BANKS AND BANKING – AUSTRALIA

Loans double at non-banks as majors slide

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 18 : 12-Nov-19

Australia’s four major banks and their subsidiaries experienced a 10 per cent fall in market share in business lending and equipment finance in 2018-19, according to the inaugural business lending index report, put together by mortgage aggregator FAST. FAST Group CEO Brendan Wright says the ability of the major banks to service the demands of business customers is being hampered by distractions and regulatory hurdles, and that non-bank players are taking advantage of this situation.

CORPORATES
FAST GROUP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

First home buyer risk riles banks

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 8 : 11-Nov-19

Major banks are doubtful that the federal government’s scheme to assist first-home buyers will start on its proposed date of 1 January. The scheme, announced during the final days of the May election campaign, will see the government provide up to 10,000 first-home buyers each year with free lenders’ mortgage insurance for people with deposits of as little as five per cent and less than 20 per cent. The big banks want the ability to charge higher interest rates for participants in the scheme, claiming that they will be a greater risk because of the low deposits involved.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Banks, super face new round of compo costs

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Original article by Joyce Moullakis
The Australian – Page: 21 : 7-Nov-19

Law firm Minter Ellison has warned that banks and wealth managers could face additional customer remediation costs if Westpac does not appeal against a recent judgment regarding the provision of financial advice. Minter Ellison partner Andrew Bradley says the Federal Court’s decision to overturn a judgment in favour of Westpac could also prompt more class actions in the financial services sector. The case centred on the distinction between general and personal advice.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, MINTER ELLISON, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, HERBERT SMITH FREEHILLS PTY LTD

More Westpac pain ahead as dividends cut

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 5-Nov-19

Westpac has posted cash earnings of $6.85bn for 2018-19, which is 15 per cent lower than previously. Its net interest margin fell 10 basis points to 2.12 per cent in the year to 30 September, while the final dividend has been reduced from $0.94 per share to $0.80. Westpac has also advised that its customer remediation costs have totalled $1.9bn pre-tax since 2017, and CEO Brian Hartzer has warned of the potential for further compensation and litigation. Meanwhile, a $2.5bn capital raising will lift Westpac’s common equity tier one capital ratio to around 11.25 per cent.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED, UBS HOLDINGS PTY LTD

Treasurer’s push to ease SME squeeze

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 9 : 1-Nov-19

The federal government will seek to make it easier for small and medium enterprises to access credit by urging banks to waive responsible lending standards for the sector. Treasurer Josh Frydenberg notes that the distinction between a small business loan and a personal loan is often a grey area, given that small business owners often use their family home as security when taking out a loan. Council of Small Business of Australia CEO Peter Strong says banks often advise small business owners to take out a personal loan instead, as they are cheaper and less complicated.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, COUNCIL OF SMALL BUSINESS ORGANISATIONS OF AUSTRALIA LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

ANZ warns of tough going as profit falls

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Original article by Richard Gluyas
The Australian – Page: 17 & 21 : 1-Nov-19

The ANZ Bank’s 2018-19 cash profit was steady at $6.47bn, although its net profit fell seven per cent to $5.95bn. ANZ has warned that trading conditions are likely to remain ‘challenging’ for some time, with CEO Shayne Elliott noting that consumers are opting to save rather than spend their money in the low interest rate environment. He has also rejected suggestions that banks are ‘profiteering’, arguing that ANZ’s return on equity of 10.9 per cent is not unreasonable. ANZ’s final dividend of $0.80 per share will be franked to 70 per cent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Banks face a crisis: former Westpac chief Morgan

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Original article by David Rogers
The Australian – Page: 17 & 28 : 31-Oct-19

Former Westpac CEO David Morgan says the Australian banking sector is experiencing its fourth crisis, due to factors such as slowing economic growth, the misconduct exposed by the Hayne royal commission, and the Banking Executive Accountability Regime. The banking industry veteran, who is currently CEO of Chi-X Australia, cautions against over-regulating the sector, noting that the nation has a world-class banking system by global standards.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CHI-X AUSTRALIA PTY LTD, INTERNATIONAL MONETARY FUND, AUSTRALIA. DEPT OF THE TREASURY

No option for savers as deposits slashed

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Original article by Michael Roddan
The Australian – Page: 17 & 28 : 29-Oct-19

The Commonwealth Bank’s term deposit interest rates are now well below the official inflation rate. The banking major has cut its term deposit rates by a much higher margin than the 75-basis point reduction in the cash rate so far in 2019. InfoChoice CEO Vadim Taube says savers need to look beyond the four major banks for term deposits that offer above-inflation interest rates. Meanwhile, Liberal MP Tim Wilson says the Reserve Bank should be wary of further easing monetary policy until the impact of the recent series of official interest cuts can be determined.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, INFOCHOICE LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, LIBERAL PARTY OF AUSTRALIA

Westpac lashed in advice ruling

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 29-Oct-19

The Federal Court has upheld the Australian Securities & Investments Commission’s appeal against a December 2018 judgment in favour of Westpac. The case had centred on Westpac’s use of cold-calling to urge its customers to switch their superannuation accounts from other providers to its BT subsidiary, and whether this constituted the provision of general or personal advice. Westpac could face a financial penalty of up to $15m if it decides not to appeal the ruling.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BT FINANCIAL GROUP PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA

Goode pushes for RBA rethink

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Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 28-Oct-19

Former ANZ Bank chairman Charles Goode has urged Treasurer Josh Frydenberg to work with the Reserve Bank of Australia to cut its inflation target to as low as one per cent. Goode also believes that the Australian Securities & Investment Commission’s responsible lending rules are restricting lending, and he doubts that people like Frank Lowy and Harry Triguboff would have been able to establish their property businesses if the current responsible lending rules had been around in the post-World War II years. Goode says having a lower inflation target would end the RBA’s obsession with reducing interest rates to meet what he argues are outdated inflation targets.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION