K: Financial and Insurance Services

Risk of mortgage stress dropped in February, after the Reserve Bank cut interest rates for the first time since 2020

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Mar-25

New research from Roy Morgan shows that 1,549,000 mortgage holders (27.7%) were ‘At Risk’ of ‘mortgage stress’ in February 2025. The share of mortgage holders ‘At Risk’ of ‘mortgage stress’ is the lowest since November 2024. After the introduction of the Stage 3 tax cuts in July 2024 the share of mortgage holders ‘At Risk’ fell for four straight months until October, but it then began to increase for the next three months until the Reserve Bank’s interest rate cut in mid-February. The number of Australians ‘At Risk’ of mortgage stress has increased by 742,000 since May 2022 when the RBA began the cycle of interest rate increases. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 1,066,000 (19.6% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.7%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Overeach for ASIC to fine us, says big super

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Original article by Lucas Baird
The Australian Financial Review – Page: 10 : 14-Mar-25

Australian Securities and Investments Commission chairman Joe Longo has labelled the superananuation sector the "poster child" for governance failures, with Mary Delahunty saying Longo’s comments are an "overeach". Delahunty is from the Association of Superannuation Funds of Australia, which is the lobby group for the superannuation industry, with ASIC seeking to impose fines on AustralianSuper over its alleged failure to deal with thousands of death benefit claims in a prompt manner. However, Delahunty believes ASIC should use methods such as enforceable undertakings to regulate the industry, rather than fines.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION,(SPACE)THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED,(SPACE)AUSTRALIANSUPER PTY LTD

ASX faces dividend horror story as companies slash payouts

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Original article by Alex Gluyas
The Australian Financial Review – Page: 21 : 5-Mar-25

The combined dividend payout for companies in the benchmark S&P/ASX 200 Index was just $31.2bn in the February reporting season. Bell Potter strategist Richard Coppleson notes that it is the lowest payout for this period since 2021, at the height of the COVID-19 pandemic. The three major listed iron ore miners reduced their dividends in response to a sharp fall in the price of the steel input during 2024. Citigroup expects further decline in the mining sector’s dividends, amid expectations that the iron ore price will also fall as new supply enters the market later in 2025. The firm also anticipates lower dividends from bank stocks, which dominate the ASX along with resources stocks.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BELL POTTER SECURITIES LIMITED, CITIGROUP PTY LTD

Risk of mortgage stress increased in January, before the Reserve Bank cut interest rates for the first time since 2020

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Original article by Roy Morgan
Market Research Update – Page: Online : 5-Mar-25

New research from Roy Morgan shows that 1,633,000 mortgage holders (28.9%) were ‘At Risk’ of ‘mortgage stress’ in January 2025. This represents a third straight monthly increase since October, but is still 1.4% lower than the June figures prior to the Stage 3 tax cuts. Modelling by Roy Morgan shows that the number of mortgage holders considered to be ‘At Risk’ will fall by 26,000 in February to 1,607,000 (28.4% of mortgage holders) following the Reserve Bank’s interest rate cut; the number of mortgages ‘At Risk’ is set to drop further if the Reserve Bank cuts interest rates again in April. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 1,043,000 (18.9% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.6%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED, RESERVE BANK OF AUSTRALIA

Finance sector has gender balance – except the pay gap

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Original article by Helen Trinca
The Australian – Page: 15 : 4-Mar-25

The Workplace Gender Equality Agency’s latest annual report shows that women now comprise 53 per cent of workers in Australia’s banking, finance and insurance sector. However, the report notes that the gender pay gap in this sector is 22.3 per cent, compared with the national pay gap of 12.1 per cent. The average gender pay gap for the nation’s four major banks ranges from 18.8 per cent to 22.4 per cent; in contrast the average pay gap at Morgan Stanley is 58.6 per cent, although its base salary gap is just 37.3 per cent. Meanwhile, women comprise just 36 per cent of the top remuneration quartile in the financial services industry, and predominantly work in roles that have lower pay.

CORPORATES
AUSTRALIA. WORKPLACE GENDER EQUALITY AGENCY

Private Health Insurance Switching: HCF, Bupa, and ahm see biggest customer growth

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Original article by Roy Morgan
Market Research Update – Page: Online : 25-Feb-25

Data from Roy Morgan shows that despite rising cost-of-living pressures, most Australians are maintaining private health insurance rather than opting out, but they are switching. As of December 2024, over half of Australians aged 14+ (57.2%) hold a private health insurance policy – equivalent to approximately 12.9 million people. This represents steady growth over the past five years, rising from 52.9% in December 2020 to 57.2% in December 2024. Some 6.8% of private health insurance policies were switched to another company in the year to December 2024, while 17.9% were renewed after approaching another company. In total, close to one in four (24.6%) people looked for a better health insurance policy deal, up from 22.3% in the previous year. HCF, Bupa and ahm have been the biggest winners from customer switching in the past 12 months, benefiting from their reputation for competitive pricing. In contrast, Medibank Private saw the largest customer loss due to switching.

CORPORATES
ROY MORGAN LIMITED, THE HOSPITAL CONTRIBUTIONS FUND OF AUSTRALIA LIMITED, BUPA AUSTRALIA PTY LTD, AHM HEALTH INSURANCE, MEDIBANK PRIVATE LIMITED – ASX MPL

Two-year freeze on bush bank closures

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Original article by David Ross
The Australian – Page: 7 : 12-Feb-25

Treasurer Jim Chalmers says the banking sector has agreed to retain all existing branch banks in regional areas until at least mid-2027. The deal to extend the moratorium on branch closures for two years has coincided with a recent move by three of the major banks to renew their deal to provide banking services via Australia Post outlets. Australian Banking Association CEO Anna Bligh notes that despite the growing shift to online banking, many customers in regional areas still prefer to use branches.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BANKING ASSOCIATION, AUSTRALIA POST

New trends in banking: Digital banks and Macquarie gaining ground in 2024

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Original article by Roy Morgan
Market Research Update – Page: Online : 12-Feb-25

New data on customers’ choices in banking from Roy Morgan’s Single Source survey shows that more Australians turned to newer digital banks, and Macquarie, as their Main Financial Institution (MFI) in 2024. Some 32.8% of Australians considered Commonwealth Bank to be their MFI in 2024. ANZ holds second place at 11.6%, followed by Westpac at 11.4% and NAB at 11.2%. Together, the big four banks make up 67.0% of MFI Share, down 0.6% from 2023. ING, ranked fifth, also saw a slight decline to 4.3%. Newer digital banks like ANZ Plus, ME Bank, Ubank and Up have increased their MFI Share by 0.3% to 2.0%. Macquarie Bank saw a rise of 0.4% to 1.5%, gaining ground across all age groups. Macquarie’s growth in MFI Share coincides with its increase in mortgages and deposits share. These latest banking MFI ratings come from the Roy Morgan Single Source survey, derived from in-depth interviews with over 60,000 Australians each year.

CORPORATES
ROY MORGAN LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ANZ PLUS, ME BANK, UBANK, UP, ING BANK (AUSTRALIA) LIMITED, MACQUARIE BANK LIMITED

AusSuper tipped $500m into Nvidia before DeepSeek crash

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Original article by Joshua Peach
The Australian Financial Review – Page: 20 : 4-Feb-25

Corporate filings with the US Securities & Exchange Commission show that AustralianSuper ramped up its investment in semiconductor manufacturer Nvidia during the second half of 2024. The industry superannuation fund bought 2.42 million shares in Nvidia in the December quarter; based on the stock’s average price during the period, AustralianSuper is estimated to have paid around $US304m ($489m) to increase its total exposure to Nvidia to more than $US1bn at the end of 2024. Nvidia’s market value subsequently fell by $US600m on 27 January, in response to revelations about China’s DeepSeek artificial intelligence model.

CORPORATES
AUSTRALIANSUPER PTY LTD, NVIDIA CORPORATION, UNITED STATES. SECURITIES AND EXCHANGE COMMISSION

NAB cuts rates ahead of Reserve

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Original article by Cameron Micallef
The Australian – Page: 19 : 4-Feb-25

National Australia Bank has pre-empted the Reserve Bank’s upcoming monetary policy decision by reducing some of its mortgage interest rates. NAB has become the first major bank to cut its fixed interest rates in 2025, although Sally Tindall from Canstar expects rival banks to do so as well. Canstar notes that NAB has reduced its fixed rates for owner-occupiers by up to 0.25 percentage points, while fixed interest rates for property investors have been cut by up to 0.3 percentage points. The RBA is widely tipped to reduce the cash rate at its board meeting in mid-February.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, CANSTAR PTY LTD