K: Financial and Insurance Services

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

More Westpac pain ahead as dividends cut

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 5-Nov-19

Westpac has posted cash earnings of $6.85bn for 2018-19, which is 15 per cent lower than previously. Its net interest margin fell 10 basis points to 2.12 per cent in the year to 30 September, while the final dividend has been reduced from $0.94 per share to $0.80. Westpac has also advised that its customer remediation costs have totalled $1.9bn pre-tax since 2017, and CEO Brian Hartzer has warned of the potential for further compensation and litigation. Meanwhile, a $2.5bn capital raising will lift Westpac’s common equity tier one capital ratio to around 11.25 per cent.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED, UBS HOLDINGS PTY LTD

ANZ warns of tough going as profit falls

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Original article by Richard Gluyas
The Australian – Page: 17 & 21 : 1-Nov-19

The ANZ Bank’s 2018-19 cash profit was steady at $6.47bn, although its net profit fell seven per cent to $5.95bn. ANZ has warned that trading conditions are likely to remain ‘challenging’ for some time, with CEO Shayne Elliott noting that consumers are opting to save rather than spend their money in the low interest rate environment. He has also rejected suggestions that banks are ‘profiteering’, arguing that ANZ’s return on equity of 10.9 per cent is not unreasonable. ANZ’s final dividend of $0.80 per share will be franked to 70 per cent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Recovery in doubt as Aussie dollar surges

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Original article by David Rogers
The Australian – Page: 17 & 27 : 1-Nov-19

The Australian dollar reached a three-month high of $US0.693 in local trading on 31 October, in the wake of the US Federal Reserve’s third interest rate cut in 2019. Financial markets have in turn downgraded the chances of the Reserve Bank of Australia reducing the cash rate again before the end of the year. The Australian dollar gained 3.3 per cent in October, including a gain of 1.6 per cent in the last five trading sessions. RBA board member Ian Harper argues that a strong currency is not desirable at present, given weak economic growth and less than full employment.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

Banks face a crisis: former Westpac chief Morgan

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Original article by David Rogers
The Australian – Page: 17 & 28 : 31-Oct-19

Former Westpac CEO David Morgan says the Australian banking sector is experiencing its fourth crisis, due to factors such as slowing economic growth, the misconduct exposed by the Hayne royal commission, and the Banking Executive Accountability Regime. The banking industry veteran, who is currently CEO of Chi-X Australia, cautions against over-regulating the sector, noting that the nation has a world-class banking system by global standards.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CHI-X AUSTRALIA PTY LTD, INTERNATIONAL MONETARY FUND, AUSTRALIA. DEPT OF THE TREASURY

Satisfaction with performance of Industry Super Funds remains ahead of Retail Funds for 17th year

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Original article by Roy Morgan
Market Research Update – Page: Online : 29-Oct-19

New research by Roy Morgan shows that satisfaction with the financial performance of Retail superannuation funds was only 58.7% in the six months to September 2019, compared to 64.1% for Industry Funds and 76.7% for Self-Managed Funds. Retail Fund satisfaction has lagged behind satisfaction with Industry Funds for the last 17 years. These are the latest findings from the September 2019 Roy Morgan Research ‘Superannuation Satisfaction’ report based on around 50,000 interviews with people per annum, including over 30,000 who have superannuation.

CORPORATES
ROY MORGAN LIMITED

No option for savers as deposits slashed

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Original article by Michael Roddan
The Australian – Page: 17 & 28 : 29-Oct-19

The Commonwealth Bank’s term deposit interest rates are now well below the official inflation rate. The banking major has cut its term deposit rates by a much higher margin than the 75-basis point reduction in the cash rate so far in 2019. InfoChoice CEO Vadim Taube says savers need to look beyond the four major banks for term deposits that offer above-inflation interest rates. Meanwhile, Liberal MP Tim Wilson says the Reserve Bank should be wary of further easing monetary policy until the impact of the recent series of official interest cuts can be determined.

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

Westpac lashed in advice ruling

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 29-Oct-19

The Federal Court has upheld the Australian Securities & Investments Commission’s appeal against a December 2018 judgment in favour of Westpac. The case had centred on Westpac’s use of cold-calling to urge its customers to switch their superannuation accounts from other providers to its BT subsidiary, and whether this constituted the provision of general or personal advice. Westpac could face a financial penalty of up to $15m if it decides not to appeal the ruling.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BT FINANCIAL GROUP PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA