BANKS AND BANKING – AUSTRALIA

NAB latest company to investigate underpayments to staff

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Original article by
The New Daily – Page: Online : 16-Jun-20

National Australia Bank has admitted that about 1,500 employees have been underpaid, although Wendy Streets of the Finance Sector Union believes that the figure may be much higher. She says the issue of underpayments at NAB has been a concern for the union for some time. Affected staff will collectively receive about $1.3m in backpay, superannuation and interest, while the bank has commissioned King & Wood Mallesons and PwC to undertake a review of its payroll system.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, FINANCE SECTOR UNION, KING AND WOOD MALLESONS, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD

Bad loans hit small banks hard: Citi

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Original article by Cliona O’Dowd
The Australian – Page: 16 : 16-Jun-20

Citigroup analysts note that Australia’s smaller mortgage lenders have actively pursued increased market share in recent years. However, Citi warns that they are set to be hardest hit by a coronavirus-induced rise in loan losses later in 2020, as such losses tend to be highest during the first 3-4 years of a loan. Citi contends that small lenders will need to focus on capital demands rather than further growing their market share, which in turn is likely to prompt a swing back to large lenders.

CORPORATES
CITIGROUP PTY LTD

CBA sued over junk credit card insurance

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Original article by Lachlan Moffet Gray
The Australian – Page: 17 : 11-Jun-20

Plaintiff law firm Slater & Gordon has launched a class action on behalf of Commonwealth Bank customers who were sold inappropriate credit protection policies. The Federal Court action will allege that the bank sold credit card and personal loan insurance products to about 200,000 people whose employment status meant they would be unlikely to claim against the policies. The insurance products, which came under scrutiny by the Hayne royal commission, were discontinued in March 2018.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SLATER AND GORDON LIMITED – ASX SGH, FEDERAL COURT OF AUSTRALIA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

AUSTRAC, Westpac head to court

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Original article by James Frost
The Australian Financial Review – Page: 19 : 9-Jun-20

Westpac and AUSTRAC are having difficulty agreeing on an agreed statement of facts as the two parties prepare to heard for court. AUSTRAC has accepted Westpac’s admission that it broke the law 23 million times, but AUSTRAC has indicated it plans to pursue Westpac for a series of "unquantifiable" breaches. Justice James Allsop said on 30 March that Westpac and AUSTRAC should be ready to go to trial "sooner than later" in a case that may well cost Westpac more than $1 billion to settle.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Savings rates are drying up as banks race to the bottom on mortgages

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Original article by Matt Johnson
The New Daily – Page: Online : 3-Jun-20

Data from Canstar shows that Australian banks reduced the interest rates on a range of savings accounts and term deposits by up to 75 basis points in May. However, the interest rates on mortgage loans were reduced much less aggressively, averaging just 0.08 per cent for variable home loans and 0.36 per cent for fixed-rate loans. Steve Mickenbecker of Canstar attributes this to factors such as growing competition from non-bank mortgage lenders. However, he does not expect rates to fall much further.

CORPORATES
CANSTAR PTY LTD

ANZ urges stricken firms: wind up now

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Original article by James Frost
The Australian Financial Review – Page: 13 & 17 : 1-Jun-20

The ANZ’s head of retail and business banking, Mark Hand, suggests that 2021 will be a very difficult year for small businesses. He suggests that many small and medium enterprises will not recover from the COVID-19 crisis, even with loan deferrals from banks and wage subsidies from the federal government. He says the best move for some SME owners would be to wind up their business and walk away with some equity. The ANZ is worried that the recent spark of optimism resulting from a fall in new COVID-19 cases and the easing of some restrictions will result in some of its business borrowers becoming complacent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Lowe urges banks to lend again

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Original article by David Rogers
The Australian – Page: 13 & 17 : 22-May-20

Reserve Bank governor Philip Lowe has praised the resilience of Australia’s financial system and said that it is well-placed to ride out the coronavirus pandemic. Lowe has also told a Financial Services Institute webcast that banks should utilise the capital and liquidity buffers that they have built up over the last decade and continue to lend during the pandemic. Lowe also repeated his view that the prospect of negative interest rates in Australia is unlikely.

CORPORATES
RESERVE BANK OF AUSTRALIA, FINANCIAL SERVICES INSTITUTE OF AUSTRALASIA

NAB’s check on mortgage deferrals

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 15 : 18-May-20

The National Australia Bank announced in March that it would offer a six-month repayment reprieve to mortgage loan customers impacted by COVID-19, with 80,000 borrowers taking up its offer. It stated then it would wait for three months before contacting borrowers to see if they are able to start making payments again, but it has begun the process after just two months. All the other major banks have confirmed they will wait the three months before getting in touch with borrowers. A NAB spokesperson says it has commenced the process ahead of time to ensure it has got in contact with all relevant borrowers before the "three-month checkpoint". Recent figures from the Australian Banking Association reveal that 429,000 borrowers have sought a pause on their repayments since late March.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BANKING ASSOCIATION

Put reform on fast track: Westpac

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Original article by Joyce Moullakis
The Australian – Page: 13 & 17 : 5-May-20

Westpac has reported cash earnings of $993m for the first half of 2019-20, which is 70 per cent lower than previously. As previously flagged, the half-year result was marred by impairment charges totalling $2.23bn, including some $1.6bn for coronavirus-related loan losses. Westpac has deferred a decision on the payment of an interim dividend, while CEO Peter King has urged the national cabinet to move quickly to restart the economy when the pandemic abates. He has forecast a V-shaped economic recovery in 2021.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC

Bad debts hang over Westpac dividend plans

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Original article by James Frost, Aleks Vickovich, James Eyers
The Australian Financial Review – Page: 15 & 19 : 4-May-20

Westpac’s dividend payout is likely to be a key focus for investors when its half-year financial results are released on 4 May. Westpac has already advised of $1.6bn in impairment charges for coronavirus-related loan losses. Matt Williams of Airlie Funds Management says Westpac should not pay an interim dividend, arguing that investors expect companies to preserve capital in the current environment. David Walker of Clime Asset Management in turn expects Westpac to pay a much lower half-year dividend and opt for a dividend reinvestment plan.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AIRLIE FUNDS MANAGEMENT PTY LTD, CLIME ASSET MANAGEMENT PTY LTD