BANKS AND BANKING – AUSTRALIA

NAB narrows list of candidates for CEO

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Original article by Richard Gluyas
The Australian – Page: 20 : 3-May-19

National Australia Bank’s interim CEO Phil Chronican has indicated that the short-list of contenders to succeed Andrew Thorburn is "manageable". Mike Baird and Anthony Healy are widely regarded as the leading internal candidates for the role. Chronican will become chairman when a permanent CEO is appointed, and he says NAB has taken measures to ensure that his independence as chairman is not compromised due to his current role.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ROYAL BANK OF SCOTLAND GROUP PLC, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Look beyond bank shares to grow wealth: fund managers

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Original article by Lucas Baird
The Australian Financial Review – Page: 29 : 3-May-19

National Australia Bank reduced its interim dividend by 16 per cent on 2 May, but Andrew Martin of Alphinity Investment Management does not expect further dividend cuts in the banking sector. He adds that a credit crunch would be a key driver for any future dividend cuts. Prasad Patkar of Platypus Asset Management says the ‘golden era’ for Australian bank shares ended in the wake of the global financial crisis, rather than the Hayne royal commission, and investors should consider other investment options.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ALPHINITY INVESTMENT MANAGEMENT PTY LTD, PLATYPUS ASSET MANAGEMENT PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC

ANZ to cut $1bn in search of growth

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Original article by Joyce Moullakis
The Australian – Page: 17 & 22 : 2-May-19

The ANZ Bank has posted a 2018-19 interim cash profit of $3.56bn, which is two per cent higher than previously. The result for the six months to 31 March included provision for $175m worth of remediation charges. CEO Shayne Elliott has flagged further cost-cutting measures in coming years, although he has downplayed talk of further staff cuts and branch closures. Meanwhile, Elliott says the banking sector’s mortgage loan repayment buffer of 7.25 per cent should be revised, given that the cash rate is just 1.5 per cent at present.

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

Big four reap gains and reward contrarians

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Original article by David Rogers
The Australian – Page: 28 : 2-May-19

The S&P/ASX 200 Banks Index has gained nearly 15 per cent since late December, following a sell-off in the wake of the misconduct exposed by the Hayne royal commission. Tony Brennan of Citigroup says bank stocks still represent a buying opportunity for investors, even though the sector continues to face headwinds. Meanwhile, JP Morgan notes that banks’ revenue may come under pressure if the cash rate is reduced more than once in coming months.

CORPORATES
STANDARD AND POOR’S ASX 200 BANKS INDEX, STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, JP MORGAN AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, CREDIT SUISSE (AUSTRALIA) LIMITED

Westpac to take $753m earnings hit

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Original article by Richard Gluyas
The Australian – Page: 19 : 1-May-19

Westpac has advised that its 2018-19 interim cash profit will be marred by writedowns totalling $753m. The bank has increased its half-year provisions for customer remediation by $357m, to $617m in total. Westpac’s financial accounts will also include provisions totalling $136m in relation to the restructuring of its wealth division. Westpac will report its half-year results on 6 May. The ANZ Bank and National Australia Bank will also release their interim results in coming days.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BT FINANCIAL GROUP PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AMP LIMITED – ASX AMP, MACQUARIE GROUP LIMITED – ASX MQG, VIRIDIAN ADVISORY PTY LTD

McEwan’s RBS exit fuels NAB CEO talk

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Original article by Richard Gluyas
The Australian – Page: 17 & 20 : 26-Apr-19

There is growing speculation that Ross McEwan is a contender to succeed Andrew Thorburn as CEO of National Australia Bank, following his resignation as CEO of the Royal Bank of Scotland. McEwan has been CEO of RBS since 2013, and it has returned to profitability and reinstated dividends under his leadership. Mike Baird and Anthony Healy are widely seen as the leading internal candidates to replace Thorburn, who resigned in February.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ROYAL BANK OF SCOTLAND GROUP PLC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RUSSELL REYNOLDS ASSOCIATES INCORPORATED, MEDIBANK PRIVATE LIMITED – ASX MPL

Bank loan losses to reduce dividends

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Original article by Richard Gluyas
The Australian – Page: 21 : 24-Apr-19

Citigroup has downplayed investors’ concerns about the high dividend payout ratios of Australia’ major banks. Brendan Sproule of Citigroup says banks are likely to absorb one-off costs rather than reduce their payout ratios. Instead, a sharp increase in loan losses is seen to be the main threat to continued high dividend ratios. Sproules adds that the Reserve Bank of New Zealand’s review of its bank capital framework is unlikely to impact on Australia’s major banks.

CORPORATES
CITIGROUP PTY LTD, BELL POTTER SECURITIES LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF NEW ZEALAND

CBA underpays 8000 staff after HR tech system failure

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Original article by James Eyers
The Australian Financial Review – Page: 18 : 17-Apr-19

The Commonwealth Bank of Australia has advised that current and former employees have received some $4.8m in back pay to date, including interest. Problems with the bank’s human resources technology systems resulted in about 8,000 employees being underpaid. Julia Angrisano, the national secretary of the Finance Sector Union, says the bank and its Bankwest subsidiary may ultimately have to repay between $10m and $15m, although CBA believes that the final figure will be much lower. Some employees are also believed to have been paid at below-award rates.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BANKWEST, FINANCE SECTOR UNION

AMP’s reputation hit harder than big banks

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Original article by Jessica Gardner
The Australian Financial Review – Page: 16 : 16-Apr-19

The rankings of the four major banks and AMP have fallen sharply in the latest corporate reputation index, which is compiled by the Reputation Institute. AMP has fallen 18 places in the annual index, and now ranks last in the list of 60 companies. Oliver Freedman of the Reputation Institute notes that AMP’s corporate reputation has not improved since the Hayne royal commission exposed misconduct at the financial services group in 2018. He adds that AMP and the banks must work harder to restore their reputations.

CORPORATES
AMP LIMITED – ASX AMP, 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, REPUTATION INSTITUTE PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WOOLWORTHS GROUP LIMITED – ASX WOW

S&P concerned big banks may lose support in a crisis

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Original article by James Eyers
The Australian Financial Review – Page: 15 & 20 : 10-Apr-19

A report from S&P Global Ratings says the federal government is likely to remain "highly supportive" of Australia’s major banks in the event of a crisis. However, the ratings agency adds that there is a one-in-three chance that the government will change its position to "supportive" over the next two years. Any change in the government’s level of support for the major banks would most likely prompt their credit ratings to be downgraded, which in turn would increase their funding costs.

CORPORATES
S&P GLOBAL RATINGS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COUNCIL OF FINANCIAL REGULATORS