K: Financial and Insurance Services

Mergers of super funds to cut costs

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Original article by Joyce Moullakis
The Australian – Page: 17 : 21-May-21

Consolidation in Australia’s superannuation industry has increased in recent years, including the upcoming merger between LGIAsuper and Energy Super. The merged entity will have $22bn worth of assets under management, which will increase to $28bn when it completes a deal to acquire Suncorp’s wealth business. LGIAsuper CEO Kate Farrar believes that smaller funds will continue to have a role in the super industry, although she expects the average size of boutique funds to increase to between $30bn and $50bn.

CORPORATES
LGIASUPER, ENERGY SUPER

Small super funds return a higher level of satisfaction for investors

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 17 : 17-May-21

Research by CoreData shows that superannuation funds with assets of less than $20bn outperform their larger peers in terms of customer satisfaction. Smaller funds received an overall score of 63 among members who have retired and a score of 53.2 with regard to preparedness for retirement. In contrast, large super funds received a rating of 57.7 among retirees and just 46.9 among pre-retirees. The survey of more than 4,000 respondents has coincided with a regulatory push for smaller super funds to merge.

CORPORATES
COREDATA PTY LTD

Budget 2021: Stock winners and losers

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Original article by David Rogers
The Australian – Page: 24 : 13-May-21

Macquarie Equities has identified stocks that are likely to benefit from measures in the federal government’s May 2021 Budget. The extension of the instant asset write-off for businesses should boost the sales of companies such as JB Hi-Fi and Wesfarmers, while CSR, CIMIC and Seven Group are among the stocks that should benefit from the government’s move to ramp up infrastructure investment and provide further stimulus for the housing sector. Meanwhile, travel-related stocks were sold down on 12 May after the government signalled that Australia’s international borders will not re-open for some time.

CORPORATES
JB HI-FI LIMITED – ASX JBH, WESFARMERS LIMITED – ASX WES, CSR LIMITED – ASX CSR, CIMIC GROUP LIMITED – ASX CIM, SEVEN GROUP HOLDINGS LIMITED – ASX SVW, MACQUARIE EQUITIES LIMITED

Earnings jump sees CBA eye buybacks

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Original article by Joyce Moullakis
The Australian – Page: 17 : 13-May-21

The Commonwealth Bank of Australia has posted unaudited cash earnings from continuing operations of $2.4bn for the March quarter, compared with about $1.3bn for the same period in 2020. CBA’s common equity tier one ratio was 12.7 per cent at the end of the quarter, well above the regulatory requirement of 10.5 per cent. CBA has more than $10bn of excess capital, and CEO Matt Comyn says its capital management plans are likely to be a key focus for investors when its full-year earnings are released in August. Brett Le Mesurier of Velocity Trade expects CBA to return up to $12bn to investors in the 2022 and 2023 fiscal years via a share buyback

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, VELOCITY TRADE LIMITED

Loan deferral scheme a win for economy

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Original article by James Frost
The Australian Financial Review – Page: 19 : 28-Apr-21

More than 468,000 home loan customers in Australia were on deferred repayment plans at the height of the COVID-19 pandemic; this had fallen to 3,170 by the end of March. Likewise, the number of small business borrowers who have deferred their loan repayments has fallen from 235,440 to just 508. Overall, just 0.5 per cent of all loans are still on a ‘repayment holiday’. The loan deferral scheme ended on 31 March, but Australian Banking Association CEO Anna Bligh says the nation’s banks will continue to provide support for distressed households and businesses.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION

Challenge for AMP over pay, fund deal

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Original article by Joyce Moullakis
The Australian – Page: 17 : 26-Apr-21

AMP’s proposal to spin off its private markets division is set to be a key focus of its virtual AGM on 30 April. Brett Le Mesurier of Velocity Trade has downgraded his share price target for AMP in response to the demerger proposal, which followed AMP’s decision to terminate negotiations with Ares Management over a full or partial sale of the business. Meanwhile, two proxy advisers have recommended that shareholders vote in favour of AMP’s remuneration report, while ISS has called for investors to reject it.

CORPORATES
AMP LIMITED – ASX AMP, ARES CAPITAL MANAGEMENT LLC, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED

Westpac could halve its network: analysts

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Original article by Richard Gluyas
The Australian – Page: 17 : 22-Apr-21

Brendan Sproules of Citigroup says Westpac could significantly reduce costs by rationalising its network of bank branches and divesting non-core assets. Westpac currently has 958 branches nationwide, but Citigroup’s modelling suggests that there is scope to reduce this to just 518. Westpac’s chief financial officer Michael Rowland will outline a cost-cutting strategy when the bank releases its interim results on 3 May.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CITIGROUP PTY LTD

Super shines as economy bounces back

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 19 : 21-Apr-21

Data from Chant West shows that the median growth superannuation fund achieved a return of 12.2 per cent in the first nine months of 2020-21. Mano Mohankumar of Chant West says super funds are on track to deliver a double-digit return for the financial year. The median growth fund gained 3.3 per cent in the March quarter and 2.2 per cent so far in April. Hostplus and Sunsuper are among the growth funds that have posted returns of more than 20 per cent so far in 2020-21.

CORPORATES
CHANT WEST FINANCIAL SERVICES PTY LTD, HOST-PLUS, SUNSUPER PTY LTD

RAA tops for general insurance customer satisfaction – marginally ahead of RACT, RAC and Shannons

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Original article by Roy Morgan
Market Research Update – Page: Online : 21-Apr-21

The latest Roy Morgan General Insurance Satisfaction report shows that South Australia-based RAA had the highest general insurance satisfaction rating of 94% in December 2020, an increase of 3% on a year ago. It is followed by Tasmania’s RACT with a customer satisfaction rating of 92% (down 1%), Western Australia’s RAC on 92% (up 5%) and Suncorp Group-owned Shannons on 91% (up 1%). The largest improvement among the leaders for general insurance satisfaction has been by the Suncorp Group’s Bingle, which increased customer satisfaction by 8% points during 2020 to an impressive 88%. The larger general insurance brands which cater to a more diverse range of customers nation-wide have also had a good year, with improvements in customer satisfaction across the board. The big improvers include CommInsure (up 8% points on a year ago), Budget Direct (up 8% points), Allianz (up 5% points), and the larger State-based RACQ in Queensland (up 5% points) and NRMA in NSW (up 3% points). Overall in December 2020 a majority of 82% of Australians are satisfied with their general insurer, up 3% points from the same time a year ago (79%). These latest results are based on in-depth interviews conducted with over 50,000 consumers per annum, including over 35,000 with general insurance.

CORPORATES
ROY MORGAN LIMITED, RAA INSURANCE LIMITED, RACT INSURANCE PTY LTD, RAC INSURANCE PTY LTD, SHANNONS, BINGLE.COM PTY LTD, SUNCORP GROUP LIMITED – ASX SUN, COMMINSURE, BUDGET DIRECT INSURANCE AGENCY PTY LTD, ALLIANZ AUSTRALIA LIMITED, RACQ INSURANCE LIMITED, NRMA INSURANCE LIMITED

Boost for IPO market as Fahour’s Latitude soars on debut

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Original article by Joyce Moullakis
The Australian – Page: 13 & 17 : 21-Apr-21

Shares in non-bank lender Latitude Financial closed at $2.70 on 20 April, four per cent above the stock’s listing price of $2.60. Latitude reached an intra-day high of $2.99, and the stock finished its first day of trading with a market capitalisation of about $2.7bn. Latitude’s successful sharemarket debut after several failed attempts in the past is likely to bolster the IPO market; indeed, a number of rival non-bank lenders are considering a sharemarket float, including SocietyOne and Pepper Australia.

CORPORATES
LATITUDE FINANCIAL SERVICES GROUP LIMITED – ASX LFS, SOCIETYONE AUSTRALIA PTY LTD, PEPPER AUSTRALIA PTY LTD