K: Financial and Insurance Services

Goode pushes for RBA rethink

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Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 28-Oct-19

Former ANZ Bank chairman Charles Goode has urged Treasurer Josh Frydenberg to work with the Reserve Bank of Australia to cut its inflation target to as low as one per cent. Goode also believes that the Australian Securities & Investment Commission’s responsible lending rules are restricting lending, and he doubts that people like Frank Lowy and Harry Triguboff would have been able to establish their property businesses if the current responsible lending rules had been around in the post-World War II years. Goode says having a lower inflation target would end the RBA’s obsession with reducing interest rates to meet what he argues are outdated inflation targets.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

RACT marginally ahead of RAA in general insurance customer satisfaction

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Oct-19

RACT is the winner of Roy Morgan’s General Insurer of the Month Award for September 2019, with a customer satisfaction rating of 93%. The insurance arm of the Tasmanian motoring organisation now has an unbeatable lead in the general insurer category for the annual customer satisfaction award. South Australia-based RAA (92%) was a close second in the category, followed by People’s Choice Credit Union (90%), Shannons (90%) and Western Australia’s RAC (88%). The four leading general insurers improved their satisfaction ratings when compared to a year ago, with Shannons showing the largest gain of 5%. RAC was the only top-five general insurer that slipped in ratings over the same period, although it only declined 1%. These latest customer satisfaction ratings have been drawn from the Roy Morgan Single Source survey, derived from in-depth face-to-face interviews with around 50,000 Australians each year in their homes.

CORPORATES
ROY MORGAN LIMITED, RACT INSURANCE PTY LTD, RAA INSURANCE LIMITED, PEOPLE’S CHOICE CREDIT UNION, SHANNONS, RAC INSURANCE PTY LTD

Multiple super accounts cost $2.6bn a year

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Original article by Michael Roddan
The Australian – Page: 7 : 25-Oct-19

Superannuation fund members pay a combined $32bn in fees each year, including some $2.6bn in fees on lost and forgotten super accounts. Data from the Australian Taxation Office highlights the issue of multiple super accounts; some 23 per cent of the nation’s 16 million workers have two super accounts, while eight per cent have three and one per cent have six or more super accounts. The ATO also notes that more Australians have opted to consolidate their super accounts over the last five years.

CORPORATES
AUSTRALIAN TAXATION OFFICE, AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIAN LABOR PARTY

Treasury $1bn debt sale comes up short

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Original article by David Rogers
The Australian – Page: 26 : 25-Oct-19

The Australian Office of Financial Management’s CEO Robert Nicholl has downplayed the fact that investors did not fully support a new issuance of Treasury notes. The AOFM attracted bids totalling $936m for a $1bn issuance of Treasury Notes that will mature on 24 January 2020. Nicholl notes that demand for short-term debt instruments such as Treasury Notes can vary significantly, adding that the shortfall will not be a concern for the federal government unless it becomes a regular occurrence.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Westpac refund costs approach $1 billion

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Original article by Lucas Baird, Aleks Vickovich
The Australian Financial Review – Page: 20 : 24-Oct-19

Westpac has advised that its financial accounts for the second half of 2018-19 will include an after-tax provision of $341m for its customer remediation program. This will lift the bank’s remediation costs for the full year to $958m, and $1.9bn on a pre-tax basis since 2017. Westpac has also flagged the potential for significant financial penalties as a result of Austrac’s investigation into its compliance with anti-money laundering laws. Westpac’s financial results for the year to 30 September will be released in early November.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, EVANS AND PARTNERS ASIA FUND – ASX EAF, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Big banks chop 200 branches in cost-cutting drive

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Original article by Cliona O’Dowd
The Australian – Page: 21 : 24-Oct-19

Data from the Australian Prudential Regulation Authority shows that the nation’s four major banks closed 207 branches during 2018-19, and 750 since 2014. Westpac has closed 333 branches in the last five years, including those of its subsidiaries, ahead of ANZ Bank with 190. A Westpac spokesman has defended the closures, noting that less than two per cent of banking transactions are now undertaken in its branches. More than 1,000 ATMs nationwide have also been scrapped in the last year.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, FINANCE SECTOR UNION

Global risks high, but Fed will avert recession

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Original article by David Rogers
The Australian – Page: 25 : 23-Oct-19

Northern Trust’s chief economist Carl Tannenbaum expects the US Federal Reserve to reduce official interest rates in late October. Financial markets anticipate more monetary policy easing, but Tannenbaum says the Federal Reserve will put further rate cuts on hold. He is also confident that interest rate cuts will enable the US economy from going into recession. Tannenbaum has also questioned whether the Australian government should still be focusing on returning the Budget to surplus in an environment of low interest rates and a slowing Chinese economy.

CORPORATES
NORTHERN TRUST CORPORATION, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Asset rule has banks with $13bn shortfall

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Original article by Richard Gluyas
The Australian – Page: 21 : 23-Oct-19

Macquarie’s Victor German expects the Reserve Bank of New Zealand to increase the tier-1 capital requirements for Australian banks’ NZ subsidiaries to 16 per cent, as it has previously flagged. German says Westpac, ANZ and National Australia Bank will be hardest hit by the move, estimating that their combined capital shortfall will be around $13bn. However, the Commonwealth Bank’s capital impost is likely to be smaller than Macquarie had previously expected, which could allow it to return up to $3.5bn to shareholders.

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

QE tipped as rate cuts lose impact

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Original article by David Rogers
The Australian – Page: 17 & 28 : 22-Oct-19

A number of economists now say the Reserve Bank of Australia could implement unconventional monetary policy measures in 2020. They include Westpac’s chief economist Bill Evans, who warns that quantitative easing may be necessary if the cash rate fall below 0.5 per cent. Michael Knox of Morgans Financial, Su-Lin Ong of RBC Capital Markets and Marcel Thieliant of Capital Economics have also flagged the prospect of quantitative easing. Financial markets have fully priced in a rate cut to 0.5 per cent by May.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, MORGANS FINANCIAL LIMITED, RBC CAPITAL MARKETS, CAPITAL ECONOMICS LIMITED, GOLDMAN SACHS AUSTRALIA PTY LTD

NAB, ANZ face new climate activist vote

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Original article by Richard Gluyas
The Australian – Page: 19 : 21-Oct-19

Activist group Market Forces recently put forward shareholder resolutions calling on Westpac, the ANZ Bank and National Australia Bank to amend their constitutions in regard to reducing their exposure to fossil-fuel assets. A second activist group, the Australasian Centre for Corporate Responsibility, will table resolutions at the upcoming AGMs of NAB and ANZ, calling on them to withdraw from industry groups whose advocacy stances are at odds with the Paris climate goals. The ACCR states that its resolutions are conditional on shareholders approving the Market Forces resolutions.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MARKET FORCES, AUSTRALASIAN CENTRE FOR CORPORATE RESPONSIBILITY, BHP GROUP LIMITED – ASX BHP