair Janet Yellen, compared with 72.8 per cent previously. The central bank has flagged one more rate rise in 2017 and further tightening of monetary policy over the next several years. However, Yellen has told a conference that the outlook for inflation will influence how rapidly interest rates are increased. Inflation has remained below the Federal Reserve’s target of two per cent for some time.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, NATIONAL ASSOCIATION FOR BUSINESS ECONOMICS, FEDERAL RESERVE BANK OF NEW YORK, FEDERAL RESERVE BANK OF CHICAGO

Bendigo Bank has highest customer satisfaction among majors

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 28-Sep-17

A Roy Morgan Single Source survey has found that customer satisfaction with Bendigo Bank in August 2017 was 89.3%, making it the top performer among the 10 largest consumer banks. Not only was Bendigo the satisfaction leader but it improved its rating over the month by 0.9% points, against an overall decline of 0.2% points for banks in total. Other small banks such as ING Direct with 86.7%, Bank of Queensland (84.2%), Suncorp (83.0%) and St George (82.0%) also had high customer satisfaction ratings. The best performer among the four majors was the CBA with 80.2%, followed by Westpac on 78.5%, NAB (78.4%) and ANZ (77.3%). The overall average satisfaction for all banks was 80.8% in August. Meanwhile, the mortgage customers of each of the big four banks continue to be a drag on their overall satisfaction, despite historically low home-loan rates.

CORPORATES
ROY MORGAN RESEARCH LIMITED, BENDIGO BANK, ING DIRECT, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP BANK, ST GEORGE BANK LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Competition probe shakes ‘four pillars’

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 20-Sep-17

Australian Competition & Consumer Commission chairman Rod Sims says it has a "neutral" position on the issue of mergers between the nation’s four major banks. However, the ACCC has used its submission to the Productivity Commission’s inquiry into competition in the financial system to urge it to examine the impact of the so-called "four pillars" policy. The ACCC has also asked the inquiry to consider whether the four pillars policy should be expanded to include smaller banks.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. PRODUCTIVITY COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Low income earners hit hardest by fees

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Original article by Michael Roddan
The Australian – Page: 22 : 20-Sep-17

KPMG has released a report which shows that the average superannuation fund balance on retirement is 6.2 per cent lower for members who have a default life insurance policy. However, life insurance fees means the average super balance on retirement is 14 per cent lower in the case of women whose annual income is less than $A37,000. Default insurance accounted for about 50 per cent of the $A14bn worth of insurance benefits that were paid out in the three years to June 2016. The Insurance in Superannuation Working Group will release its draft code of practice on 20 September.

CORPORATES
KPMG AUSTRALIA PTY LTD, INSURANCE IN SUPERANNUATION WORKING GROUP, RICE WARNER ACTUARIES PTY LTD, RAINMAKER INFORMATION SERVICES PTY LTD, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIA. PRODUCTIVITY COMMISSION

BIS warns on risks of digital currency

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Original article by Richard Gluyas
The Australian – Page: 20 : 19-Sep-17

The Bank for International Settlements has noted the increased interest in cryptocurrencies like Bitcoin, while observing that such currencies could be issued by central banks. However, it notes that not enough has been done to assess the risks associated with digital currencies, including how resilient cryptocurrencies issued by central banks would be to cyberattacks. Meanwhile, JP Morgan Chase CEO Jamie Dimon has referred to bitcoin as a "fraud", saying that any JP Morgan employee found to be trading in it would be sacked on the spot.

CORPORATES
BANK FOR INTERNATIONAL SETTLEMENTS, JP MORGAN CHASE AND COMPANY

Home loan arrears hit five-year high

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 4 : 19-Sep-17

The percentage of Australian mortgages on which a payment is more than 30 days overdue stood at 1.62 per cent in May 2017, according to Moody’s. This figure represents the highest level of mortgage arrears in five years, with arrear rates at record levels in South Australia, Western Australia and the Northern Territory. Arrear rates declined in both New South Wales and Victoria.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S (AUSTRALIA) PTY LTD

Small banks aim at APRA

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 8 : 18-Sep-17

Bank of Queensland CEO Jon Sutton says caps imposed by the Australian Prudential Regulation Authority on investor lending make it hard for smaller banks to increase their market share. Bendigo & Adelaide Bank CEO Mike Hirst contends that APRA’s lending caps have required it to cut down on the number of loans it writes. Shadow treasurer Chris Bowen claims that the lines of responsibility between the various regulators of the financial services sector have become "blurred" in recent years.

CORPORATES
BANK OF QUEENSLAND LIMITED – ASX BOQ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN LABOR PARTY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, RESERVE BANK OF AUSTRALIA, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. PRODUCTIVITY COMMISSION, ME BANK, SUNCORP GROUP LIMITED – ASX SUN, AMP LIMITED – ASX AMP, ING BANK (AUSTRALIA) LIMITED, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

ASIC still gathering evidence against CBA: Medcraft

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Original article by Michael Roddan
The Australian – Page: 21 : 15-Sep-17

The Australian Securities & Investments Commission will shortly commence legal action against three of the nation’s four major banks over allegation that they manipulated the bank bill swap rate. However, ASIC chairman Greg Medcraft has told parliament’s economics committee that it is still investigating the Commonwealth Bank over rigging of the BBSW. The bank is also being investigated by ASIC for possible breaches of its continuous disclosure obligations regarding the money-laundering scandal.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, LIBERAL PARTY OF AUSTRALIA

King cash dethroned as cards lead a revolution at the till

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Original article by Richard Gluyas
The Australian – Page: 23 : 15-Sep-17

The ­Reserve Bank of Australia’s latest triennial customer payments survey highlights the continuing decline in the use of cash as a payment option, in favour of debit and credit cards. The proportion of consumer transactions that were carried out with cash has fallen from 70 per cent in 2007 to just 37 per cent in fiscal 2016. However, cash remains the most popular payment option for transactions costing less than $A10, while cash is still widely used by older people. There was also a 20 per cent decline in payments via cheque in 2016-17.

CORPORATES
RESERVE BANK OF AUSTRALIA

QBE chief out as investors revolt

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Original article by Michael Roddan
The Australian – Page: 19 & 22 : 13-Sep-17

QBE Insurance Group has advised that Pat Regan will succeed CEO John Neal in January 2018. Neal’s resignation after five years in the role follows a 25 per cent fall in the general insurer’s share price since it revealed another earnings downgrade in June. QBE has announced a total of eight such downgrades since he took the helm. Shares in QBE closed 2.5 per cent higher at $A10.50 on 12 September.

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, VELOCITY TRADE LIMITED, INSURANCE COUNCIL OF AUSTRALIA LIMITED, AVIVA PLC