K: Financial and Insurance Services

‘Good debt’ to underwrite Future Fund

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Original article by Andrew White
The Australian – Page: 19 & 22 : 1-Sep-17

The Future Fund has posted an annual return of 8.7 per cent for 2016-17, compared with its target return of 6.9 per cent. However, chairman Peter Costello says returns and asset values are likely to be affected by an expected rise in interest rates. He adds that the Federal Government’s decision to postpone drawdowns by five years will allow the sovereign wealth fund to cover all unfunded public sector super liabilities, which are forecast to top $A200bn in 2021. The Government will increase what Treasurer Scott Morrison labels "good" debt to fund super liabilities between 2021 and 2026.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIA. DEPT OF THE TREASURY, UNIVERSITY OF TASMANIA, QIC LIMITED, PORT OF MELBOURNE

Time is past for banks royal commission policy

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Original article by David Crowe
The Australian – Page: 2 : 1-Sep-17

Australian banks are attracting increased regulatory scrutiny in the wake of the Commonwealth Bank’s money-laundering scandal. This has weakened the Australian Labor Party’s case for a royal commission into banks, as such an inquiry would take some time to set up if Labor wins the next federal election. Meanwhile, Labor may not be able to act on the inquiry’s recommendations until after the following election. Labor increased the Australian Securities & Investments Commission’s regulatory powers when it was previously in government, and it could so again without the need for a royal commission.

CORPORATES
AUSTRALIAN LABOR PARTY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Banks use rules to stifle rivals: Morrison

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 1-Sep-17

Federal Treasurer Scott Morrison says changes to the banking sector’s regulatory regime are needed as established banks are using the existing rules to stymie competition and make it hard for new players to enter the market. He has told a Bloomberg forum that the Federal Government’s proposed regulatory changes are aimed at empowering bank customers. Morrison has also ruled out making the Banking Executive Accountability Regime retrospective.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. PRODUCTIVITY COMMISSION, BLOOMBERG LP, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN LABOR PARTY

HSBC joins mortgage war with 3.6pc home loan

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Original article by Glenda Korporaal
The Australian – Page: 19 & 22 : 1-Sep-17

HSBC Australia CEO Martin Tricaud says the international bank intends to ramp up its local presence, with plans to expand its branch network from 31 outlets to 47 over the next two years. HSBC also aims to increase its Australian home loans business, with owner-occupiers who take out a mortgage before the end of 2017 to be offered an interest rate of 3.65 per cent. Tricaud says the Australian banking sector offers strong growth potential for HSBC, whose market share is about 1.5 per cent at present.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, HSBC BANK PLC, AUSSIE HOME LOANS LIMITED

CBA needs outside CEO in ‘brutal market’

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Original article by Jonathan Shapiro, James Thomson
The Australian Financial Review – Page: 17 : 31-Aug-17

The Commonwealth Bank of Australia’s money laundering scandal has focused attention on succession planning, with CEO Ian Narev set to step down by mid-2018. Perennial’s John Murray says CBA should select an external candidate, as the market considers any internal contenders to be tainted by the scandal. Morningstar also expects Narev’s successor to be an external appointment. Meanwhile, National Australia Bank CEO Andrew Thorburn says the bank has stressed the importance of its culture and values in meetings with staff in recent months.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, PERENNIAL VALUE MANAGEMENT AUSTRALIAN EQUITY FUND, MORNINGSTAR PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CREDIT SUISSE (AUSTRALIA) LIMITED, TRANS-TASMAN BUSINESS CIRCLE, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, BHP BILLITON LIMITED – ASX BHP, ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, BORAL LIMITED – ASX BLD, DOWNER EDI LIMITED – ASX DOW

‘Don’t throw away growth for dividends’

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Original article by Andrew White, David Rogers
The Australian – Page: 17 & 28 : 31-Aug-17

Data from Credit Suisse shows that 60 per cent that have a 30 June balance data increased their dividend payout in the August 2017 reporting season, while 31 per cent reduced their dividends. Perennial Value Management MD John Murray has welcomed the decision of some companies to increase their capital expenditure rather than returns to shareholders. Wilson Asset Management chairman Geoff Wilson notes that the increase in capex during the current reporting season is the strongest since 2007.

CORPORATES
PERENNIAL VALUE MANAGEMENT LIMITED, WILSON ASSET MANAGEMENT, CREDIT SUISSE (AUSTRALIA) LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, AMP LIMITED – ASX AMP, CALTEX AUSTRALIA LIMITED – ASX CTX, NUFARM LIMITED – ASX NUF, SKYCITY ENTERTAINMENT GROUP LIMITED – ASX SKC, AMCOR LIMITED – ASX AMC, AGL ENERGY LIMITED – ASX AGL, APA GROUP – ASX APA

Foreign regulators focus on CBA

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Original article by Michael Roddan
The Australian – Page: 17 & 22 : 30-Aug-17

The Australian Prudential Regulation Authority’s inquiry into the Commonwealth Bank of Australia continues to weigh on the banking sector. There is concern that CBA may come under scrutiny by APRA’s overseas counterparts in the wake of its money-laundering scandal. Credit Suisse has reduced its share price target for CBA by 10 per cent and warned of a governance crisis at the bank. Brian Johnson of CLSA notes that CBA could potentially incur much harsher penalties in offshore jurisdictions for breaching money laundering laws than in Australia.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CREDIT SUISSE (AUSTRALIA) LIMITED, CLSA AUSTRALIA PTY LTD, ARGO INVESTMENTS LIMITED – ASX ARG, COMMINSURE, STORM FINANCIAL LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, FEDERAL COURT OF AUSTRALIA, HONG KONG (CHINA). MONETARY AUTHORITY, SINGAPORE. MONETARY AUTHORITY

Investors take cover from Kim’s missile over Japan

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Original article by David Rogers
The Australian – Page: 17 & 24 : 30-Aug-17

Sharemarkets in the Asia-Pacific region retreated on 29 August, after North Korea fired a missile over Japan’s main islands. Futures pricing suggests that the S&P 500 will also fall as geopolitical tensions on the Korean peninsula increase. Meanwhile, the yield on 10-year US Treasuries reached a two-month low and the gold price peaked at a nine-month high of $US1,322.41 an ounce. Sue Trinh of RBC says financial markets’ initial response to the latest missile test was "relatively shallow" and short-lived.

CORPORATES
RBC CAPITAL MARKETS, STANDARD AND POOR’S 500 INDEX, STANDARD AND POOR’S ASX 200 INDEX, KOSPI INDEX, NIKKEI 225 INDEX, HANG SENG INDEX, SHANGHAI COMPOSITE INDEX, JAPAN. OFFICE OF THE PRIME MINISTER, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, UNITED NATIONS. SECURITY COUNCIL, UNITED STATES. DEPT OF STATE, NOMURA AUSTRALIA LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CREDIT SUISSE (AUSTRALIA) LIMITED, BLACKMORES LIMITED – ASX BKL, CALTEX AUSTRALIA LIMITED – ASX CTX, REGIS RESOURCES LIMITED – ASX RRL, RETAIL FOOD GROUP LIMITED – ASX RFG, MANTRA GROUP LIMITED – ASX MTR, DOWNER EDI LIMITED – ASX DOW, SPEEDCAST INTERNATIONAL LIMITED – ASX SDA, UBS HOLDINGS PTY LTD

Visa moves to kill PINs with biometrics

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Original article by Yolanda Redrup
The Australian Financial Review – Page: 19 : 29-Aug-17

Visa hopes it will not be too long before its card users will be able to do away with using PIN number or 16-digit card numbers to conduct transactions. Visa is looking to work with Australian banks to adopt biometric authentication protocols that will allow card users to make transactions by using their fingerprint, with the process aimed at both reducing fraud and cutting down transaction times. Visa’s Joe Cunningham would also like to see greater data sharing between banks and merchants.

CORPORATES
VISA INTERNATIONAL, AUSTRALIAN PAYMENTS CLEARING ASSOCIATION LIMITED

APRA probe risks CBA rating

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Original article by Jonathan Shapiro, Phillip Coorey, James Eyers
The Australian Financial Review – Page: 1 & 6 : 29-Aug-17

The Australian Prudential Regulation Authority will establish an independent panel to review the Commonwealth Bank of Australia’s governance, culture and accountability. CBA CEO Ian Narev has described the review, which follows a series of scandals at the nation’s largest bank, as a "positive and constructive step". However, ratings agencies S&P Global and Fitch have warned that CBA’s credit rating could be downgraded if the review results in any adverse findings. Shadow treasurer Chris Bowen maintains that a royal commission into the entire banking sector is needed.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, S&P GLOBAL RATINGS, FITCH RATINGS LIMITED, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX, WILSON ASSET MANAGEMENT, FINANCE SECTOR UNION