Loan deferral scheme a win for economy

Original article by James Frost
The Australian Financial Review – Page: 19 : 28-Apr-21

More than 468,000 home loan customers in Australia were on deferred repayment plans at the height of the COVID-19 pandemic; this had fallen to 3,170 by the end of March. Likewise, the number of small business borrowers who have deferred their loan repayments has fallen from 235,440 to just 508. Overall, just 0.5 per cent of all loans are still on a ‘repayment holiday’. The loan deferral scheme ended on 31 March, but Australian Banking Association CEO Anna Bligh says the nation’s banks will continue to provide support for distressed households and businesses.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION

Westpac could halve its network: analysts

Original article by Richard Gluyas
The Australian – Page: 17 : 22-Apr-21

Brendan Sproules of Citigroup says Westpac could significantly reduce costs by rationalising its network of bank branches and divesting non-core assets. Westpac currently has 958 branches nationwide, but Citigroup’s modelling suggests that there is scope to reduce this to just 518. Westpac’s chief financial officer Michael Rowland will outline a cost-cutting strategy when the bank releases its interim results on 3 May.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CITIGROUP PTY LTD

Consolidation looms for local lenders

Original article by Joyce Moullakis
The Australian – Page: 13 & 16 : 12-Apr-21

Global payments and financial services technology group Fiserv processes about one out of every eight payment transactions in Australia. Kees Kwakernaak, the CEO of Fiserv’s Australian arm, expects further consolidation in the local banking sector in coming years. Kwakernaak anticipates mergers at the smaller end of the market in particular. However, he says consolidation in the sector is unlikely to deter non-bank financial services providers from entering the domestic market. Kwakernaak also anticipates greater collaboration among banks, which will be facilitated by initiatives such as the open banking regime.

CORPORATES
FISERV INCORPORATED

Banks grilled on plans for Suncorp

Original article by Richard Gluyas
The Australian – Page: 13 & 16 : 12-Apr-21

The CEOs of Australia’s four major banks will appear before a parliamentary committee on 15 and 16 April. Shadow assistant treasurer Andrew Leigh says he will seek a commitment from the CEOs that they will not seek to acquire Suncorp’s banking division should it be put on the market. He also wants to them to rule out any further acquisitions in the financial technology sector. The housing market, cyber security, lending standards and the recovery from the COVID-19 pandemic are also likely to be among the issues raised by the economics committee.

CORPORATES
AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, AUSTRALIAN LABOR PARTY

Westpac insurance sales misleading: ASIC

Original article by Jonathan Shapiro
The Australian Financial Review – Page: 18 : 9-Apr-21

The Australian Securities & Investments Commission is taking legal action against Westpac in the Federal Court. ASIC claims that Westpac mis-sold credit card insurance to customers who did not want it, with more than 380 customers affected in a four-month period between April and July 2015. Westpac has stated that it will work with ASIC constructively through the court process, and that it has not sold credit card insurance since 2019. Credit card insurance came under scrutiny during the Hayne royal commission, and the big banks have stopped selling the product.

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

Don’t cut support too quickly: Judo

Original article by Joyce Moullakis
The Weekend Australian – Page: 19 & 24 : 9-Jan-21

Judo Bank’s joint CEO Joseph Healy has warned of the potential for a surge in small business insolvencies in the June quarter. Healy notes that insolvencies are currently about 35 per cent lower than comparable periods due to factors such as COVID-19 support measures, and he has cautioned the federal government against phasing out support packages for the small business sector too quickly. Meanwhile, Healy is upbeat about the outlook for the small business-focused ‘challenger’ bank, despite the recent decision of rival Xinja to withdraw from the banking sector.

CORPORATES
JUDO BANK PTY LTD, XINJA BANK LIMITED

Failed Xinja scored secret China lifeline

Original article by Michael Roddan
The Australian Financial Review – Page: 13 & 14 : 21-Dec-20

Xinja recently handed back its banking licence to the Australian Prudential Regulation Authority following its failure to secure a $433 million injection from Dubai-based World Investments, while sources have stated that Xinja failed to secure any monies from Australian institutional investors. It has been revealed that Xinja secured a multimillion-dollar capital injection from a "shadowy" Chinese company during 2019, but that it kept the investment a secret; it is believed the company in question was called Happy Sino Steel.

CORPORATES
XINJA BANK LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, HAPPY SINO STEEL, WORLD INVESTMENTS

‘Solvency phase’: RBA warns of new bank pain

Original article by Richard Gluyas
The Australian – Page: 13 & 17 : 16-Dec-20

The Reserve Bank of Australia’s head of stability Jonathan Kearns says the liquidity phase of the COVID-19 crisis is giving way to a solvency phase, which is emerging as a new challenge for the banking sector. Kearns says the economic shock from the pandemic has been much worse than the global financial crisis, but notes that Australia’s banks have been resilient during COVID-19 and have continued to lend. Banks are likely to start encouraging customers to resume loan repayments in the March quarter, after many opted to defer repayments due to the pandemic.

CORPORATES
RESERVE BANK OF AUSTRALIA

Banks face trust crisis as customers go online

Original article by Cliona O’Dowd
The Australian – Page: 15 : 14-Dec-20

Accenture has released a report which shows that the proportion of Australians who trust banks to look after their financial wellbeing has fallen from 43 per cent to 29 per cent since 2018. Alex Trott of Accenture says the rapid shift to digital banking in response to the COVID-19 pandemic may undermine the progress that banks have made in restoring consumers’ trust in the wake of the Hayne royal commission. The report notes that fewer consumers have changed lenders in 2020, despite growing distrust of the banking sector.

CORPORATES
ACCENTURE

CBA profits cut despite growth in lending

Original article by James Frost, James Eyers
The Australian Financial Review – Page: 17 : 12-Nov-20

The Commonwealth Bank of Australia has reported a cash profit of $1.8bn for the September quarter, which is 16 per cent lower than previously. Household deposits increased by $15.8bn during the first three months of 2020-21, while mortgage lending increased by $5.6bn. CBA has advised that its net interest margin was lower than in the second half of 2019-20, primarily due to the impact of lower interest rates. CBA has also reported a sharp fall in the number of deferred loans since the end of the September quarter.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA