BANKS AND BANKING – AUSTRALIA

AMP to hit costs in bank merger

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Original article by Cliona O’Dowd
The Australian – Page: 17 & 23 : 11-Oct-19

Bell Potter analyst Lafitani Sotiriou has questioned AMP’s decision to merge its bank and Australian wealth divisions, suggesting that it is "strategy on the run". Allan Gray Australia CEO Simon Mawhinney in turn says the move raises conflicts of interest concerns. An AMP spokeswoman says the two businesses will have separate financial services licences and will remain separate legal entities after being folded into the new AMP Australia. Alex Wade will be CEO of the combined business.

CORPORATES
AMP LIMITED – ASX AMP, AMP BANK LIMITED

Savers come out second best as banks quietly slash interest rates on deposits

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Original article by Michael Roddan
The Australian – Page: 17 & 27 : 11-Oct-19

Lenders have cut interest rates on term deposits by between one and and 35 basis points since the Reserve Bank cut the official cash rate by 25 basis points on 1 October, according to data from ­RateCity. National Seniors Australia’s chief advocate Ian Henschke notes that a third of its members have their money in term deposits, with interest rates on term deposits now at their lowest since the 1950s. He claims that the federal government is "profiteering off the backs of pensioners", by not reducing the deeming rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, RATECITY PTY LTD, NATIONAL SENIORS AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN

Credit raters circle wagons around banks

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Original article by James Eyers, James Frost
The Australian Financial Review – Page: 11 & 14 : 10-Oct-19

Australia’s banks are under growing scrutiny over their failure to reduce their mortgage interest rates by 0.25 per cent in line with the latest official interest rate cut. However, S&P Global Ratings says banks’ profits and capital buffers may be adversely affected if they yield to political pressure and match the Reserve Bank’s rate cut. S&P adds that this could in turn prompt a review of the banking sector’s credit rating. Moody’s Investors Service and Fitch Ratings are also supportive of the banks’ decision to withhold part of the official interest rate cut.

CORPORATES
S&P GLOBAL RATINGS, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, RESERVE BANK OF AUSTRALIA, IBISWORLD PTY LTD, COPLEY FUND RESEARCH, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Strong economies need profitable banks, says Wilson

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Original article by James Frost, Vesna Poljak, Aleks Vickovich, Peter Ker
The Australian Financial Review – Page: 1 & 16 : 9-Oct-19

Wilson Asset Management chairman Geoff Wilson has rejected criticism of Australia’s major banks for failing to pass on the latest official interest rate cut in full. He contends that strong and profitable banks are essential for a strong economy, and he estimates that the sector’s earnings would be $4.5bn-$6bn lower if banks had reduced their mortgage interest rates by 0.75 per cent since June, in line with the Reserve Bank. Bendigo & Adelaide Bank chairman Robert Johanson has also dismissed claims by Prime Minister Scott Morrison that the banks are profiteering by withholding interest rate cuts.

CORPORATES
WILSON ASSET MANAGEMENT, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN LABOR PARTY

ANZ compo bill jumps to $1.2bn

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Original article by Joyce Moullakis
The Australian – Page: 21 : 9-Oct-19

The ANZ Bank has advised that its cash profit for the second half of 2018-19 will be marred by an after-tax charge of $559m due to increased provisions for customer-related remediation. ANZ has now announced a total of $1.22bn in after-tax compensation charges since 2017. Australia’s major banks have set aside a combined $7.6bn pre-tax to compensate customers, and Jarrod Martin of Credit Suisse expects this to increase. ANZ will release its financial results for the year to 30 September in late October.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CREDIT SUISSE (AUSTRALIA) LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, MORGANS FINANCIAL LIMITED, CITIGROUP PTY LTD

More work to do for CBA boss

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 8-Oct-19

Commonwealth Bank of Australia CEO Matt Comyn is seeking feedback from customers about what it is doing right and areas in which it can improve. He has sent a letter to customers in which he concedes that CBA still has a lot of work to do to restore its reputation in the wake of a series of scandals. Comyn has also written to employees, stating that amongst other things, the bank must keep listening to customers, complete a remediation program and implement the recommendations of the Hayne royal commission. CBA will provide a live stream of its upcoming customer forum in Brisbane.

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

Banks face heat over loyalty tax

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Original article by Patrick Durkin, James Frost, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 2 : 7-Oct-19

Australian Competition & Consumer Commission chairman Rod Sims has suggested that the nation’s banks are trying to "dud" their loyal customers. Sims, who is hoping Treasurer Josh Frydenberg will grant the ACCC’s request to conduct an inquiry into the competitive strength of the big banks, was commenting on the gap between mortgage interest rates offered to new borrowers and those offered to existing customers; the gap is generally half a percentage point. The banks have argued in private that it is not possible to offer the same competitive rates to all borrowers.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, EVANS AND PARTNERS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, DELOITTE TOUCHE TOHMATSU LIMITED

Savers do it tough as banks hold off cuts

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Original article by Jonathan Shapiro, Aleks Vickovich, Jemima Whyte
The Australian Financial Review – Page: 4 : 4-Oct-19

People who rely on interest income from their savings have been hard hit by the Reserve Bank of Australia’s aggressive monetary policy easing. Canstar notes that banks’ 12-month deposit rates have traditionally been about one per cent higher than the cash rate, but this has narrowed to 0.64 per cent. Term deposit rates and online savings account rates have both fallen sharply since the first of three official interest rate cuts in June, and Canstar’s Steve Mickenbecker says there is little scope for further reductions.

CORPORATES
RESERVE BANK OF AUSTRALIA, CANSTAR PTY LTD, UNIVERSITY OF TECHNOLOGY, SYDNEY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP BANK, MACQUARIE GROUP LIMITED – ASX MQG

ING achieves satisfaction ratings above ninety percent despite turbulent year for banking

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Original article by Roy Morgan
Market Research Update – Page: Online : 4-Oct-19

New Roy Morgan data shows that ING’s customer satisfaction rating among Australian home loan customers is 90%, followed by Bendigo Bank (86.9%) and Bankwest (81.6%). ING also has the highest level of customer satisfaction among non-home loan customers, at 92%, followed by Bendigo Bank (88.3%) and Suncorp (85.8%). The Big 4 banks were significantly behind the leaders; taking the Big 4 together, total non-home loan satisfaction is at its highest for over a year (77.8%), while home loan satisfaction is at a six-month high (71.1%). The findings come from the Roy Morgan Single Source survey, the world’s largest continuous source of consumer insights, derived from in-depth face-to-face interviews with over 50,000 Australians each year in their homes.

CORPORATES
ROY MORGAN LIMITED, ING BANK (AUSTRALIA) LIMITED, BENDIGO BANK, SUNCORP BANK

Squeeze on banks a risk to economy

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Original article by Jemima Whyte, Jonathan Shapiro, Aleks Vickovich, Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 4-Oct-19

The ANZ Bank’s chief economist Warren Hogan has rejected claims by Prime Minister Scott Morrison that the nation’s major banks are ‘profiteering’ by failing to pass on the latest official interest rate cut in full to their home loan customers. He says the banks are merely seeking to protect their margins. Meanwhile, the Australian Banking Association has stressed the importance of ‘strong, stable and profitable banks’ to economic growth and the free flow of credit.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF TECHNOLOGY, SYDNEY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, HYPERION ASSET MANAGEMENT LIMITED, UNISUPER LIMITED, IFM INVESTORS PTY LTD, EVANS AND PARTNERS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB