K: Financial and Insurance Services

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

Businesses buffeted in sea of uncertainty

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Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 17-Mar-20

A growing number of Australian-listed companies are abandoning their recently-issued earnings guidance in response to the coronavirus. They include Cochlear, which has warned that hearing implants will be a low priority for the healthcare sector in terms of elective surgery when the virus is eventually contained. Challenger Limited, Auckland International Airport and oOh!Media are among the other companies that have withdrawn their earnings guidance. In contrast, The Reject Shop has advised that its sales have risen strongly year-on-year amid panic buying by consumers.

CORPORATES
COCHLEAR LIMITED – ASX COH, CHALLENGER LIMITED – ASX CGF, AUCKLAND INTERNATIONAL AIRPORT LIMITED – ASX AIA, OOH!MEDIA LIMITED – ASX OML, THE REJECT SHOP LIMITED – ASX TRS

Westpac CEO: banks strong, economy the risk

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 1 & 20 : 16-Mar-20

Westpac’s acting CEO Peter King says the coronavirus crisis represents a ‘real’ economy issue that needs to be dealt with accordingly. He says Westpac and the other big banks can cope with an increase in bad debts and a tightening of credit markets, but helping business customers that have no cash flow to remain operating will be their biggest challenge. King says Westpac is ready to play its part in slowing down the spread of the coronavirus within the community, with appropriate procedures in place if a staff member tests positive.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Bull to bear in three weeks with market down 20pc as Trump leaves the world waiting

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Original article by David Rogers
The Australian – Page: 17 & 27 : 12-Mar-20

The Australian sharemarket is now officially in bear market territory, having shed 20 per cent since reaching a record high of 7,162.5 points just three weeks ago. Some $13bn worth of shares changed hands on 11 March, which is the fifth-highest daily total on record. Richard Coppleson of Bell Potter expects market volatility to persist for at least another month or so. Meanwhile, Josh Williamson of Citigroup now expects Australia to record minus 0.25 per cent GDP growth in the March quarter and zero growth in the June quarter.

CORPORATES
BELL POTTER SECURITIES LIMITED, CITIGROUP PTY LTD

Banks, retailers in talks over card fees

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Original article by Eli Greenblat
The Australian – Page: 19 : 10-Mar-20

The Australian Retailers Association has estimated its members pay over $500 million a year in merchant fees on bank card transactions. ARA CEO Russell Zimmerman was invited to a meeting with Australian Banking Association CEO Anna Bligh and Commonwealth Bank CEO Matt Comyn on 9 March, at which the fees issue was discussed. An initiative known as ‘least-track routing’, which aims to boost competition within the debit card market and to help reduce card payment costs, was among the other topics discussed.

CORPORATES
AUSTRALIAN RETAILERS ASSOCIATION, AUSTRALIAN BANKING ASSOCIATION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

World hunkers down for fight against virus

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Original article by David Rogers
The Australian – Page: 29 : 6-Mar-20

Investors have responded positively to the announcement of economic stimulus measures in Australia and the US in response to the coronavirus. Wall Street and sharemarkets across the Asia-Pacific region rallied on 5 March, while the yield on 10-year Australian government bonds rose six basis points to 0.78 per cent. Meanwhile, financial markets expect further official interest rate cuts in both Australia and the US in coming months.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, SHANGHAI COMPOSITE INDEX, NIKKEI 225 INDEX, HANG SENG INDEX, KOSPI INDEX, TAIEX INDEX

More capital raisings on the cards: Goldman

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Original article by Melissa Yeo
The Australian – Page: 27 : 6-Mar-20

Matthew Ross of Goldman Sachs says the coronavirus outbreak is likely to prompt more listed companies to undertake capital raisings in coming months, particularly ones that are close to breaching their debt covenants. Ross notes that the supply chains of many companies will be impacted by the virus, given the high level of dependence on imports from China, especially in the consumer goods sector.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD

Analysts cut bank earnings forecasts

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Original article by Gerard Cockburn, Joyce Moullakis
The Australian – Page: 21 : 5-Mar-20

JP Morgan expects the net profits of Australia’s major banks to fall by 3-4 per cent over coming years after they moved to reduce their mortgage interest rates by 25 basis points, in line with the latest official interest rate cut. JP Morgan adds that the prospect of lower profit margins may prompt banks to reduce their dividend payouts. Macquarie has reiterated its ‘underweight’ recommendation on the banking sector, while UBS has downgraded its earnings-per-share forecast for bank stocks.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD