BANKS AND BANKING – AUSTRALIA

Savers under pressure as banks keep lowering rates

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Original article by Duncan Hughes
The Australian Financial Review – Page: 5 : 15-Jan-19

Analysis by Canstar shows that the average interest rate for a 12-month term deposit of $50,000 is now 2.55 per cent. Likewise, the average online savings interest rate is now just 1.35 per cent, compared with a peak of 7.3 per cent in 2008. In contrast, the cash rate is 1.5 per cent and Australia’s inflation rate is 1.9 per cent. Professor Richard Holden from the University of New South Wales warns that low interest rates will encourage more savers to seek higher-risk investment options such as shares.

CORPORATES
CANSTAR PTY LTD, UNIVERSITY OF NEW SOUTH WALES, SEMAPHORE PRIVATE PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, VIRGIN MONEY (AUSTRALIA) PTY LTD, BANK OF QUEENSLAND LIMITED – ASX BOQ

Banks’ big legal year to get busier amid Hayne fallout

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Original article by Misa Han
The Australian Financial Review – Page: 17 : 15-Jan-19

Westpac, National Australia Bank, AMP and IOOF Holdings are among the financial services groups that will be subject to legal action in 2019. Further legal action in the sector is expected in the wake of the financial services royal commission. Josh Mennen of law firm Maurice Blackburn has flagged mortgage lending practices as an area that could attract legal action. There are also indications that the Australian Securities & Investments Commission will be more willing to pursue legal action against banks in 2019.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP LIMITED – ASX AMP, IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, MAURICE BLACKBURN PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, SLATER AND GORDON LIMITED – ASX SGH, GILBERT AND TOBIN LAWYERS, HERBERT SMITH FREEHILLS PTY LTD, FEDERAL COURT OF AUSTRALIA, SUPREME COURT OF NEW SOUTH WALES, SWINBURNE UNIVERSITY OF TECHNOLOGY

Neobanks set for vault into future

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Original article by Richard Gluyas
The Australian – Page: 15 & 16 : 11-Jan-19

Australia’s traditional banks are set to face growing competition from purely digital banks. The majority of banks that have entered the domestic market in the last decade have been foreign owned, but local ‘neobanks’ are changing the status quo. Volt will seek a full banking licence after gaining a restricted licence in May 2018, and the digital bank aims to have a $3m mortgage loan book within three years. Xinja also recently secured a restricted licence, while 86400 is set for a public launch within three months.

CORPORATES
VOLT BANK LIMITED, XINJA BANK LIMITED, 86400 PTY LTD, CUSCAL, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, UP, MONZO, REVOLUT, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BARCLAYS BANK PLC

Banks could face another tough year

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Original article by Sarah Turner
The Australian Financial Review – Page: 17 : 10-Jan-19

The S&P/ASX 200 Banks Index shed 16.5 per cent in 2018, falling to its lowest level in five years. JCP Investment Partners is bearish about the outlook for the sector in 2019, warning that there is a 40-50 per cent chance of a banking crisis. However, Citigroup is more upbeat about the sector, and suggests that bank stocks may have been oversold.

CORPORATES
STANDARD AND POOR’S ASX 200 BANKS INDEX, JCP INVESTMENT PARTNERS LIMITED, CITIGROUP PTY LTD

Satisfaction with banks remains positive and above the long term average

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Original article by Roy Morgan
Market Research Update – Page: Online : 9-Jan-19

New results from Roy Morgan shows that customer satisfaction with Australia’s banks rose to 78.1% in the six months to November 2018, compared with 78.0% in the six months to October. This represents the first positive monthly move in satisfaction since prior to the start of the Finance Royal Commission in January. Satisfaction with banks remains above the long-term average of 74.3% calculated since 2001 and well up on the 58.7% in January 2001. Of the 10 largest consumer banks, ING with 88.8% satisfaction (up 3.6% points from January) and Bendigo Bank on 88.5% (up 0.1% point), were the only ones to show improvements in satisfaction during the Royal Commission. Westpac showed the biggest decline (down 5.5% points). The CBA retains its position of having the highest satisfaction among the big four with 76.7%, followed by NAB (74.6%), ANZ (74.3%) and Westpac (72.4%). Roy Morgan’s ‘Customer Satisfaction-Consumer Banking in Australia November Report’ is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including over 4,000 bank customers per month.

CORPORATES
ROY MORGAN LIMITED

Banks in GST war with ATO

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 2 : 8-Jan-19

The Australian Taxation Office wants to cut the amount of goods and services tax credits that banks and other financial institutions claim for providing home loans, credit cards and transactional accounts. Experts suggest that the ATO’s clampdown could cost each of the big banks between $60 million and $80 million a year, while bank executives acknowledge that it will be very difficult for them to pass on any higher tax costs to customers, given the current poor reputation of the banking sector.

CORPORATES
AUSTRALIAN TAXATION OFFICE, AUSTRALIAN BANKING ASSOCIATION

UBS, Macquarie top of the dealmaking charts

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 27 : 4-Jan-19

Data from Dealogic shows that UBS displaced Macquarie as Australia’s highest-earning investment bank in 2018, with revenue of $US219m. It was followed by Macquarie with revenue of $US146m and JP Morgan ($US108m). UBS was also the top revenue-earner in terms of mergers and acquisitions activity, handling some $US752m worth of deals in Australasia. JP Morgan generated the most revenue among investment banks globally, at $US6.9bn.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, JP MORGAN AUSTRALIA LIMITED, JP MORGAN AND COMPANY INCORPORATED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF CHINA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED, WESTPAC BANKING CORPORATION – ASX WBC, THE GOLDMAN SACHS GROUP INCORPORATED, MORGAN STANLEY AND COMPANY INCORPORATED, EVERCORE PARTNERS, MOELIS AND COMPANY, CENTERVIEW

Open loan books, banks told

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Original article by Michael Roddan
The Australian – Page: 1 & 4 : 3-Jan-19

The national dwelling price fell by 4.8 per cent in 2018, according to data from CoreLogic, with prices in Sydney and Melbourne falling by 8.9 per cent and seven per cent respectively. Federal Treasurer Josh Frydenberg says the nation’s banks must continue to provide home buyers with access to credit, adding that Labor’s proposed negative gearing reforms would deepen the downturn in the housing market. Meanwhile, Shane Oliver of AMP Capital expects house prices in Sydney and Melbourne to fall by another 10 per cent in 2019.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AMP CAPITAL INVESTORS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, FINDER.COM.AU, BANKWEST, WESTPAC BANKING CORPORATION – ASX WBC, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, BANK OF SOUTH AUSTRALIA LIMITED

Banks turn off the investor tap

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Original article by Joyce Moullakis
The Australian – Page: 13 & 18 : 3-Jan-19

Data from the Australian Prudential Regulation Authority shows that the nation’s four largest banks held $471.4bn worth of investor mortgage loans in the year to November 2018. This compares with $471.1bn for the same period in 2017. Westpac and National Australia Bank increased their investor loan books slightly, while the Commonwealth Bank and ANZ recorded declines. Meanwhile, Richard Wiles of Morgan Stanley says APRA’s recent move to abolish caps on interest-only loans is unlikely to boost the major banks’ growth in housing loans.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MORGAN STANLEY AUSTRALIA LIMITED, BANKWEST, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, MST FINANCIAL SERVICES PTY LTD, RESERVE BANK OF AUSTRALIA, COUNCIL OF FINANCIAL REGULATORS, CORELOGIC AUSTRALIA PTY LTD, P&N BANK, FINDER.COM.AU, MACQUARIE GROUP LIMITED – ASX MQG

Disclosing pay cuts scares off executives

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Original article by Ben Butler
The Australian – Page: 13 & 14 : 2-Jan-19

It has been revealed that ANZ Bank CEO Shayne Elliott warned that people may be deterred from taking up executive roles in the sector if banks are required to reveal the reasons why executives’ pay has been reduced. Elliott expressed concern about the issue in a letter to financial services royal commissioner Kenneth Hayne in early December. Elliott himself has had his remuneration reduced by $950,000 in the current financial year.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, IOOF HOLDINGS LIMITED – ASX IFL