K: Financial and Insurance Services

Banks face heat over loyalty tax

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Original article by Patrick Durkin, James Frost, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 2 : 7-Oct-19

Australian Competition & Consumer Commission chairman Rod Sims has suggested that the nation’s banks are trying to "dud" their loyal customers. Sims, who is hoping Treasurer Josh Frydenberg will grant the ACCC’s request to conduct an inquiry into the competitive strength of the big banks, was commenting on the gap between mortgage interest rates offered to new borrowers and those offered to existing customers; the gap is generally half a percentage point. The banks have argued in private that it is not possible to offer the same competitive rates to all borrowers.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, EVANS AND PARTNERS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, DELOITTE TOUCHE TOHMATSU LIMITED

Savers do it tough as banks hold off cuts

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Original article by Jonathan Shapiro, Aleks Vickovich, Jemima Whyte
The Australian Financial Review – Page: 4 : 4-Oct-19

People who rely on interest income from their savings have been hard hit by the Reserve Bank of Australia’s aggressive monetary policy easing. Canstar notes that banks’ 12-month deposit rates have traditionally been about one per cent higher than the cash rate, but this has narrowed to 0.64 per cent. Term deposit rates and online savings account rates have both fallen sharply since the first of three official interest rate cuts in June, and Canstar’s Steve Mickenbecker says there is little scope for further reductions.

CORPORATES
RESERVE BANK OF AUSTRALIA, CANSTAR PTY LTD, UNIVERSITY OF TECHNOLOGY, SYDNEY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP BANK, MACQUARIE GROUP LIMITED – ASX MQG

Stocks lashed by recession fears

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Original article by David Rogers
The Australian – Page: 17 & 27 : 4-Oct-19

Factors such as growing uncertainty about the outlook for the global economy and a ruling from the WTO that has cleared the US to impose tariffs on European Union imports have weighed on investors worldwide. Australia’s benchmark S&P/ASX 200 has shed 2.9 per cent so far in October, while the S&P 500 in the US has fallen by three per cent. Aaryn Nania of Lucerne Investment Partners warns that investors should expect further market volatility, although Robert Buckland of Citigroup says it is too soon to predict a recession in the US and the end of the bull market.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, WORLD TRADE ORGANIZATION, LUCERNE INVESTMENT PARTNERS, CITIGROUP INCORPORATED, NIKKEI 225 INDEX, HANG SENG INDEX, SHANGHAI COMPOSITE INDEX, KOSPI INDEX, EURO STOXX 50 INDEX

ING achieves satisfaction ratings above ninety percent despite turbulent year for banking

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Original article by Roy Morgan
Market Research Update – Page: Online : 4-Oct-19

New Roy Morgan data shows that ING’s customer satisfaction rating among Australian home loan customers is 90%, followed by Bendigo Bank (86.9%) and Bankwest (81.6%). ING also has the highest level of customer satisfaction among non-home loan customers, at 92%, followed by Bendigo Bank (88.3%) and Suncorp (85.8%). The Big 4 banks were significantly behind the leaders; taking the Big 4 together, total non-home loan satisfaction is at its highest for over a year (77.8%), while home loan satisfaction is at a six-month high (71.1%). The findings come from the Roy Morgan Single Source survey, the world’s largest continuous source of consumer insights, derived from in-depth face-to-face interviews with over 50,000 Australians each year in their homes.

CORPORATES
ROY MORGAN LIMITED, ING BANK (AUSTRALIA) LIMITED, BENDIGO BANK, SUNCORP BANK

Squeeze on banks a risk to economy

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Original article by Jemima Whyte, Jonathan Shapiro, Aleks Vickovich, Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 4-Oct-19

The ANZ Bank’s chief economist Warren Hogan has rejected claims by Prime Minister Scott Morrison that the nation’s major banks are ‘profiteering’ by failing to pass on the latest official interest rate cut in full to their home loan customers. He says the banks are merely seeking to protect their margins. Meanwhile, the Australian Banking Association has stressed the importance of ‘strong, stable and profitable banks’ to economic growth and the free flow of credit.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF TECHNOLOGY, SYDNEY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, HYPERION ASSET MANAGEMENT LIMITED, UNISUPER LIMITED, IFM INVESTORS PTY LTD, EVANS AND PARTNERS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

RBA inflation goal requires negative rates

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Original article by David Rogers
The Australian – Page: 27 : 3-Oct-19

Andrew Boak, the chief economist at Goldman Sachs, says there is a material risk that the Reserve Bank of Australia will reduce the cash rate to less than 0.5 per cent and implement a quantitative easing program. Boak adds that the central bank’s own macroeconomic model suggests that a negative cash rate would be needed to deliver on its inflation and employment targets over the next 2-3 years. Boak expects the cash rate to be cut by another 25 basis points in November, while financial markets have fully priced in a rate cut by February.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY

Banks blasted for holding back on cuts

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Original article by Joyce Moullakis
The Australian – Page: 17 & 20 : 3-Oct-19

Westpac has reduced its mortgage interest rates by 15 basis points in response to the latest official interest rate cut, while the ANZ Bank has cut its rates by 14 basis points. Prime Minister Scott Morrison and Treasurer Josh Frydenberg have criticised the four major banks for failing to reduce their mortgage rates in line with the 25 basis point reduction in the cash rate. Meanwhile, analysts warn that the banks’ margins will come under pressure due to official interest rate cuts.

CORPORATES
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, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, REGAL FUNDS MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, SUNCORP BANK, MACQUARIE BANK LIMITED – ASX MBL, ATHENA HOME LOANS PTY LTD, RATECITY PTY LTD

Billion dollar hit for NAB after ASIC action

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Original article by James Fernyhough
The Australian Financial Review – Page: 15 & 18 : 3-Oct-19

National Australia Bank has advised that its cash earnings for the second half of 2018-19 will fall by about $1.23bn, while its full-year net profit will fall by $1.18bn. This has been attributed to an additional after-tax charge of $832m for its customer remediation program, as well as a change to its software capitalisation policy. NAB’s total provisions for customer remediation in the wake of the fees-for-no-service scandal has now topped $2bn. NAB will release its full-year results on 7 November.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MOODY’S INVESTORS SERVICE INCORPORATED, S&P GLOBAL RATINGS

Building Society and Credit Union customer satisfaction? You can bank on it

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Original article by Roy Morgan
Market Research Update – Page: Online : 2-Oct-19

New research by Roy Morgan shows that customer satisfaction with building societies and credit unions was 89.8% in the six months to August 2019, compared with a 76.7% customer satisfaction rating for Australia’s four major banks. In stark contrast to the banks, the financial services royal commission resulted in only a minor dent in the satisfaction ratings of building societies and credit unions. Meanwhile, Newcastle Permanent Building Society has won the monthly customer satisfaction award for August, with a rating of 92%, ahead of Credit Union Australia (91%) and People’s Choice Credit Union (88%). These findings come from the Roy Morgan Single Source survey, which is based on in-depth face-to-face interviews with over 50,000 Australians each year in their homes.

CORPORATES
ROY MORGAN LIMITED, NEWCASTLE PERMANENT BUILDING SOCIETY LIMITED, CREDIT UNION AUSTRALIA LIMITED, PEOPLE’S CHOICE CREDIT UNION

Major banks hit as credit growth stalls

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Original article by Joyce Moullakis
The Australian – Page: 17 & 28 : 1-Oct-19

Official data shows that annual growth in credit fell to an eight-year low of 2.9 per cent in the year to August, after rising by just 0.2 per for the month. Housing credit and business credit also increased by 0.2 per cent in August, with growth of 3.1 per cent and 3.4 per cent respectively for the year to August. Ed Henning of CLSA anticipates a slight improvement in credit growth in coming months, although Chris Read of Morgan Stanley says credit growth is unlikely to rebound in the near-term unless there is an upturn in housing turnover as well as prices.

CORPORATES
CLSA AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, SWITZER ASSET MANAGEMENT LIMITED, MST MARQUEE, UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE GROUP LIMITED – ASX MQG