K: Financial and Insurance Services

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

AMP accused of leaving planners in limbo

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Original article by Joyce Moullakis
The Australian – Page: 12 : 20-Aug-19

The Finance Sector Union will ask the Fair Work Commission to intervene over AMP’s plans to revamp its financial planning operations. AMP has indicated that it intends to reduce the amount it pays when acquiring financial planning practices as a ‘buyer of last resort’, as well as cutting adviser numbers. The AMP Financial Planners Association will hold a meeting during August to allow members to vote on possible courses of legal action against AMP.

CORPORATES
AMP LIMITED – ASX AMP, FINANCE SECTOR UNION, AUSTRALIA. FAIR WORK COMMISSION, AMP FINANCIAL PLANNERS ASSOCIATION

Banks should explain credit card fine print

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Original article by Tom McIlroy
The Australian Financial Review – Page: 3 : 20-Aug-19

Research involving almost 400,000 Commonwealth Bank of Australia credit card users suggests that there are benefits to be had by being more transparent with customers. Harvard researchers found that CBA customers who were provided with more transparency about their credit cards spent 9.9 per cent more each month, and were much less likely to cancel their accounts. In announcing the results of their study, authors Ryan W. Buell and MoonSoo Choi called for more research into transparency and customer engagement.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, HARVARD UNIVERSITY

ASIC to sue big banks in weeks

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Original article by John Durie
The Australian – Page: 17 : 19-Aug-19

The Australian Securities & Investments Commission’s deputy chairman Daniel Crennan says it will shortly commence legal action against the four major banks, plus AMP and Macquarie Group. He adds that ASIC is still working on 13 matters that were referred to it by the Hayne royal commission, as well as a further 39 matters that were examined by the inquiry. Meanwhile, ASIC’s latest enforcement update shows that it accepted just one court-enforceable undertaking in the first half of 2019, compared with nine in the second half of 2018. ASIC’s reluctance to pursue litigation came under scrutiny by royal commissioner Kenneth Hayne.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AMP LIMITED – ASX AMP, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Exorbitant registry fees in ASIC’s sights

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Original article by Adam Creighton
The Australian – Page: 21 : 15-Aug-19

The Australian Competition & Consumer Commission is believed to be launching an investigation into the exit fees charged by share registry providers Computershare and Boardroom. This follows a complaint by fellow provider Automic, which stated to the ACCC in December that competition in the share registry sector was being stifled by the ‘exit fees’ that Computershare and Boardroom were charging clients who wanted to shift their business. A Computershare spokesperson has stated that it does not engage in anti-competitive practice.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, COMPUTERSHARE LIMITED – ASX CPU, BOARDROOM LIMITED, AUTOMIC

Banks rule OK on loan repayments as Westpac beats ASIC

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Original article by Andrew White
The Australian – Page: Online : 14-Aug-19

The Federal Court has dismissed claims by the Australian Securities & Investments Commission that Westpac had breached the responsible lending rules. ASIC’s case against Westpac had been closely observed by lenders, with the responsible lending rules being used by banks to determine a borrower’s ability to repay a loan. In rejecting ASIC’s case against Westpac, Justice Federal Court judge Nye Perram stated Westpac should not be automatically compelled to consider a borrower’s declared living expenses, and should be free to make use of spending benchmarks.

CORPORATES
FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC