K: Financial and Insurance Services

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

Prepare for drawn-out downturn

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Original article by Richard Gluyas
The Australian – Page: 13 & 17 : 1-May-20

The ANZ Bank has posted an interim cash profit of $1.41bn, which is 60 per cent lower than previously. The result was marred by impairment charges totalling $1.7bn, while a decision on its half-year dividend will be deferred until August due to uncertainty regarding the economic impact of the coronavirus pandemic. ANZ’s common equity tier one ratio has fallen to 10.8 per cent, compared with 11.5 per cent a year ago. Meanwhile, CEO Shayne Elliott says the Australian economy is unlikely to experience a V-shaped recovery.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Westpac braces for virus shock

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 29-Apr-20

Westpac has advised that its half-year accounts will include a pre-tax impairment charge of $2.24bn. This includes a $1.6bn provision for coronavirus-related loan losses. However, CEO Peter King says the bank is well-positioned to absorb an increase in loan losses, while Westpac does not expect the impairment charges to have much effect on its common equity tier-one capital ratio. Westpac is not expected to undertake a capital raising, having raised some $2.77bn from investors in November. Westpac will release its interim results on 4 May.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC

Virus-plagued NAB seeks $3.5bn

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Original article by Richard Gluyas
The Australian – Page: 13 & 17 : 28-Apr-20

National Australia Bank has posted a 2019-20 interim net profit of $1.3bn, compared with $2.7bn previously. Loan impairments rose to $1.2bn due to a sharp increase in provisions due to the coronavirus, while NAB has reduced its interim dividend from $0.83 per share to just $0.30. NAB shares were suspended from trading on 27 April pending a $3.5bn capital raising, which comprises a $3bn institutional placement and a $500m share purchase plan. Meanwhile, NAB is bearish about the outlook for the economy and unemployment in the near-term.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Crisis spurs a rush to raise capital

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Original article by Ben Wilmot, Glenda Korporaal, Perry Williams
The Australian – Page: 13 & 17 : 28-Apr-20

National Australia Bank, Charter Hall Retail REIT and Monash IVF are among the latest companies to undertake capital raisings. Australian-listed companies have now raised more than $15bn from investors during the coronavirus pandemic, and Simon Ranson of JP Morgan expects this trend to continue. However, some companies have attracted criticism for giving preference to certain investors in the allocation of new shares.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CHARTER HALL RETAIL REIT – ASX CQR, MONASH IVF GROUP LIMITED – ASX MVF, JP MORGAN AUSTRALIA LIMITED