K: Financial and Insurance Services

Savings rate hit as banks brace for interest pain

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Original article by Samantha Bailey
The Australian – Page: 17 & 27 : 26-Sep-19

Data from RateCity shows that ANZ, Westpac and ING are among the banks that have reduced their savings rates by up to 25 basis points in the last fortnight. RateCity also notes that the average savings rate is now 1.1 per cent; this compares with 1.57 per cent in May, prior to the Reserve Bank’s back-to-back official interest rate cuts. With the central bank widely tipped to ease monetary policy again in October, Credit Suisse estimates that banks’ at-call deposit rates would have to fall by about 51 basis points to offset the earnings impact of passing the full cash rate cut on to mortgage borrowers.

CORPORATES
RATECITY PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, ING BANK (AUSTRALIA) LIMITED, AMP BANK LIMITED, RESERVE BANK OF AUSTRALIA, CREDIT SUISSE (AUSTRALIA) LIMITED, MYSTATE LIMITED – ASX MYS, BANK OF QUEENSLAND LIMITED – ASX BOQ

Economists raise chances of QE

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Original article by David Rogers
The Australian – Page: 17 & 27 : 26-Sep-19

UBS’s chief economist George Tharenou says there is a growing possibility that the Reserve Bank of Australia will have to resort to unconventional monetary policy options. He says the US Federal Reserve is likely to reduce official interest rates by another one per cent over the next year, as US economic growth slows due to the latest round of tariff hikes. This in turn will put pressure on the RBA to further ease monetary policy, and potentially resort to measures such as quantitative easing. Tharenou expects the RBA to reduce the cash rate to just 0.25 per cent by May 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

CBA cut heats up home loan war

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Original article by Duncan Hughes
The Australian Financial Review – Page: 12 : 25-Sep-19

The Commonwealth Bank of Australia will reduce its interest rates on a range of mortgage loans for owner-occupiers and property investors. The rate cuts range from 10 basis points to 90 basis points, and apply to loan periods ranging from one to five years. Mortgage brokers say the move suggests that CBA expects the Reserve Bank to further ease monetary policy. Westpac recently announced a reduction in its mortgage loan serviceability floor.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF NEW SOUTH WALES

Director insider trading is rife

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Original article by Michael Roddan
The Australian – Page: 19 : 23-Sep-19

Australian National University academic Dr Dean Katselas has studied the trading of shares by directors following the release of listed companies’ earnings announcements. He says directors typically sell shares when positive information about their company is released and spark a jump in its share price, while they buy shares after the release of negative information that sees the share price depressed. Katselas says ‘contrary’ share trades are being made on the basis of non-public information about a company’s future performance, which he says essentially amounts to insider trading.

CORPORATES
AUSTRALIAN NATIONAL UNIVERSITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Westpac dividend under pressure

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 23-Sep-19

There is growing speculation that Westpac could reduce its dividend payout in response to the Reserve Bank of New Zealand’s new capital requirements. Westpac has yet to determine the size of its final dividend for 2018-19, but Credit Suisse has forecast both a lower payout and a capital raising of at least $1.5bn when Westpac releases its full-year results in early November. The prospect of further official interest rate cuts in Australia is also weighing on the earnings of the nation’s banks.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF NEW ZEALAND, CREDIT SUISSE (AUSTRALIA) LIMITED, CITIGROUP PTY LTD, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, EVANS AND PARTNERS ASIA FUND – ASX EAF, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, PM CAPITAL LIMITED

IOOF no closer to ANZ deal after court win

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Original article by Joanna Mather, Aleks Vickovich
The Australian Financial Review – Page: 13 & 17 : 23-Sep-19

The Australian Prudential Regulation Authority has failed in its court case against IOOF Holdings, in which it sought to argue that the financial services company breached its obligation to act in its members’ best interests. It had been the first time in more than 10 years that APRA had taken superannuation trustees to court, with Federal Court Justice Jayne Jagot finding that its legal arguments were "unpersuasive". Despite APRA’s lack of success in the case, industry observers say it does not mean that IOOF is guaranteed to complete its takeover of the ANZ Bank’s wealth unit.

CORPORATES
IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ALLENS, ADVISER RATINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, MORNINGSTAR PTY LTD

Westpac gives itself 12 months to replace CFO

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Original article by Tim Boyd
The Australian Financial Review – Page: 20 : 13-Sep-19

Westpac announced on 12 September that chief financial officer Peter King will retire in 2020, with King having joined Westpac from Deloitte in 1994. King became deputy CFO in 2011 and CFO in 2014, replacing Phil Coffey. King says that Westpac has transformed itself in the time that he has been there, while UBS banking analyst Jonathan Mott said that whomever Westpac chooses to replace King "will have some big boots to fill". Westpac CEO Brian Hartzer thanked King for his significant contribution to the company.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, DELOITTE TOUCHE TOHMATSU LIMITED

HK exchange in London bid

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Original article by Steven Russolillo
The Australian – Page: 17 & 27 : 12-Sep-19

Hong Kong Exchanges and Clearing (HKEX) has launched an unsolicited takeover bid for the London Stock Exchange (LSE). LSE has indicated it will consider the bid, which is valued at Stg29.6 billion ($53.27 billion), and which it described as "unsolicited, preliminary and highly conditional". The HKEX bid for the LSE is aimed at preventing the proposed merger between the LSE and financial-information provider Refinitiv Holding, which was announced in August. In commenting on the HKEX bid, the LSE stated it remained committed to its bid for Refinitiv.

CORPORATES
HONG KONG EXCHANGES AND CLEARING LIMITED LONDON STOCK EXCHANGE REFINITIV RIO TINTO LIMITED – ASX RIO BHP GROUP LIMITED – ASX BHP

Bank bosses need a reality check

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Original article by James Frost
The Australian Financial Review – Page: 1 & 6 : 12-Sep-19

Former regulator Graeme Samuel told a parliamentary hearing on 11 September that the ANZ needs a "reality check". Samuel was responding to questions about his review of the Australian Prudential Regulation Authority (APRA), with Samuel noting that the ANZ was one of 32 entities that have chosen not to make their prudential self-assessment public. He said that the National Australia Bank had set the benchmark by releasing its self-assessment in late 2018, and that the ANZ should be compelled to submit to a snap inquiry if it did not release its review.

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

Cbus’ climate change quotas queried

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Original article by Joanna Mather
The Australian Financial Review – Page: 8 : 6-Sep-19

Construction industry superannuation fund Cbus will allocate one per cent of its $52 billion worth of funds under management to climate change initiatives. Its decision has been queried by Senator James Paterson, who said that establishing quotas seems like a bad idea; Paterson is the chair of the Parliamentary Joint Committee on Corporations and Financial Services. Scott Donald, the director of the Centre for Law, Markets & Regulation at the University of New South Wales, says Cbus is not violating any laws by making such a decision.

CORPORATES
CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, AUSTRALIA. JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL SERVICES, UNIVERSITY OF NEW SOUTH WALES