K: Financial and Insurance Services

Super mergers could save $1.8bn

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Original article by Michael Roddan
The Australian – Page: 17 & 24 : 26-Nov-18

The Productivity Commission claims that $1.8 billion in savings could be gained each year if Australia’s 50 highest-cost superannuation funds were forced to merge with the 10 lowest-cost funds. The Commission’s research indicates that around eight per cent of all superannuation accounts are "trapped" in funds that have high fees and generally underperform, while there are 93 funds with less than $1 billion in assets. Its figures come as the banking royal commission prepares to take the Australian Prudential Regulation Authority to task over its tardy oversight of the superannuation sector.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Hayne to quiz NAB bosses on legal breaches

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Original article by James Frost
The Australian Financial Review – Page: 15 & 19 : 26-Nov-18

The final week of public hearings of the financial services royal commission will commence in Melbourne on 26 November. National Australia Bank CEO Andrew Thorburn and chairman Ken Henry are scheduled to appear, as are acting AMP CEO Mike Wilkins, ANZ CEO Shayne Elliott and Bendigo & Adelaide Bank chairman Robert Johanson. The appearance of Thorburn and Henry comes on the back of growing evidence that NAB has breached laws that could see it hit with criminal and civil penalties.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Industry Superannuation Funds increase satisfaction lead

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Nov-18

New findings from Roy Morgan show that the level of satisfaction with the financial performance of industry superannuation funds was 61.8% in the six months to October 2018, compared with 58.2% for retail super funds. Satisfaction with industry funds has increased by 2.7% over the last year, compared to a gain of 1.3% points for retail funds. The only area where retail funds have higher satisfaction than industry funds is for balances below $5,000, where they lead marginally with 49.0% compared to 48.6%. However, this segment is of little current value as it only holds 0.1% of the total market value, despite having 10.9% of customers. These are the latest findings from Roy Morgan’s "Satisfaction with Financial Performance of Superannuation in Australia Report October 2018", 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.

CORPORATES
ROY MORGAN LIMITED

Satisfaction with banks declines further in October

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Nov-18

New results from Roy Morgan shows that customer satisfaction with Australia’s banks fell to 78.0% in the six months to October 2018, compared with 78.5% in the six months to September. Satisfaction with banks was 81.2% in the six months to January 2018, prior to the Finance Royal Commission. The decline of 3.2% since January has resulted in the lowest satisfaction with banks in seven years, although it remains above the long-term average and is much higher than the 58.7% recorded in 2001. Satisfaction with the four major banks has fallen to 75.0%, down from 79.2% in the six months to January. However, satisfaction among customers of other banks has declined by only 1% over the same period, leaving them with an overall customer satisfaction rating of 83.9%. Roy Morgan’s "Customer Satisfaction-Consumer Banking in Australia October Report" is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes.

CORPORATES
ROY MORGAN LIMITED

Moore claims Macquarie pay model is better than the majors

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Original article by Joyce Moullakis
The Australian – Page: 24 : 23-Nov-18

Macquarie Group CEO Nicholas Moore has told the banking royal commission that its remuneration model is superior to those used by Australia’s major banks. Moore said its model provides more accountability, and that profit share is more powerful than bonuses. Commenting on the issue of the commissions paid to mortgage brokers, Moore said he would be reluctant to see them abolish and replaced with a flat fee, as consumers might be reluctant to pay the latter.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, KPMG AUSTRALIA PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

ASIC antithesis of tough attitude

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Original article by James Eyers, James Frost
The Australian Financial Review – Page: 14 : 23-Nov-18

Australian Securities & Investments Commission chairman James Shipton appeared before the royal commission on 22 November. He conceded that ASIC should have taken steps against National Australia Bank’s home loan "introducer" program some years ago. He was also queried about a July email in which it was suggested that NAB should only be required to make a "community benefit payment" as penalty for the program; Shipton stated that the views expressed in the email were not his.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BT FINANCIAL GROUP PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

We should have cut bonuses: CBA chair

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Original article by Joyce Moullakis
The Australian – Page: 2 : 22-Nov-18

The Commonwealth Bank of Australia’s executive remuneration came under scrutiny by the financial services royal commission on 21 November. CBA chair Catherine Livingstone has conceded that the bank failed to reduce or withhold bonuses in 2016, despite a series of compliance breaches. She also acknowledged that it might have been appropriate for CBA to note in its latest annual report that former chairman David Turner had declined the board’s request to repay 40 per cent of his directors’ fees as a result of the compliance breaches.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Challenge emerges to inflation target regime

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Original article by Vesna Poljak
The Australian Financial Review – Page: 27 : 22-Nov-18

The Bank of Canada has signalled that it will undertake a review of alternatives to its inflation target of two per cent. Options that the central bank will consider include increasing the inflation target, targeting aggregate prices or nominal income, and adding a full employment objective. The move may increase pressure on the Reserve Bank of Australia to reappraise its own inflation target of 2-3 per cent. Some economists have argued that the RBA’s inflation target is too high, although many advocate the status quo.

CORPORATES
BANK OF CANADA, RESERVE BANK OF AUSTRALIA, BETASHARES CAPITAL LIMITED, UNIVERSITY OF TECHNOLOGY, SYDNEY

Reasons to be grateful amid rout: Citi strategist

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Original article by David Rogers
The Australian – Page: 27 : 22-Nov-18

The Australian sharemarket shed 6.1 per cent in October, while bearish sentiment in the US saw the S&P 500 fall seven per cent. However, Tobias Levkovich of Citigroup is upbeat about the outlook for US equities in the year ahead, noting that the "sentiment metric" indicates a high probability that the S&P 500 will be higher in 12 months’ time. David Kostin of Goldman Sachs also expects the S&P 500 to rise over the next year.

CORPORATES
STANDARD AND POOR’S 500 INDEX, CITIGROUP INCORPORATED, THE GOLDMAN SACHS GROUP INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, GROUP OF TWENTY (G-20)

CBA bosses share shame blame

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Original article by Joyce Moullakis
The Australian – Page: 19 & 23 : 21-Nov-18

Commonwealth Bank of Australia CEO Matt Comyn and chair Catherine Livingstone appeared before the financial services royal commission on 20 November. Comyn conceded that the bank should have been aware of its legal obligations regarding antimoney-laundering laws, while Livingstone said the CBA board had failed to act on audit reports which had raised concerns well below Austrac took legal action. Comyn also told the inquiry that predecessor Ian Narev had dismissed his concerns about the sale of so-called "junk" consumer insurance products.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, MORGAN STANLEY AUSTRALIA LIMITED