K: Financial and Insurance Services

Greedy banks protect profits: ACCC

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Original article by Cliona O’Dowd, David Ross
The Australian – Page: 15 : 28-Apr-20

The Australian Competition & Consumer Commission has released the interim report of its Home Loan Price Inquiry. It has concluded that the nation’s four major banks failed to pass on the full 75 basis point reduction in the cash rate during 2019 in order to protect their profits. The ACCC also found that existing home loan customers tend to pay higher interest rates than new borrowers. Steve Mickenbecker of Canstar says it is a ‘lethargy tax’ rather than a ‘loyalty tax’, and the onus should be on existing customers to actively request a lower interest rate.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, CANSTAR PTY LTD

Billions of early super released

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 17 : 24-Apr-20

The Australian Taxation Office has already approved 456,000 applications from superannuation fund members who want to utilise the federal government’s early access scheme. Some $3.8m worth of withdrawals have been approved since the scheme opened on 20 April; more than 900,000 people had previously registered interest in the scheme, which is restricted to fund members who have experienced financial hardship due to the pandemic. Association of Super Funds of Australia CEO Martin Fahy has downplayed concerns that some super funds may face liquidity issues due to the early access scheme.

CORPORATES
AUSTRALIAN TAXATION OFFICE, AUSTRALIA. DEPT OF THE TREASURY, THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED

CBA delays all SME repayments

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Original article by Max Maddison
The Australian – Page: 17 : 24-Apr-20

The Council of Small Business Organisations’ deputy chairman David Gandolfo has welcomed the Commonwealth Bank’s decision to defer loan repayments for many small business customers until the end of June. The loan deferral will automatically apply to small business accounts that have lending limits of less than $5m, although these customers can opt to continue making repayments. Business customers with loans of between $5m and $10m will be able to defer repayments for six months due to the impact of the pandemic.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, COUNCIL OF SMALL BUSINESS ORGANISATIONS OF AUSTRALIA LIMITED

Hopes of V-shaped recovery likely to be dashed

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Original article by David Rogers
The Australian – Page: 20 : 24-Apr-20

The global sharemarket has recovered about 50 per cent of the losses incurred in the sell-off during February and March. However, a further V-shaped recovery for equities is likely to be dependent on the global economy being restarted quickly. A V-shaped economic recovery is also unlikely, according to economists. Josh Williamson of Citigroup expects Australia’s economic growth to fall by 5.8 per cent in 2019-20, before rebounding by 6.1 per cent in 2020-21. However, he does not expect the economy to return to pre-virus growth levels until late 2021.

CORPORATES
CITIGROUP PTY LTD

ASX equities to be hit by forced selling as workers grab super

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Original article by Melissa Yeo
The Australian – Page: 20 : 23-Apr-20

Matthew Ross of Goldman Sachs estimates that up to $44bn could be withdrawn from superannuation funds by people who have been financially hit by the pandemic, compared with the federal government’s forecast of $27bn. The early access scheme may result in liquidity issues for some super funds, which could in turn be forced to reduce their exposure to shares. Ross says this could potentially reduce the benchmark S&P/ASX 200’s market ­capitalisation by around 0.45 per cent.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX

$A doing its job to help stabilise the economy

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Original article by Sarah Turner, Jonathan Shapiro
The Australian Financial Review – Page: 31 : 22-Apr-20

The Reserve Bank of Australia has bought $47bn worth of federal and state government bonds since 20 March. The central bank has progressively reduced its daily bond purchases from $5bn to just $500m since then, and it will now buy federal government bonds three times a week and state bonds just once a week. Meanwhile, RBA governor Philip Lowe says the Australian dollar fell more sharply than he had expected in March. It reached a low of $US0.5741 and has since recovered to around $US0.63. Lowe says the currency has been a "great shock-absorber" for the domestic economy over the last three decades.

CORPORATES
RESERVE BANK OF AUSTRALIA

Self-Managed and Public Sector Super Funds increase satisfaction in March, but Industry & Retail both down

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Apr-20

New data from Roy Morgan’s Superannuation Satisfaction Report shows that Self-Managed Funds and Public Sector Funds both increased their satisfaction in March, despite significant market upheaval with the ASX200 falling significantly from its February record high. As a sector, Self-Managed Funds have the highest level of customer satisfaction (75.0%), up 0.3% from February, followed by Public Sector Funds on 74.5% (+0.3%). In contrast, satisfaction with Industry Funds fell by 1.1% in a month to 64.4%, while Retail Funds were down 0.2% to 60%. The report’s findings come from the Roy Morgan Single Source survey, Australia’s most comprehensive and trusted consumer survey.

CORPORATES
ROY MORGAN LIMITED

NAB reveals $1.4bn writedowns

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Original article by Joyce Moullakis
The Australian – Page: 16 : 21-Apr-20

National Australia Bank has advised that its cash profit for the six months to 31 March will be marred by writedowns totalling $1.14bn. This includes a $188m provision for customer remediation and an impairment charge of $742m associated with its software capitalisation policy. Westpac recently warned that its half-year results will include some $1.43bn worth of write-downs. Meanwhile, analysts expect the major banks’ loan losses and dividend payouts to be a key focus for investors when their interim results are released.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

No sign of breakout in inflation: King

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Original article by Adam Creighton
The Australian – Page: 13 & 16 : 20-Apr-20

The Reserve Bank of Australia has been actively buying state and federal government bonds in response to the coronavirus crisis. Former Bank of England governor Mervin King contends that the risk of a sharp rise in inflation will remain low if central banks rather than governments continue to have responsibility for deciding how much money to print. King has also described modern monetary theory as "nonsense", while he has praised regulators in Australia, the UK and New Zealand for advising banks to delay their dividend payments.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF ENGLAND

Record bond deal shows confidence in Australia: PM

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Original article by Sarah Turner, Vesna Poljak, Jonathan Shapiro
The Australian Financial Review – Page: 29 : 17-Apr-20

The Australian Office of Financial Management has revealed that domestic investors accounted for 68.1 per cent of the federal government’s $13bn bond deal. Banks in turn bought more than 50 per cent of the new bonds, while investment managers accounted for 25 per cent of the issuance. Prime Minister Scott Morrison says the strong support for the bond deal demonstrates that investors are confident that Australia will be able to repay its debt.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET