K: Financial and Insurance Services

Bankers ready for GFC-style raising spree

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Original article by Anthony Macdonald, Sarah Thompson
The Australian Financial Review – Page: 15 & 20 : 6-Apr-20

Australian companies are looking to equity funding to assist them through the COVID-19 pandemic, and private equity firms are eager to participate in possible transactions. The ASX has temporarily amended its listing rules to allow companies to raise more funds via non-renounceable rights issues and share placements, while coronavirus-impacted companies that are tipped to undertake equity raisings include Virgin Australia, Sydney Airport and Tabcorp.

CORPORATES
ASX LIMITED – ASX ASX, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, SYDNEY AIRPORT – ASX SYD, TABCORP HOLDINGS LIMITED – ASX TAH, WEBJET LIMITED – ASX WEB, FLIGHT CENTRE TRAVEL GROUP LIMITED – ASX FLT, SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, CORPORATE TRAVEL MANAGEMENT LIMITED – ASX CTD, BORAL LIMITED – ASX BLD, JAMES HARDIE INDUSTRIES PLC – ASX JHX, KATHMANDU HOLDINGS LIMITED – ASX KMD, NEXTDC LIMITED – ASX NXT, COCHLEAR LIMITED – ASX COH

Big super warns of cash-in risk

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Original article by Joanna Mather, Tony Boyd, Aleks Vickovich
The Australian Financial Review – Page: 1 & 8 : 3-Apr-20

Treasury has forecast that about $27bn in total will be withdrawn from superannuation funds after the federal government relaxed the rules governing early access for people who have been impacted by the pandemic. AustralianSuper CEO Ian Silk notes that industry estimates suggest that withdrawals could top $50bn. He adds that some super funds may struggle to cope with a big increase in withdrawals, but stresses that it will not be an issue for AustralianSuper. Silk also warns that a surge in withdrawals will affect the super industry’s capacity to invest in and recapitalise businesses when the crisis abates.

CORPORATES
AUSTRALIANSUPER PTY LTD

Westpac chief Peter King eyes fast restart

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Original article by James Frost
The Australian Financial Review – Page: 1 & 20 : 3-Apr-20

Westpac has appointed Peter King as CEO for the next two years. King, who has been acting CEO since September, says 22,000 of Westpac’s 33,000 employees are now working from home in response to the coronavirus; typically it is around 1,000. Westpac has had 100,000 requests for assistance from customers and 26,000 requests for help from small businesses since the banking sector launched its response to the virus. King says Westpac will looking at businesses that can recover quickly once the worst of COVID-19 is over in terms of the ones it decides to assist.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC

Reserve Bank could lend money to super funds to help cover coronavirus withdrawals

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Original article by Ben Butler
The Guardian – Page: Online : 31-Mar-20

The federal government has predicted that as much as $27 billion could be withdrawn from super funds under rules allowing people who lose their jobs as a result of COVID-19 to withdraw up to $20,000, but some funds suggest that it could be as much as $60 billion. The Reserve Bank is understood to be working out how it might set up a government-backed facility to assist funds to pay withdrawals, although Treasurer Josh Frydenberg has thus far rejected the idea. The government’s decision to introduce a wage subsidy to keep people in work could mean the level of withdrawals may not be as great as previously forecast.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

‘We’re bloody lucky we’ve got them’: from pariahs to saviours

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Original article by James Frost, James Eyers
The Australian Financial Review – Page: 1 & 7 : 31-Mar-20

Australia’s major banks have received 170,000 requests from households and businesses to defer loan repayments due to the coronavirus pandemic. However, bank CEOs warn that despite being well-capitalised, the sector will need to be very selective with regard to the businesses that it chooses to assist, and those that are already failing cannot expect to receive a financial lifeline. Reserve Bank of Australia board member Ian Harper notes that the crisis has provided banks with an opportunity to redeem themselves following the revelations of misconduct exposed by the Hayne royal commission.

CORPORATES
RESERVE BANK OF AUSTRALIA

Super funds lose billions as crisis hits

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Original article by Michael Roddan
The Australian – Page: 15 & 22 : 25-Mar-20

The financial market turmoil caused by the coronavirus pandemic has weighed on asset valuations in the superannuation industry. AustralianSuper has slashed the value of its portfolio of unlisted assets by 7.5 per cent, while IFM Investors has cut the valuations of its Australian unlisted assets by an average of 7.6 per cent. Both group have exposure to a range of infrastructure assets, such as airports and toll roads. Other super funds are also reviewing the value of their unlisted assets.

CORPORATES
AUSTRALIANSUPER PTY LTD, IFM INVESTORS PTY LTD

Super fund satisfaction at risk as markets tumble

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Original article by Roy Morgan
Market Research Update – Page: Online : 25-Mar-20

New data in Roy Morgan’s Superannuation Satisfaction Report shows that CARE Super has the highest customer satisfaction rating, at 74.5%. Self-managed funds scored the highest average satisfaction when compared to other sectors. The Superannuation Satisfaction Report, with data up to February 2020, shows CARE Super on 74.5%, an increase of 9.2% on 12 months ago. It placed ahead of Tasplan on 72.8% (+6.9%), Unisuper on 72.7% (+1.5%) and Cbus on 71.0% (+5.0%). Roy Morgan CEO Michele Levine says that given recent heavy losses in equities markets due to the Coronavirus pandemic, these levels of customer satisfaction may be the highest we see for some time. The report’s findings are from Roy Morgan Single Source, Australia’s most trusted consumer survey, compiled by in-depth interviews with over 50,000 Australians each year.

CORPORATES
ROY MORGAN LIMITED, CARE SUPER PTY LTD, TASPLAN LIMITED, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND

Banks race to roll out SME loans

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Original article by Joyce Moullakis
The Australian – Page: 15 & 18 : 23-Mar-20

The federal government will underwrite 50 per cent of new loans made by eligible lenders to small and medium enterprises as part of its response to the coronavirus crisis. Westpac’s acting CEO Peter King says the SME Guarantee Scheme will provide "significant support" to SMEs, while he supports moves to allow people in financial hardship to access their superannuation. The rollout of the scheme in New South Wales and Victoria has been complicated by moves to lockdown non-essential services in coming days, as banks work to keep as many branches open as possible in those states.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

APRA relaxes buffers as CBA slashes rates

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Original article by James Eyers, James Frost
The Australian Financial Review – Page: 19 & 22 : 20-Mar-20

The Australian Prudential Regulation Authority will temporarily ease the "unquestionably strong" equity capital buffers that it imposes on banks. This will allow them to make billions of dollars worth of additional loans to small businesses that are struggling to maintain cashflows during the coronavirus crisis. The Commonwealth Bank responded to APRA’s announcement by cutting its interest rates on small business loans by 100 basis points, while it also cut rates on one-, two- and three-year fixed-rate home loans by 70 basis points.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Branchless banks raise the bar as ME Bank and ING lead customer satisfaction ratings

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Original article by Roy Morgan
Market Research Update – Page: Online : 18-Mar-20

New financial data from Roy Morgan shows that ME Bank has the highest banking customer satisfaction among home loan customers, at 92.3%. ME Bank is followed by ING (91.4%), Bendigo Bank (85.8%) and BankSA (83.7%). CBA enjoys the highest home loan customer satisfaction of any of the big four banks, with a rating of 74.1%. Total home loan customer satisfaction with the big four banks is 72.4%. The satisfaction of non-home loan customers follows a similar trend. ING leads the way with a rating of 88.6%, followed by Bendigo Bank (87.9%), ME Bank (85.7%) and Suncorp (80.5%). CBA again has the highest rating of the big four banks, with 79.3% of its non-home loan customers indicating satisfaction with the bank. Total non-home loan customer satisfaction with the big four banks is now at 77.1%. These banking satisfaction ratings are from the Roy Morgan Single Source survey, in-depth face-to-face interviews with over 50,000 Australians each year in their homes.

CORPORATES
ROY MORGAN LIMITED, ME BANK, ING BANK (AUSTRALIA) LIMITED, BENDIGO BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SUNCORP BANK