K: Financial and Insurance Services

‘Flawed but not illegal’: NAB digs in over fees for no service

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Original article by James Frost
The Australian Financial Review – Page: 15 & 20 : 26-Feb-19

The Australian Securities & Investments Commission’s case against National Australia Bank over claims that it charged customers for services that were not provided is due to go to court in May. NAB has conceded that it did the wrong thing in regard to customers who were not linked to a financial adviser, but the bank has rejected claims that it was in the wrong in instances where the customer was linked to a financial planner. It appears to be arguing that making advice available to this second group of customers justified the charging of a fee.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, MLC LIMITED

RBA could jump rates gun: UBS

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Original article by Samantha Bailey
The Australian – Page: 28 : 26-Feb-19

UBS still expects the Reserve Bank of Australia to reduce the cash rate in November 2019 and February 2020. However, UBS has warned that there is potential for monetary policy to be eased sooner if domestic and global conditions justify such a move. These include a further downturn in house prices and a rise in the unemployment rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

Industry Superannuation Funds increase lead in satisfaction with performance

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Feb-19

New research by Roy Morgan shows that members’ satisfaction with the financial performance of industry superannuation funds was 62.1% in the six months to January 2019, compared with 57.3% for retail super funds. Satisfaction with retail funds was 1.6% below that of industry funds in 2018, and this gap has now increased to 4.8%. Eight of the top 10 performing super funds, based on satisfaction with their financial performance, were industry funds in January 2019. The highest rating was for Catholic Super (72.1%), followed by Unisuper (70.8%). The only two retail funds to make it to the top 10 were Macquarie (65.9%) and Colonial First State (60.4%). These results are from the newly released Roy Morgan ‘Satisfaction with Financial Performance of Superannuation in Australia January 2019’ report. The data in this latest report represents some of the findings from Roy Morgan’s Single Source survey, which is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including over 30,000 with superannuation. Results presented here are based on interviews conducted in the six months to January 2019.

CORPORATES
ROY MORGAN LIMITED, CATHOLIC SUPER, UNISUPER LIMITED, MACQUARIE SUPERANNUATION, COLONIAL FIRST STATE SUPER

Banks on right track with open banking, says APRA chairman Byres

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 25-Feb-19

Australian Prudential Regulation Authority chairman Wayne Byres says the nation’s banks are working hard to meet the schedule for implementing the open banking regime. The first phase of open banking, part of the federal government’s consumer data right program, takes effect on 1 July. Byres told a Senate committee hearing on 21 February that the banks are concerned about greater information security risks as a result of open banking being introduced, as well as the use of derived data, which he says they regard as their intellectual property.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKING ASSOCIATION

The 2018 8th Annual Roy Morgan Customer Satisfaction Awards: Banking and Finance Winners

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Original article by Roy Morgan
Market Research Update – Page: Online : 25-Feb-19

Australia’s most satisfying banks, insurers and superannuation funds have been announced at the 8th Annual Roy Morgan Customer Satisfaction Awards. In a very difficult year for banking with the Royal Commission, declining trust, combined with disrupters, it is a major achievement to be rated the number one bank for customer satisfaction. The winner in a very crowded field has to be a strong performer, and this honour goes to Heritage Bank. For the sixth year running, the Commonwealth Bank has claimed the annual award for Major Bank of the Year, driven in particular by strength in mobile and internet banking satisfaction. People’s Choice Credit Union is again the winner in the category of Building Societies and Credit Unions, while RACT has won the General Insurer award for the fourth year in a row, with a clean sweep of the 12 monthly titles. Meanwhile, not-for-profit health fund St Luke’s Health has again won the Private Health Insurer award, while Macquarie and Catholic Super are retail and industry super fund of the year respectively.

CORPORATES
ROY MORGAN LIMITED, HERITAGE BANK LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, PEOPLE’S CHOICE CREDIT UNION, RACT INSURANCE PTY LTD, ST LUKE’S HEALTH INSURANCE, MACQUARIE SUPERANNUATION, CATHOLIC SUPER

Westpac faces class action on loans

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Original article by Richard Gluyas
The Australian – Page: 24 : 22-Feb-19

Westpac intends to defend a class action launched by Maurice Blackburn on behalf of home loan customers. The law firm will contend that Westpac breached its responsible lending obligations by failing to sufficiently assess borrowers’ capacity to repay the loan and to verify information about their financial circumstances. Westpac had been subject to similar legal action by the Australian Securities & Investments Commission in 2018, and that case will return to court after a settlement was rejected by the presiding judge.

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

Evans’ rate cut talk turns focus on RBA stance

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Original article by David Rogers
The Australian – Page: 30 : 22-Feb-19

Westpac’s chief economist Bill Evans now expects the Reserve Bank to reduce the cash rate twice in 2019, in August and November. His forecast is based on expectations that economic growth will slow to 2.2 per cent in 2019 and 2020, with the unemployment rate rising to 5.5 per cent in the second half of 2019. Evans had previously expected official interest rates to remain on hold for the next two years.

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

Gillespie predicts RBA will trim rates as house prices fall

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Original article by Natasha Gillezeau
The Australian Financial Review – Page: 28 : 21-Feb-19

Brett Gillespie of Ellerston Capital estimates that there is a 30 per chance that the Reserve Bank of Australia will reduce official interest rates in April. In contrast, financial markets are currently pricing in a six per cent chance of a rate cut. Gillespie expects a further downturn in house prices in the near-term, which may prompt the central bank to ease monetary policy prior to the federal election. The RBA adopted a more dovish tone on interest rates at its February meeting, after signalling in December that rates were more likely to go up than down.

CORPORATES
ELLERSTON CAPITAL PTY LTD, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

NAB CEO forfeits $22m as push for changing of the guard speeds up

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Original article by Joyce Moullakis
The Australian – Page: 17 & 22 : 21-Feb-19

National Australia Bank has revealed that former CEO Andrew Thorburn will receive a ‘golden handshake’ of $1m. However, he will forgo about $22m in performance rights following his resignation. Thorburn was paid about $4m in 2018, but acting CEO Phil Chronican will be paid just $150,000 a month while he is in the role. Meanwhile, NAB chairman Ken Henry will have no role in selecting a permanent successor to Thorburn, while Angus Gluskie of White Funds Management has urged NAB to choose a new CEO within six months.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WHITE FUNDS MANAGEMENT PTY LTD, CLSA AUSTRALIA PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED

David Morgan reveals failed Westpac-CBA mega-merger

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Original article by Tony Boyd
The Australian Financial Review – Page: 1 & 2 : 20-Feb-19

The official biography of former Westpac CEO David Morgan outlines the bank’s proposed merger with the Commonwealth Bank of Australia in 1989, when he was the head of institutional banking at Westpac. The merger ultimately failed to proceed due to disagreement over leadership of the new entity. Westpac CEO Bob Joss was to have been overlooked in favour of CBA CEO David Murray, with Joss to be given the role of vice-chairman in charge of restructuring. CBA directors were also against Morgan and Westpac CFO Pat Handley joining the board of the combined group.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BT FINANCIAL GROUP PTY LTD, DBS BANK LIMITED, ST GEORGE BANK LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN LABOR PARTY, ACTU, MORGAN STANLEY AUSTRALIA LIMITED, JP MORGAN AUSTRALIA LIMITED