K: Financial and Insurance Services

Reserve urges stingy banks to open up the credit floodgates

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Original article by Paul Garvey, David Rogers
The Australian – Page: 19 & 29 : 21-Mar-19

The Reserve Bank of Australia’s assistant governor Michele Bullock has urged the nation’s banks to be less risk-averse with regard to mortgage lending. She has used an Urban Development Institute of Australia speech to argue that banks should relax their lending standards in the wake of the Hayne royal commission and the Australian Prudential Regulation Authority’s move to ease restrictions on lending. Bullock added that a credit crunch in Australia is unlikely, but this could depend on the outlook for the housing market.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, URBAN DEVELOPMENT INSTITUTE OF AUSTRALIA, AUSTRALIAN BANKING ASSOCIATION

Boutique and robo models the new face of financial advice

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Original article by James Eyers, Elouise Fowler
The Australian Financial Review – Page: 17 : 21-Mar-19

Westpac CEO Brian Hartzer expects banks to focus on using automated solutions to provide personal financial advice in future, due to the high cost of providing such services. Hamilton Wealth CEO Will Hamilton agrees that so-called robo-advice may be the only option for banks if they are to continue to offer financial advice on a large scale. Hartzer adds that consumers will still be able to pay for bespoke personal finance advice via boutique firms.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, HAMILTON WEALTH MANAGEMENT PTY LTD, VIRIDIAN ADVISORY PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BT FINANCIAL GROUP PTY LTD, KORDA CAPITAL, SIX PARK

Westpac retreats from financial advice

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Original article by James Frost
The Australian Financial Review – Page: 1 & 16 : 20-Mar-19

Westpac will cease serving its existing personal financial advice customers at the end of June, after striking a deal with Viridian to exit the sector. Westpac CEO Brian Hartzer concedes that its personal finance advice business has not been profitable for some time, and increased regulation was a major factor in its decision to withdraw from the sector. Westpac faces restructuring costs of $250m to $300m, while about 900 full-time equivalent employees will be impacted by the decision to exit financial advice. Westpac expects the move to result in annual savings of $280m by 2020.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, VIRIDIAN ADVISORY PTY LTD

Cash rate could fall below 1pc, UBS says

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

George Tharenou of UBS says the Reserve Bank of Australia should immediately reduce the cash rate by 50 basis points to one per cent, given the state of the economy and the housing market. Tharenou adds that the central bank should also signal that it is prepared to cut official interest rates even further in order to avoid a market shock later on. He has also not ruled out measures such as quantitative easing. Tharenou expects rate cuts in July and August, although he says weak labour market data could force its hand earlier.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Hayne incites confusion over financial industry codes

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Original article by John Kehoe
The Australian Financial Review – Page: 2 : 18-Mar-19

Financial services industry codes have been designed by industry bodies such as the Australian Banking Association and the Financial Services Council. The banking code is enforceable through contracts between banks and customers, but codes covering non-banking financial services are not legally or contractually enforceable. One of the Hayne royal commission’s recommendations was that industry codes should be more legally enforceable, but governments, regulators and industry bodies are uncertain as to how to implement the recommendation.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN BANKING ASSOCIATION, FINANCIAL SERVICES COUNCIL, INSURANCE COUNCIL OF AUSTRALIA LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. DEPT OF THE TREASURY

CBA shelves wealth sale on Hayne hit

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Original article by Richard Gluyas
The Australian – Page: 21 & 25 : 15-Mar-19

The Commonwealth Bank has advised that the divestment of its wealth and mortgage broking assets has been put on hold to allow it to focus on implementing the Hayne royal commission’s recommendations and its customer remediation program. National Australia Bank also recently indicated that it will postpone its proposed demerger of wealth manager MLC due to the fallout from the royal commission.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COLONIAL FIRST STATE GROUP LIMITED, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, FINANCIAL WISDOM LIMITED, COUNT FINANCIAL LIMITED, AUSSIE HOME LOANS LIMITED, MLC LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, IOOF HOLDINGS LIMITED – ASX IFL, MITSUBISHI UFJ TRUST AND BANKING INCORPORATION, WESTPAC BANKING CORPORATION – ASX WBC

ANZ ditches forecast for RBA rate increases

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Original article by David Rogers
The Australian – Page: 21 : 14-Mar-19

The ANZ Bank has scaled back its expectations for official interest rate rises in the near-term, forecasting that the cash rate will remain at 1.5 per cent until 2021. ANZ had previously expected two increases in the cash rate during 2020. ANZ’s David Plank says economic indicators other than GDP growth need to be taken into account when forecasting monetary policy, including labour market data. He adds that the Reserve Bank could act quickly to reduce the cash rate if signs of weakness in the labour market emerge.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK HEALTH SOCIETY LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

ING gains as customers flee the big banks

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 14-Mar-19

The number of customers for whom ING Australia is their main bank has risen by 57 per cent in the last year, to 645,000. This compares with just 100,000 customers in 2013. ING Australia CEO Uday Sareen says positive advocacy from the digital-only bank’s existing customers has been a major of its recent growth, which has also coincided with the Hayne royal commission. ING Australia booked a statutory net profit of $401m in 2018, an increase of 15 per cent, while deposits grew by nine per cent to $43.4bn.

CORPORATES
ING AUSTRALIA HOLDINGS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, APPLE PAY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC

AustralianSuper declares war on DIY funds

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Original article by Joanna Mather
The Australian Financial Review – Page: 3 : 13-Mar-19

AustralianSuper CEO Ian Silk will use a speech in Brisbane on 13 March to argue for greater regulation of self-managed superannuation funds. He will tell the Conference of Major Super Funds of the need for an inquiry into the performance of SMSFs. Research by the Productivity Commission has concluded that SMSFs that hold less than $500,000 tend to perform much worse than regular super funds. Silk will also argue that super funds which consistently underperform should not be allowed to remain in business.

CORPORATES
AUSTRALIANSUPER PTY LTD, CONFERENCE OF MAJOR SUPERANNUATION FUNDS (CMSF) PTY LTD, AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

NAB customers get $110m compo

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Original article by Richard Gluyas
The Australian – Page: 19 & 23 : 13-Mar-19

National Australia Bank has disclosed that 310,000 customers have collectively been paid $110m over the fee-for-no-service scandal since mid-2018. Acting CEO and chairman-elect Phil Chronican has also used a letter to shareholders to concede that much more work needs to be done at NAB, and he has stressed the need to ensure that the bank always get things right for customers. Meanwhile, chief people officer Lorraine Murphy has become the first NAB executive to resign since the recent leadership changes.

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, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, MACQUARIE GROUP LIMITED – ASX MQG