K: Financial and Insurance Services

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

ANZ tips 0.25pc cash rate by May

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Original article by Melissa Yeo, David Rogers
The Australian – Page: 21 : 6-Sep-19

The ANZ Bank’s head of Australian economics David Plank expects the Reserve Bank to reduce the cash rate by 0.25 per cent in October, and he says it is likely to ease monetary policy again in February and May 2020. Plank says factors such as the outlook for unemployment and global uncertainty will see official interest rates fall to a record low of 0.25 per cent. UBS economist George Tharenou also anticipates rate cuts in October and February, and he has flagged the potential for a third rate cut in March.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

Hopes for tariff truce as US, China resume talks

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Original article by David Rogers
The Australian – Page: 28 : 6-Sep-19

Sharemarkets across the Asia-Pacific region rallied on 5 September as investors welcomed news that the US and China will hold trade discussions in early October. Both nations imposed new tariffs at the start of September, while the US is scheduled to increase tariffs on a range of Chinese goods on 1 October. Meanwhile, financial markets have priced in an 88 per cent chance that the Reserve Bank of Australia will reduce official interest rates in October, followed by another rate cut by May.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX, SHANGHAI COMPOSITE INDEX, NIKKEI 225 INDEX, KOSPI INDEX, HANG SENG INDEX

Watchdog takes aim at Medibank as patients denied payments

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Original article by Sarah-Jane Tasker
The Australian – Page: 17 & 21 : 4-Sep-19

The Australian Competition & Consumer Commission has launched legal action against Medibank Private, accusing the health insurer of making false representations about the benefits covered by its policies. It will be alleged that Medibank had wrongly advised customers that its AHM Lite and Boost policies did not cover medical procedures such as knee reconstructions and spinal surgery. ACCC chairman Rod Sim says this forced many policyholders to delay necessary surgery.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, AHM HEALTH INSURANCE, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, FEDERAL COURT OF AUSTRALIA

Brokers lift share of housing pie as bank branches lose business

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Original article by Richard Gluyas
The Australian – Page: 21 : 4-Sep-19

Data from UBS shows that Australia’s major banks account for 79 per cent of existing mortgage loans. However, Jon Mott of UBS says their share of new home loans is likely to keep falling as the trend toward alternatives such as mortgage brokers gathers pace. UBS also notes that the proportion of home loans that are sold via bank branches has fallen from 48 per cent in fiscal 2013 to just 37 per cent. Mott notes that the major banks’ aggressive push to close bank branches in recent years has contributed to the growing use of mortgage brokers.

CORPORATES
UBS HOLDINGS PTY LTD

ANZ boss braces for slowdown

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Original article by Richard Gluyas, Glenda Korporaal, David Rogers, Andrew White
The Australian – Page: 17 & 25 : 4-Sep-19

Harvey Norman chairman Gerry Harvey expects the Reserve Bank of Australia to reduce the cash rate to at least 0.5 per cent, but he says this will do little to stimulate the economy. The RBA signalled on 3 September that official interest rates are likely to remain low for an extended period; ANZ Bank CEO Shayne Elliott says record low interest rates demonstrate that central banks are concerned about the global economic outlook. The RBA’s monthly board meeting coincided with the release of data showing that retail spending fell by 0.1 per cent in July, compared with economists’ expectations of an 0.2 per cent increase.

CORPORATES
RESERVE BANK OF AUSTRALIA, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIAN TAXATION OFFICE, LATITUDE FINANCIAL SERVICES AUSTRALIA HOLDINGS PTY LTD

Aviva tips weaker dollar, eyes global recession

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Original article by Adam Creighton
The Australian – Page: 17 & 18 : 2-Sep-19

Aviva Investors’ chief economist Michael Grady is bearish about the Australian dollar, saying that it could fall to the low $US0.60s level by the end of 2019. He stresses that the potential slump in the currency’s value is not solely due to the outlook for the Chinese economy, noting amongst other things that the link between the dollar and the terms of trade has broken down. Grady adds that the trade war with the US could reduce China’s economic growth by a further 1-1.25 per cent, while he says there is an even chance of a global recession before the end of 2019.

CORPORATES
AVIVA INVESTORS

Self-managed funds defy the big industry players

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Original article by Robert Gottliebsen
The Australian – Page: 26 : 30-Aug-19

Australia has around 590,000 self-managed superannuation funds, with assets under management totalling $747 billion. This puts the SMSF sector ahead of both industry super funds ($718 billion) and retail super funds ($625 billion) in terms of size. Despite both industry and retail funds having forecast the demise of the SMSF sector for some time, figures released by the SMSF Association show that almost 30 per cent of new SMSFs have trustees (members) between the ages of 35 and 44. Given the revelations of the Hayne royal commission, it is not surprising that many SMSF members do not trust the big super funds.

CORPORATES
SMSF ASSOCIATION, AMP LIMITED – ASX AMP

Wary APRA orders more stress-tests for banks

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Original article by Richard Gluyas
The Australian – Page: 17 & 21 : 30-Aug-19

The Australian Prudential Regulation Authority currently undertakes "stress-testing" of the nation’s banks every three years. However, growing concern about the outlook for the domestic and global economies is believed to have prompted APRA to conduct annual stress tests. APRA’s latest corporate also shows that the performance of superannuation funds will also be a focus for the prudential regulator over the next few years; this will include ranking super funds based on a range of metrics.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY