K: Financial and Insurance Services

Fintechs slam CBA alerts as misleading

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Original article by James Eyers
The Australian Financial Review – Page: 15 & 20 : 18-Nov-19

Raiz Invest has criticised the Commonwealth Bank of Australia for warning customers about the security risks associated with the use of fintech apps. CBA customers who use the Raiz app recently received a warning that their NetBank account had been compromised, and cautioned against sharing account log-in details with third parties. Raiz CEO George Lucas says the CBA alert was misleading and may even constitute an abuse of market power. Fintech Australia’s Rebecca Schot-Guppy says CBA’s actions are concerning given that the open banking regime is slated to begin in early 2020.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RAIZ INVEST LIMITED – ASX RZI, FINTECH AUSTRALIA PTY LTD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, ZIP CO LIMITED – ASX Z1P, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

NAB, ANZ to be grilled over wealth exits

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 20 : 15-Nov-19

A federal parliamentary committee is examining the financial services sector’s response to the Hayne royal commission. ANZ Bank CEO Shayne Elliott and National Australia Bank chairman and acting CEO Philip Chronican will appear before the committee on 15 November. Shadow assistant treasurer Andrew Leigh, who is the committee’s deputy chairman, says he is concerned about the amount of time the two banks are taking to divest their wealth management units; he says the general public expects the divestments to proceed.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Reserve finds silver lining in household debt cloud

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Original article by Cliona O’Dowd
The Australian – Page: 27 : 15-Nov-19

Australia’s household debt-to-income ratio is now about 190 per cent, compared with around 70 per cent in the early 1990s. However, the Reserve Bank’s assistant governor Michele Bullock notes that households that are in the top 40 per cent of income distribution account for three quarters of household debt. Bullock adds that while there has also been an increase in mortgage loan arrears, it is largely confined to several states. She also says negative housing equity is generally not a major concern unless somebody becomes unemployed and must sell their home.

CORPORATES
RESERVE BANK OF AUSTRALIA

Sweden dumps Oz bonds over climate inertia

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Original article by Paul Garvey
The Australian – Page: 4 : 15-Nov-19

Shane Oliver of AMP Capital says the Swedish central bank’s decision to divest bonds issued by the Western Australian and Queensland government is unlikely to have much impact on Australian bond prices. Sveriges Riksbank deputy governor­ Martin Floden has cited Australia’s lack of sufficient action on climate change for the move. The central bank has sold its holdings of bonds issued by the Canadian province of Alberta for the same reason.

CORPORATES
SVERIGES RIKSBANK, AMP CAPITAL INVESTORS LIMITED, INVESTOR GROUP ON CLIMATE CHANGE, S&P GLOBAL RATINGS, WESTERN AUSTRALIA. DEPT OF TREASURY AND FINANCE

QE coming next year: JPMorgan

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Original article by David Rogers
The Australian – Page: 17 & 28 : 12-Nov-19

JPMorgan Australia’s chief economist Sally Auld expects the Reserve Bank to implement unconventional monetary policy measures in the December 2020 quarter. Auld still anticipates another official interest rate cut in February, but warns that this will be insufficient to stimulate the economy, prompting the central bank to reduce the cash rate to 0.25 per cent and commence a quantitative easing program in late 2020. However, Auld says quantitative easing is unlikely to be necessary if the federal government’s May 2020 Budget includes ‘meaningful’ fiscal stimulus.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, MORGAN STANLEY AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

Loans double at non-banks as majors slide

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 18 : 12-Nov-19

Australia’s four major banks and their subsidiaries experienced a 10 per cent fall in market share in business lending and equipment finance in 2018-19, according to the inaugural business lending index report, put together by mortgage aggregator FAST. FAST Group CEO Brendan Wright says the ability of the major banks to service the demands of business customers is being hampered by distractions and regulatory hurdles, and that non-bank players are taking advantage of this situation.

CORPORATES
FAST GROUP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

First home buyer risk riles banks

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 8 : 11-Nov-19

Major banks are doubtful that the federal government’s scheme to assist first-home buyers will start on its proposed date of 1 January. The scheme, announced during the final days of the May election campaign, will see the government provide up to 10,000 first-home buyers each year with free lenders’ mortgage insurance for people with deposits of as little as five per cent and less than 20 per cent. The big banks want the ability to charge higher interest rates for participants in the scheme, claiming that they will be a greater risk because of the low deposits involved.

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

Banks, super face new round of compo costs

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Original article by Joyce Moullakis
The Australian – Page: 21 : 7-Nov-19

Law firm Minter Ellison has warned that banks and wealth managers could face additional customer remediation costs if Westpac does not appeal against a recent judgment regarding the provision of financial advice. Minter Ellison partner Andrew Bradley says the Federal Court’s decision to overturn a judgment in favour of Westpac could also prompt more class actions in the financial services sector. The case centred on the distinction between general and personal advice.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, MINTER ELLISON, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, HERBERT SMITH FREEHILLS PTY LTD

Facebook faces probe on currency

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Original article by Michael Roddan
The Australian – Page: 1 & 8 : 6-Nov-19

Austrac is among eight Australian financial regulators that will undertake an investigation into plans by social media giant Facebook to launch a cryptocurrency. The regulators are expected to use their formal powers to compel Facebook to disclose details of its proposal for the Libra digital currency. The concerns about Libra are believed to include its potential impact on national security, privacy and financial markets.

CORPORATES
FACEBOOK INCORPORATED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. OFFICE OF THE AUSTRALIAN INFORMATION COMMISSIONER

Optimistic Reserve Bank holds rates steady for now

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Original article by David Rogers, Patrick Commins
The Australian – Page: 19 & 27 : 6-Nov-19

Reserve Bank of Australia governor Philip Lowe has reiterated that the cash rate is likely to remain low for some time, after it was left unchanged at 0.75 per cent on 5 November. However, he also stressed that the central bank is open to further rate cuts if necessary to achieve its inflation and full employment targets. Su-Lin Ong of RBC Capital Markets now expects another rate cut in February, rather than December. Bill Evans of Westpac also expects a rate cut in February, which he says will be the last one in the current easing cycle.

CORPORATES
RESERVE BANK OF AUSTRALIA, RBC CAPITAL MARKETS, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY