K: Financial and Insurance Services

Pressure builds for AMP break-up

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Original article by Joyce Moullakis
The Australian – Page: 13 & 16 : 12-Oct-20

Simon Mawhinney of Allan Gray Australia says breaking up AMP would be the best option for unlocking the wealth manager’s value. He adds that if a suitor opts to acquire the entire company they are likely to sell off parts of the business. AMP recently revealed plans to undertake a portfolio review, and its board is believed to be planning to update investors on a possible sale of all or part of the company before the end of 2020. Alan Kwan of Australian Eagle Asset Management says AMP may choose to press ahead with a turnaround plan, given the challenges involved in ‘disentangling’ and divesting parts of the business.

CORPORATES
AMP LIMITED – ASX AMP, ALLAN GRAY AUSTRALIA PTY LTD, AUSTRALIAN EAGLE ASSET MANAGEMENT PTY LTD

Banks stay cautious despite lending shift

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Original article by Cliona O’Dowd
The Australian – Page: 15 : 28-Sep-20

Investors Mutual founder Anton Tagliaferro does not expect the federal government’s proposal to scrap responsible lending laws to make a "material difference" to Australia’s banks. He says banks tend to be very cautious during a recession, adding that this is likely to continue going into 2021. Tagliaferro adds that banks are likely to be focused on existing loans in the near-term, as repayment deferral periods come to an end. Meanwhile, he expects the federal Budget on 6 October to include tax cuts and measures aimed at boosting jobs.

CORPORATES
INVESTORS MUTUAL LIMITED

Give more help to borrowers: APRA

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Original article by Cliona O’Dowd
The Australian – Page: 17 : 23-Sep-20

Repayments on more than 900,000 mortgage and business loans were deferred in late March due to the coronavirus pandemic. Many borrowers are now facing the six-month anniversary of their deferral, and the Australian Prudential Regulation Authority has offered lenders a number of suggestions about how to handle customers who are slated to resume repayments. Amongst other things, APRA has suggested that lenders should contact borrowers via a number of channels in the lead-up to the expiry of their deferral period. National Australia Bank CEO Ross McEwan recently indicated that 20 per cent of these customers have failed to respond when it has contacted them regarding the issue.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Fed says rates will stay near zero until 2023

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Original article by Nick Timiraos
The Australian – Page: 24 : 18-Sep-20

The US Federal Reserve left interest rates unchanged at its latest policy meeting, with all 17 central bank officials indicating that they expect interest rates to remain at a record low until at least the end of 2021. In addition, 13 of the Federal Reserve officials have indicated that interest rates are likely to remain at close to zero until the end of 2023. Meanwhile, the central bank officials now expect the US unemployment rate to average about 7-8 per cent in the December quarter.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD

Super withdrawals hit $32bn as rush slows

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Original article by Lachlan Moffet Gray
The Australian – Page: 15 : 8-Sep-20

Data from the Australian Prudential Regulatory Authority shows that $32.6bn has now been withdrawn from superannuation funds via the federal government’s early access scheme. However, there is evidence to suggest that the rate of withdrawals is slowing, with just $380m paid out to fund members in the week to 30 August. This is the lowest weekly total since the scheme began. Meanwhile, Brendan Coates of the Grattan Institute says the scheme’s impact on retirement income has been overstated, although ACTU president Michele O’Neil disagrees with this view.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, GRATTAN INSTITUTE, ACTU

Giant IOOF to lift its game after MLC buy

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Original article by Cliona O’Dowd
The Australian – Page: 17 & 19 : 1-Sep-20

IOOF Holdings has reported a 2019-20 underlying net profit of $128.8m, which is 35 per cent lower than previously, with revenue up 10 per cent at $1.17bn. Meanwhile, IOOF will boast $510bn worth of funds under management following its deal to acquire MLC, making it Australia’s largest retail wealth manager. CEO Renato Mota says the $1.4bn deal is ‘transformational’ for both IOOF and the broader wealth management industry. The deal with National Australia Bank will be partially funded via a $1.04bn capital raising.

CORPORATES
IOOF HOLDINGS LIMITED – ASX IFL, MLC LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Cbus silent on coal in new carbon reduction policy

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Original article by James Fernyhough
The Australian Financial Review – Page: 18 : 1-Sep-20

Industry superannuation fund Cbus is seeking to reduce the carbon footprint of its investments by 45 per cent by 2030, while aiming for a net zero emissions investment portfolio by 2050. Fellow industry funds HESTA and First State have been explicit about their intention to divest thermal coal assets, but Cbus has declined to follow their example. Cbus has links to the Construction, Forestry, Maritime, Mining & Energy Union, which has members working in the coal industry. Cbus’s chief investment officer Kristian Fok says its decision not to specifically divest coal assets was in part based on insight gained from members working in the coal sector.

CORPORATES
CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED, FIRST STATE, CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION OF AUSTRALIA

AMP to reveal damning report

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Original article by Joyce Moullakis
The Australian – Page: 15 & 19 : 20-Aug-20

Wealth manager AMP has advised that it will release the report of an independent investigation into the sexual harassment allegations against Boe Pahari. The investigation was undertaken in 2017, and the lawyers representing complainant Julia Szlakowski say that she never received a copy of the full report of the investigation. Pahari was appointed as CEO of AMP Capital in July. Australian Council of Superannuation Investors CEO Louise Davidson contends that Pahari’s position is untenable.

CORPORATES
AMP LIMITED – ASX AMP, AMP CAPITAL INVESTORS LIMITED, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED

Results so far are a shot in the arm for investors

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Original article by David Rogers
The Australian – Page: 23 : 20-Aug-20

The S&P/ASX 200 has gained two per cent since the start of the August reporting season. Investors have responded positively to earning results, dividend payouts and outlook guidance, as well as a rally in the S&P 500 and the continued strength of commodity prices. Indeed, dividend announcements were a common factor among many stocks that outperformed on 19 August; likewise, a lack of dividend payments contributed to some stocks being sold down.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX

CBA investors brace for lower payout

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Original article by Cliona O’Dowd
The Australian – Page: 15 : 10-Aug-20

The consensus of analysts is that the Commonwealth Bank of Australia’s 2019-20 cash earnings will be 10 per cent lower than previously, at $7.6bn. UBS expects the coronavirus pandemic to prompt CBA to increase its impairment charges for the second half to $1.9bn, which includes a $1.5bn COVID-related provision that the bank announced earlier in the year. Meanwhile, UBS forecasts that CBA shareholders will receive a final dividend of $0.95 per share, which would be in line with the Australian Prudential Regulation Authority’s revised guidance.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UBS HOLDINGS PTY LTD