K: Financial and Insurance Services

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

Fees underpin Macquarie profit

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Original article by Michael Roddan
The Australian – Page: 21 : 12-Sep-17

Macquarie Group has advised that its profit for the first half of 2017-18 will be higher than previously due to an increase in performance fees. However, the investment bank has told an investor roadshow that it expects full-year profit to be similar to its $A2.22bn result for 2016-17. Macquarie’s earnings profile has benefited from the group’s increased focus on annuity-style operations, while the group has also highlighted its risk management practices.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP INCORPORATED, HILL SAMUEL BANK

Health insurers plan cheap policies for youth

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Original article by Andrew Tillett
The Australian Financial Review – Page: 3 : 12-Sep-17

Private Healthcare Australia CEO Rachel David says the private health insurance sector struggles to attract younger members. She was commenting on a proposal that would see younger Australians offered premiums at a discounted rate, with the Federal Government having been briefed about the idea. David does not think that older policy holders would object to the idea, as having more younger members in the system helps to offset the higher cost of older members, who tend to make claims more often.

CORPORATES
PRIVATE HEALTHCARE AUSTRALIA, EVALUATE, AUSTRALIA. DEPT OF HEALTH, AUSTRALIAN LABOR PARTY

NAB’s wealth builder vows to lift the game

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Original article by Cliona O’Dowd
The Australian – Page: 21 : 12-Sep-17

Matthew Lawrance, the recently appointed CEO of the National Australia Bank-owned MLC Super, acknowledges that there is a lack of trust and confidence in the superannuation sector that industry participants need to help restore. He says the media could help in this respect, by providing more balanced coverage of the sector. Noting that perhaps no more than 20 per cent of Australians seek financial advice, Lawrance says this is an area in which MLC Super could do more work.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC SUPER