K: Financial and Insurance Services

NPS of banks (and big four banks) continues to improve after Finance Royal Commission

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

New results from Roy Morgan show that the Net Promoter Score levels of Australia’s banks, including the big four banks, have increased significantly since the final report of the Finance Royal Commission was handed down in February 2019. The NPS of the big four banks was 2.1 in July, up 3.7pts since February, and the NPS of banks as a whole was 8.5, up 3.2pts over the last five months. The improvement in NPS scores has returned the measure to a level comparable to that at the time the Finance Royal Commission was established in late 2017. All of the big four banks have improved their NPS since February. The leading big four bank by NPS is the CBA (now on 7.2, up 3.3pts since February). The other three, although improved, were still in negative territory. Teachers Mutual Bank now has the highest NPS of 52.6, up 13.5pts since February. Meanwhile, satisfaction with the big four banks reached 76.1% in July, up by 0.8% points since February, led by increases for the CBA (+1% point), ANZ (+0.9% points) and Westpac (+2.3% points). These are some of the latest findings from Roy Morgan’s ‘Customer Satisfaction report on Consumer Banking in Australia’ and the ‘Financial Institutions Advocacy Report’. These reports are based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes.

CORPORATES
ROY MORGAN LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, BENDIGO BANK, ING BANK (AUSTRALIA) LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Reserve Bank flags QE to lift stagnant economy

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Original article by David Rogers
The Australian – Page: 24 : 28-Aug-19

The Reserve Bank of Australia’s deputy governor Guy Debelle says the nation has been a major beneficiary of the rules-based global trading system, and he has warned that the current threats to this system present a major risk to both the Australian and global economies. Debelle has also used an Economic Society speech to indicate that the RBA could be open to quantitative easing if the cash rate falls to 0.5 per cent. However, David Plank of the ANZ Bank says the RBA is unlikely to pursue such a course of action unless the cash rate falls to 0.25 per cent or lower.

CORPORATES
RESERVE BANK OF AUSTRALIA, ECONOMICS SOCIETY OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Funds brace for more volatility

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Original article by William McInnes
The Australian Financial Review – Page: 13 & 27 : 27-Aug-19

Federation Asset Management chairman Greg Bundy says financial markets will keep falling, as he does not expect the US-China trade war to be resolved for some time. Matt Sherwood of Perpetual agrees that there is unlikely to be a quick resolution to the trade dispute. Bearish sentiment slashed the value of Australian stocks by around $26bn on 26 August, while the yield on 10-year Australian government bonds fell to 0.88 per cent. Shares in gold producers also rallied as investors sought out ‘safe-haven’ assets.

CORPORATES
FEDERATION ASSET MANAGEMENT, PERPETUAL LIMITED – ASX PPT, STANDARD AND POOR’S ASX 200 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Financial advisers too expensive and can’t be trusted: report

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Original article by Duncan Hughes
The Australian Financial Review – Page: 2 : 27-Aug-19

The Australian Securities & Investments Commission has released the findings of a survey on consumers’ attitudes toward the financial advice sector. It shows that there is a high level of distrust regarding the sector; amongst other things, about 50 per cent of respondents believe that financial advisers are more concerned about making themselves rich than helping clients, while almost 30 per cent prefer to obtain financial advice from family members, friends or colleagues. The ASIC report is based on interviews with almost 2,500 investors.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AMP LIMITED – ASX AMP

Savers at risk in bank, credit union data hack

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Original article by Joyce Moullakis
The Australian – Page: 19 : 26-Aug-19

The security of the New Payments Platform is under scrutiny in the wake of revelations that the system has been subject to a second data breach. Cuscal has indicated that only about three per cent of bank and credit union customers who have registered for a PayID have been affected by the breach, which equates to less than 92,000 customers. Westpac customers who use the real-time NPP system were affected by a data breach in June.

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

Report finds ANZ tribal, slow and lazy

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Original article by James Frost
The Australian Financial Review – Page: 12 : 23-Aug-19

ANZ chairman David Gonski has commented on a governance, culture and accountability self-assessment that the bank prepared for the Australian Prudential Regulation Authority. Shortcomings revealed in the document, which Gonski notes was prepared on a confidential basis, prompted APRA to impose a $500 million capital charge on the bank. Gonski says some of these shortcomings include a penchant for seeking short-term fixes and a lack of accountability.

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

Bank charges on deposits a possibility

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Original article by Matthew Cranston
The Australian Financial Review – Page: 10 : 23-Aug-19

Data from the Reserve Bank shows that nearly 10 per cent of the deposits held by Australia’s major banks received no interest prior to the official interest rate cut in July, while a similar proportion of deposits earned interest of less than 50 basis points. Swiss Re’s chief economist Jerome Haegeli says Australian banks could potentially begin charging customers to hold their deposits. Several banks in Europe have already announced such a move, while the Bank of New York Mellon did so in 2011.

CORPORATES
RESERVE BANK OF AUSTRALIA, SWISS REINSURANCE COMPANY, THE BANK OF NEW YORK MELLON CORPORATION, UBS AG, JYSKE BANK, 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

Fixed rate falling to new lows under 3pc

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Original article by Cliona O’Dowd
The Australian – Page: 21 : 22-Aug-19

Australia’s residential property market has received a boost in the lead-up to the key selling season, with a number of banks reducing their fixed mortgage interest rates to new lows. Greater Bank has slashed its one-year fixed rate to just 2.79 per cent, while some owner-occupier loans offered by St George and the Bank of Melbourne have been reduced to 2.94 per cent. Sally Tindall of RateCity cautions that fixed home loan interest rates may fall even lower, given that the Reserve Bank may further reduce the cash rate.

CORPORATES
GREATER BANK LIMITED, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, RATECITY PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, CANSTAR PTY LTD

Where’s the crisis? Westpac skewers talk of quantitative easing

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Original article by Patrick Commins
The Australian Financial Review – Page: 29 : 22-Aug-19

Lyn Cobley, the head of institutional banking at Westpac, says unconventional monetary policy was necessary in response to the global financial crisis. However, she says there is no need for the Reserve Bank to pursue quantitative easing at present, as the Australian economy and the nation’s banking system are "far from crisis". She adds that Westpac’s senior institutional bankers generally agree that further reducing interest rates would have little impact on the borrowing and investment intentions of their clients.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, EUROPEAN CENTRAL BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

More rate cuts in RBA mix to guard economy

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Original article by David Rogers
The Australian – Page: 19 : 21-Aug-19

The minutes of the Reserve Bank of Australia’s latest monthly board meeting show that the central bank will be open to further easing of monetary policy if the economic outlook worsens. The minutes also indicate that RBA board members expect that official interest rates may need to remain at a record low for some time in order to achieve the central bank’s inflation target. However, the RBA also indicated that it will assess developments in the global and domestic economies before taking any further monetary policy action. Sally Auld of JP Morgan does not expect a rate cut until February.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC