K: Financial and Insurance Services

NAB’s check on mortgage deferrals

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 15 : 18-May-20

The National Australia Bank announced in March that it would offer a six-month repayment reprieve to mortgage loan customers impacted by COVID-19, with 80,000 borrowers taking up its offer. It stated then it would wait for three months before contacting borrowers to see if they are able to start making payments again, but it has begun the process after just two months. All the other major banks have confirmed they will wait the three months before getting in touch with borrowers. A NAB spokesperson says it has commenced the process ahead of time to ensure it has got in contact with all relevant borrowers before the "three-month checkpoint". Recent figures from the Australian Banking Association reveal that 429,000 borrowers have sought a pause on their repayments since late March.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BANKING ASSOCIATION

Investors should brace for another sharemarket sell-off, warn analysts

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Original article by Euan Black
The New Daily – Page: Online : 12-May-20

The S&P/ASX200 has gained more than 20 per cent since 23 March, rebounding from a major sell-off in response to the coronavirus pandemic. Glenn Leese of TradingView cautions that the local bourse may retreat again; he notes that sharemarkets often rally after a big fall, only to incur an even larger slump. He adds that sharemarket crashes and corrections normally occur in a series of three waves, and the local market is currently experiencing its second wave.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, TRADINGVIEW

Secondary capital raisings ease on hope of reopening

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Original article by Glenda Korporaal
The Australian – Page: 20 : 7-May-20

Data from ASX Limited shows that IPO activity slowed significantly in April, with seven new listings raising a combined $97m. This compares with the $1.2bn that was raised from new listings in April 2019. In contrast, the total value of capital raisings by companies that are already listed rose from just $2.3bn in April 2019 to $13.3bn. Max Cunningham, the executive general manager of listings and issuer services, expects the slowdown in IPOs to continue while coronavirus restrictions remain in place.

CORPORATES
ASX LIMITED – ASX ASX

Medibank mulls cash refunds

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Original article by Joyce Moullakis
The Australian – Page: 16 : 7-May-20

Health fund Medibank Private expects its earnings and dividends to be in line with previous guidance, despite the coronavirus pandemic. Customers will save about $120m after Medibank opted to delay premium increases for six months, while CEO Craig Drummond has indicated that it may be open to providing partial refunds due to a fall in claims during the lockdown. NIB Holdings recently flagged the possibility of providing fund members with cash rebates due to the coronavirus.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, NIB HOLDINGS LIMITED – ASX NHF

Handle the market with care: ASIC

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Original article by Eli Greenblat
The Australian – Page: 13 & 20 : 7-May-20

The Australian Securities & Investments Commission has expressed concern about a rise in day-trading activity among so-called ‘mum and dad’ investors during the coronavirus lockdown. ASIC notes that even market professionals often find it hard to time the market during volatile trading conditions, and it warns that retail investors risk incurring significant losses at a time when many cannot afford to do so. ASIC also notes that more retail investors are trading in complex investment products such as contracts for difference.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Westpac dividend chance good as zero

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Original article by James Frost
The Australian Financial Review – Page: 19 : 6-May-20

Victor German of Macquarie and Matthew Wilson from Evans & Partners are among the analysts who do not expect Westpac to pay an interim dividend for 2019-20. However, German believes that Westpac could pay a final dividend of $0.40 per share, and Wilson forecasts a payout of $0.35. Brendan Sproules of Citigroup is more bullish, forecasting a final dividend of $0.65. Citi has a share price target of $26 for Westpac.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, EVANS AND PARTNERS ASIA FUND – ASX EAF, CITIGROUP PTY LTD

Put reform on fast track: Westpac

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Original article by Joyce Moullakis
The Australian – Page: 13 & 17 : 5-May-20

Westpac has reported cash earnings of $993m for the first half of 2019-20, which is 70 per cent lower than previously. As previously flagged, the half-year result was marred by impairment charges totalling $2.23bn, including some $1.6bn for coronavirus-related loan losses. Westpac has deferred a decision on the payment of an interim dividend, while CEO Peter King has urged the national cabinet to move quickly to restart the economy when the pandemic abates. He has forecast a V-shaped economic recovery in 2021.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC

Bad debts hang over Westpac dividend plans

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Original article by James Frost, Aleks Vickovich, James Eyers
The Australian Financial Review – Page: 15 & 19 : 4-May-20

Westpac’s dividend payout is likely to be a key focus for investors when its half-year financial results are released on 4 May. Westpac has already advised of $1.6bn in impairment charges for coronavirus-related loan losses. Matt Williams of Airlie Funds Management says Westpac should not pay an interim dividend, arguing that investors expect companies to preserve capital in the current environment. David Walker of Clime Asset Management in turn expects Westpac to pay a much lower half-year dividend and opt for a dividend reinvestment plan.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AIRLIE FUNDS MANAGEMENT PTY LTD, CLIME ASSET MANAGEMENT PTY LTD

Are Australia’s big four banks equipped for recession?

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Original article by Ian Verrender
abc.net.au – Page: Online : 4-May-20

The general expectation is that Australia’s major banks will ride out the coronavirus-induced economic downturn relatively unscathed. However, contrary to popular opinion, the nation’s financial system did not cope well with the global financial crisis; indeed, the federal government had to underwrite bank loans and guarantee deposits. Meanwhile, Australia’s banks now have significant exposure to the residential and commercial property sectors. With unemployment likely to reach double digits, there will be growing pressure on already heavily indebted households; demand for office space will also fall as more people become jobless or work from home permanently, which will in turn reduce commercial property values.

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APRA to probe super payouts

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

The Australian Prudential Regulation Authority generally expects superannuation funds to release money under the federal government’s early access scheme within five business days. APRA requires super funds to provide it with a range of data every week regarding the early access regime, and a spokesman says it is prepared to pursue enforceable action against funds that do not pay eligible members within an appropriate time-frame. APRA is collecting both industry-level and fund-level data, which will be publicly disclosed.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY