K: Financial and Insurance Services

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

Despite the gloom, this is the best reporting season in years

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Original article by Patrick Commins
The Australian Financial Review – Page: 11 & 26 : 29-Aug-17

Financial market analysts argue that negative perceptions of the August 2017 reporting season are not justified. Jason Steed of JP Morgan notes that 123 stocks in the S&P/ASX 200 Index have risen so far in August, while he adds that investors’ perceptions of the reporting season are often influenced by a handful of stocks that post large declines in the wake of their earnings results. Hasan Tevfik of Credit Suisse says the capital expenditure intentions of ASX 200 companies also demonstrates the strength of the reporting season.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AUSTRALIA LIMITED, CREDIT SUISSE (AUSTRALIA) LIMITED, BLUESCOPE STEEL LIMITED – ASX BSL, HEALTHSCOPE LIMITED – ASX HSO, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, QBE INSURANCE GROUP LIMITED – ASX QBE, SUNCORP GROUP LIMITED – ASX SUN, TELSTRA CORPORATION LIMITED – ASX TLS, FORTESCUE METALS GROUP LIMITED – ASX FMG, WOODSIDE PETROLEUM LIMITED – ASX WPL

Home loan borrowers snub banks

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Original article by Michael Bleby
The Australian Financial Review – Page: 17 : 25-Aug-17

Mortgage Choice has reported a 2016-17 net profit of $A22.2 million, up 13.5 per cent. Mortgage Choice’s shares were trading up three per cent at $A2.36 on the back of its result, while it declared a fully franked dividend of $A0.09 per share. Mortgage Choice’s loan book rose by 3.2 per cent to $A53.4 billion over the year, while CEO John Flavell commented that non-bank lenders had increased their share of Australia’s home loan market over the period.

CORPORATES
MORTGAGE CHOICE LIMITED – ASX MOC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MACQUARIE SECURITIES PTY LTD

Two strikes rule reining in exec pay

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Original article by Joanna Mather
The Australian Financial Review – Page: 3 : 24-Aug-17

The Australian Council of Superannuation Investors has released the findings of a survey which shows that the top listed companies have not significantly increased their CEOs’ salaries in the last 10 years. The annual fixed pay of S&P/ASX 100 CEOs has been steady at about $A1.9m, while bonuses have also been relatively steady. ACSI CEO Louise Davidson notes that the trend has coincided with the introduction of the "two strikes" rule.

CORPORATES
AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, STANDARD AND POOR’S 500 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, CHALLENGER LIMITED – ASX CGF, MACQUARIE GROUP LIMITED – ASX MQG, JAMES HARDIE INDUSTRIES PLC – ASX JHX, WESTFIELD CORPORATION – ASX WFD, PREMIER INVESTMENTS LIMITED – ASX PMV, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, CSL LIMITED – ASX CSL, FORTESCUE METALS GROUP LIMITED – ASX FMG, QANTAS AIRWAYS LIMITED – ASX QAN