K: Financial and Insurance Services

IOOF to push ahead with buyout of ANZ’s wealth arm

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Original article by Andrew White
The Australian – Page: 21 : 18-Oct-19

Shares in wealth manager IOOF Holdings rallied on 17 October after it moved a step closer to completing a deal to acquire the ANZ Bank’s OnePath pensions and investments division. IOOF has advised that it will pay just $850m for the business if it gains regulatory approval by 30 June. This represents a 13 per cent discount to the previously agreed purchase price. Meanwhile, the Australian Prudential Regulation Authority has indicated that it will not appeal a recent Federal Court decision that cleared five IOOF executives and directors of misconduct.

CORPORATES
IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ONEPATH AUSTRALIA LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, FEDERAL COURT OF AUSTRALIA

Strong gains raise question of fair stock value

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Original article by David Rogers
The Australian – Page: 27 : 18-Oct-19

The Australian sharemarket’s pullback on 17 October was to be expected, after the S&P/ASX 200 had gained 3.8 per cent in two weeks. The market may be vulnerable to a further pullback, given that it now looks to be the most expensive since October 2007 on a price-earnings basis. Meanwhile, financial markets have downgraded the chances of an official interest rate cut in both November and December following the release of the latest unemployment data.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, MACQUARIE GROUP LIMITED – ASX MQG

Comyn claims ACCC exaggeration but welcomes probe

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Original article by Bo Seo
The Australian Financial Review – Page: 12 & 17 : 17-Oct-19

Commonwealth Bank of Australia CEO Matt Comyn and chair Catherine Livingstone are supportive of a new inquiry into mortgage pricing. However, Comyn has questioned the Australian Competition & Consumer Commission’s claim that the pricing gap for new and existing customers of the nation’s major banks is 32 basis points. He says this gap is significantly lower than 30 basis points at CBA. Livingstone notes that the bank takes into account the interests of borrowers, deposit-holders and shareholders when deciding upon its mortgage pricing.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE TREASURY

Bank trusted more than tech: ANZ

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Original article by Supratim Adhikari
The Australian – Page: 21 : 17-Oct-19

ANZ Bank’s CEO Shayne Elliott says consumers still generally trust banks more than technology companies such as Google and Facebook. He adds that consumers trust banks to manage their personal data as well as their money, which gives banks an advantage over tech companies. He has also defended the banking sector’s traditional one-size-fits-all model for product pricing, arguing that the targeted pricing strategy of fintechs has its risks.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, GOOGLE INCORPORATED, FACEBOOK INCORPORATED

Regionals undercut bigger bank rivals

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Original article by Joyce Moullakis, Andrew White
The Australian – Page: 17 & 21 : 16-Oct-19

Analysis by RateCity shows that some of Australia’s regional banks are currently offering much lower variable home loan interest rates than the ‘big four’ bank. However, Victor German of Macquarie Group notes that existing customers at some of the smaller banks are also paying much higher mortgage interest rates than new customers. The mortgage pricing of smaller banks is among the issues that will be examined by the Australian Competition & Consumer Commission’s new inquiry into the sector.

CORPORATES
RATECITY PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, SUNCORP BALANCED PROPERTY FUND, SUNCORP GROUP LIMITED – ASX SUN, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, MACQUARIE BANK LIMITED – ASX MBL, BANK OF QUEENSLAND LIMITED – ASX BOQ, AMP BANK LIMITED, ING BANK (AUSTRALIA) LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, JP MORGAN AUSTRALIA LIMITED

APRA urges more capital be held against NZ banks

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Original article by James Eyers
The Australian Financial Review – Page: 11 & 17 : 16-Oct-19

The Australian Prudential Regulation Authority has warned that the nation’s major banks may need to increase the amount of capital they hold domestically in response to proposed changes to capital requirements in New Zealand. APRA is concerned that the Reserve Bank of NZ’s reforms may prompt banks to shift capital to NZ, where they are the dominant players in the banking sector. The ANZ Bank estimates that APRA’s proposal would reduce its common equity tier 1 capital by about 75 basis points; Westpac in turn says its tier 1 capital would be reduced by about 40 basis points.

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

Cup day rate cut less likely on minutes

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 16-Oct-19

Financial markets have priced in a 36 per cent chance that the Reserve Bank will reduce the cash rate in November, following the release of the minutes from the central bank’s October board meeting. Amongst other things, board members expressed concern about the impact of historically low interest rates on savers and the housing market. The general consensus of economists is that the cash rate will remain on hold until February.

CORPORATES
RESERVE BANK OF AUSTRALIA

AMP to hit costs in bank merger

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Original article by Cliona O’Dowd
The Australian – Page: 17 & 23 : 11-Oct-19

Bell Potter analyst Lafitani Sotiriou has questioned AMP’s decision to merge its bank and Australian wealth divisions, suggesting that it is "strategy on the run". Allan Gray Australia CEO Simon Mawhinney in turn says the move raises conflicts of interest concerns. An AMP spokeswoman says the two businesses will have separate financial services licences and will remain separate legal entities after being folded into the new AMP Australia. Alex Wade will be CEO of the combined business.

CORPORATES
AMP LIMITED – ASX AMP, AMP BANK LIMITED

Savers come out second best as banks quietly slash interest rates on deposits

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Original article by Michael Roddan
The Australian – Page: 17 & 27 : 11-Oct-19

Lenders have cut interest rates on term deposits by between one and and 35 basis points since the Reserve Bank cut the official cash rate by 25 basis points on 1 October, according to data from ­RateCity. National Seniors Australia’s chief advocate Ian Henschke notes that a third of its members have their money in term deposits, with interest rates on term deposits now at their lowest since the 1950s. He claims that the federal government is "profiteering off the backs of pensioners", by not reducing the deeming rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, RATECITY PTY LTD, NATIONAL SENIORS AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN

Super fees twice as high for under 35s

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Original article by Michael Roddan
The Australian – Page: 6 : 10-Oct-19

Rainmaker Information Services has released a report which shows that workers who are under the age of 35 pay an average fee of 2.3 per cent, compared with just 1.2 per cent for those aged 35+. The report also contends that male workers pay an average of 1.1 per cent in super fees, compared with 1.3 per cent for female workers. Alex Dunnin of Rainmaker stresses that super funds are not overcharging or ripping members off; rather, the super industry has not been designed with young workers and those with low balances in mind.

CORPORATES
RAINMAKER INFORMATION SERVICES PTY LTD, AUSTRALIA. DEPT OF FINANCE