K: Financial and Insurance Services

CBA, NAB chairmen to face Hayne heat

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Original article by Richard Gluyas
The Australian – Page: 23 : 14-Nov-18

Commonwealth Bank of Australia chair Catherine Livingstone will appear before the financial services royal commission on 19 November. National Australia Bank chairman Ken Henry is expected to front the inquiry in the following week. The CEOs of the four major banks will also give evidence during the final round of public hearings, along with Macquarie Group’s Nicholas Moore, AMP’s Mike Wilkins and the heads of ASIC and APRA. CBA and NAB attracted criticism in the royal commission’s interim report.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE GROUP LIMITED – ASX MQG, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

CBA to turn fully green by 2030

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Original article by Mark Ludlow
The Australian Financial Review – Page: 10 : 14-Nov-18

The Commonwealth Bank of Australia aims to source 65 per cent of its electricity requirements from renewable sources by 2019, with a target date of 2030 for becoming solely reliant on renewables. As part of this strategy, CBA has secured a 12-year deal to source 96,000 megawatts annually from the Sapphire wind farm. CBA estimates that its direct emissions have been cut by 54 per cent since 2009. The bank will also become the first Australian company to join the global RE100 initiative, whose members have agreed to fully transition to renewables by 2050.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RE100, CWP RENEWABLES, PARTNERS GROUP AUSTRALIA PTY LTD, THE CLIMATE GROUP, CDP, SONY CORPORATION, PRICEWATERHOUSECOOPERS, LYFT INCORPORATED, INTERNATIONAL ENERGY AGENCY

Treasury’s housing pitch: don’t loosen lending rules

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Original article by Michael Roddan
The Australian – Page: 2 : 13-Nov-18

The Treasury has urged against any relaxation of housing lending laws in its submission to the banking royal commission’s interim report, stating that any such action would be detrimental to the long-term health of the financial system. Treasury said no benefit is to be gained by offering borrowers loans that they could not afford to repay. Treasurer Josh Frydenberg has indicated that he endorses Treasury’s submission.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RESERVE BANK OF AUSTRALIA

APRA names panel, deadline for review

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Original article by Joyce Moullakis
The Australian – Page: 21 : 13-Nov-18

The Australian Prudential Regulation Authority has advised that deputy chairman John Lonsdale will head an advisory panel that will review its enforcement strategy. The members of the advisory panel are former judge Robert Austin, the ACCC’s Sarah Court and University of New South Wales professor Dimity Kingsford Smith. The review has been commissioned in response to criticism of APRA in the financial services royal commission’s interim report, which noted the regulator’s reluctance to prosecute banks and insurers for misconduct.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, SUPREME COURT OF NEW SOUTH WALES, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, UNIVERSITY OF NEW SOUTH WALES, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN LABOR PARTY

Banks pledge to lend but with caveats

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 12-Nov-18

Australia’s major banks have urged the financial services royal commission not to over-regulate the way in which they assess corporate borrowers. The banks state that this would make it harder to increase their lending to small and medium enterprises. Their urgings have come as federal Treasurer Josh Frydenberg called upon the banks to "keep open the books", while National Australia Bank executive Anthony Healy says the bank is more willing to lend to SMEs without proper security.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. DEPT OF THE TREASURY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC

AUD breakout topside loses steam, wage price data now in focus – AFEX Monday Update – November 12, 2018

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The Australian dollar finally enjoyed some upside in the first half of last week after many months of downward pressure. The initial breakout of the long-term downtrend that had been in play since January on the first day of the month quickly gained momentum. An overall optimistic RBA coupled with the Democrats winning majority in the House of Representatives during the US Midterms gave even more support to the AUD, enabling it to test resistance just above 0.7300, before the moves ran out of steam throughout Friday’s trading sessions.

The moves initially appeared technical, with the AUD reaching a double top near 0.7300 resistance and traders taking profits on the moves, but with the US printing strong producer price index late in the session, the AUD/USD losses extended and it closed the week at 0.7225.

Looking ahead and there are several key economic releases this week that should help drive the Australian dollar:

  • Australian wage price index (Wed)
  • Chinese fixed asset investment and industrial production (Wed)
  • US CPI (Wed)
  • Australian employment (Thu)
  • US retail sales (Thu)

With the US Fed likely to keep raising interest rates whilst the RBA remains on hold, the attractiveness of higher US interest rates should keep the USD supported over the longer-term. As a result, if the AUD is to find any support short-term, it needs to see domestic data outperform. The RBA is unlikely to move on interest rates until it sees inflation and wage growth lift. Therefore Wednesday’s quarterly wage prix index will be closely monitored by traders. A strong number would likely see the AUD retest last week’s highs at 0.7302, however a weak number would likely put further weight on the Aussie and potentially see a 0.71 handle once again.

James King
Head of FX Dealing, AFEX
www.afex.com

Decade of banking’s dirty laundry aired

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Original article by James Frost
The Australian Financial Review – Page: 10 : 8-Nov-18

The financial services royal commission has released more than 200 documents that were submitted by banks in response to a request by the inquiry’s head Kenneth Hayne in late 2017. The documents highlight the wide range of incidents of misconduct that have occured in the sector over the last 10 years, including fraud, theft, money-laundering, the falsification of loan documents and breach of privacy laws.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, 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, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSSIE HOME LOANS LIMITED

Dollar rides rollercoaster of US mid-terms

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Original article by Melissa Yeo
The Australian – Page: 17 & 27 : 8-Nov-18

The Australian dollar peaked at $US0.7272 in local trading on 7 November, after the Democrats gained control of the US House of Representatives in the mid-term elections. The currency had fallen to $US0.7217 after it became clear that the Republicans would retain control of the Senate, erasing the gains it had made earlier in the session. Shane Oliver of AMP Capital says the Australian dollar may also have benefited from a delayed market reaction to the Reserve Bank’s latest economic forecasts.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, RESERVE BANK OF AUSTRALIA, DEMOCRATIC PARTY (UNITED STATES), REPUBLICAN PARTY (UNITED STATES), BNY MELLON INVESTMENT MANAGEMENT, RBC CAPITAL MARKETS, STANDARD AND POOR’S ASX 200 INDEX

CBA vows to repair brand at fiery AGM

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Original article by Joyce Moullakis
The Australian – Page: 21 : 8-Nov-18

The Commonwealth Bank of Australia’s remuneration report was passed by a majority of votes cast at its 2018 AGM, with a dissenting vote of just six per cent. CBA chair Catherine Livingstone told shareholders that the bank will undertake a "systematic overhaul" of its compliance and governance structures in the wake of a series of scandals and the misconduct exposed by the banking royal commission. CEO Matt Comyn said the bank is also taking heed of feedback after he wrote to eight million customers in September.

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, FEDERAL COURT OF AUSTRALIA

Westpac challenged on growth

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Original article by Joyce Moullakis
The Australian – Page: 23 : 7-Nov-18

Credit Suisse and Bell Potter have upgraded their earnings forecasts for Westpac following the release of the bank’s latest full-year financial results. Credit Suisse expects Westpac’s cash profit to rise to $8.29bn in 2018-19, after a flat profit of $8.07bn for 2017-18. Meanwhile, Macquarie Group and Morgan Stanley have reduced their earnings-per-share forecasts, and Victor German of Macquarie expects Westpac’s earnings growth in 2018-19 to be "negligible".

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CREDIT SUISSE (AUSTRALIA) LIMITED, BELL POTTER SECURITIES LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, MORGAN STANLEY AUSTRALIA LIMITED