BANKS AND BANKING – AUSTRALIA

Bank pay backlash to hit pair

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Original article by Patrick Durkin
The Australian Financial Review – Page: 14 & 16 : 4-Dec-18

The Australian Shareholders’ Association has urged investors to vote against the re-election of Craig Dunn as a director of Westpac at its upcoming AGM, as has proxy adviser CGI Glass Lewis. Both have concerns about his role as the former CEO of AMP and his chairmanship of Westpac’s remuneration committee. CGI has also recommended that Paula Dwyer not be re-elected as a director of the ANZ Bank at its AGM, while fellow proxy firm ISS also has concerns about Dwyer’s re-election. Australia’s AGM season has been quite turbulent so far, with a number of directors recording a significant percentage of votes against their re-election.

CORPORATES
AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, CGI GLASS LEWIS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, APA GROUP – ASX APA, COMPUTERSHARE LIMITED – ASX CPU, JAPARA HEALTHCARE LIMITED – ASX JHC, MYER HOLDINGS LIMITED – ASX MYR, AMP LIMITED – ASX AMP, RAMSAY HEALTH CARE LIMITED – ASX RHC, TABCORP HOLDINGS LIMITED – ASX TAH, HEALTHSCOPE LIMITED – ASX HSO, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED

1.3 million Australians considering opening new bank accounts in next 6 months

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Original article by Roy Morgan
Market Research Update – Page: Online : 4-Dec-18

A Roy Morgan Single Source survey, which was undertaken in the 12 months to October 2018, shows that 1.3 million Australians aged 14+ (6.4%) are considering opening a new bank account in the next six months. This compares with 1.31 million in the year to October 2017. Some 341,000 Australians (26.3%) who are considering opening a new account in the next six months say that they are likely to do so with the CBA. The ANZ is in second place with 188,000 (14.5%), followed by Westpac (152,000) and NAB (125,000). Among the banks outside of the big four, ING is the best performer with 86,000, followed by Bendigo Bank with 66,000. The Single Source survey is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including over 2,500 with people who are considering opening a new bank account.

CORPORATES
ROY MORGAN LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ING BANK (AUSTRALIA) LIMITED, BENDIGO BANK

Big decline in usage of bank branches

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Original article by Roy Morgan
Market Research Update – Page: Online : 3-Dec-18

A Roy Morgan Single Source shows that 4.73 million Australians aged 14+ used bank branches in an average four-week period in the six months to October 2018. This compares with 6.50 million for the same period in 2014 (down 27.2%). The survey also shows that 9.18 million Australians (44.7%) used mobile banking in an average four weeks in October 2018, compared with just 5.66 million (29.3%) in October 2014. Internet banking using a website remains the most popular banking channel at 47.1%, but it has declined from 52.3% in 2014 and on current trends looks like being surpassed by mobile banking within a year or two. Phone banking is also declining and is now down to 13.6%, from 16.1% in 2014. Meanwhile, bank branches still play an important role among older customers, with 38.1% of pre-boomers and 29.8% of baby boomers using them over an average four-week period. These are the only two generations where branches are still preferred to mobile banking. The Single Source survey is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes.

CORPORATES
ROY MORGAN LIMITED

ANZ staff morale low amid overhaul

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Original article by Ben Butler, Joyce Moullakis
The Australian – Page: 23 : 30-Nov-18

ANZ Bank CEO Shayne Elliott has told the financial services royal commission that the bank’s staff must feel free to speak up about governance issues. The inquiry has been presented with the results of a survey which found that morale at ANZ has declined. Amongst other things, the proportion of employees who said they feel able to raise issues and concerns without fear of negative consequences has fallen by three per cent since 2016 to 67 per cent. Likewise, the proportion of employees who stated that they rarely look for another job has fallen from 63 per cent to 56 per cent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

ANZ compo for millions of accounts

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Original article by Ben Butler, Joyce Moullakis
The Australian – Page: 17 & 21 : 29-Nov-18

ANZ Bank CEO Shayne Elliott has conceded that it has taken far too long for the bank to compensate customers for losses incurred as a result of misconduct. Elliott has told the financial services royal commission that its remediation program is likely to embrace about two million accounts. However, he notes that some customers might have multiple account that qualify for compensation. Elliott also suggested that many of the governance issues at ANZ can be attributed to its business model under predecessor Mike Smith.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AMP LIMITED – ASX AMP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ONEPATH AUSTRALIA LIMITED, IOOF HOLDINGS LIMITED – ASX IFL

Henry: NAB board was too soft

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Original article by James Frost, James Eyers
The Australian Financial Review – Page: 9 : 28-Nov-18

National Australia Bank’s chairman Ken Henry appeared before the financial services royal commission again on 27 November. He told the inquiry that NAB’s "toxic" relationship with the Australian Securities & Investments Commission had affected the bank’s ability to compensate customers in a timely manner for losses incurred as a result of misconduct. He also conceded that NAB’s board could have done more to compel the bank’s executives to seek improved relations with ASIC.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

NAB chief warns: culture fix may be a decade away

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Original article by Joyce Moullakis
The Australian – Page: 2 : 27-Nov-18

National Australia Bank’s chairman Ken Henry has conceded that it could take up to 10 years to address issues with the bank’s culture that have been exposed by the financial services royal commission. He has told the inquiry that NAB has had the lowest compliance risk rating for all but one month in the seven years that he has been its board. Henry also said that it is more appropriate for the Australian Prudential Regulation Authority to have oversight of the banking sector’s culture than the Australian Securities & Investments Commission.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Satisfaction with banks declines further in October

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Nov-18

New results from Roy Morgan shows that customer satisfaction with Australia’s banks fell to 78.0% in the six months to October 2018, compared with 78.5% in the six months to September. Satisfaction with banks was 81.2% in the six months to January 2018, prior to the Finance Royal Commission. The decline of 3.2% since January has resulted in the lowest satisfaction with banks in seven years, although it remains above the long-term average and is much higher than the 58.7% recorded in 2001. Satisfaction with the four major banks has fallen to 75.0%, down from 79.2% in the six months to January. However, satisfaction among customers of other banks has declined by only 1% over the same period, leaving them with an overall customer satisfaction rating of 83.9%. Roy Morgan’s "Customer Satisfaction-Consumer Banking in Australia October Report" is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes.

CORPORATES
ROY MORGAN LIMITED

Moore claims Macquarie pay model is better than the majors

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Original article by Joyce Moullakis
The Australian – Page: 24 : 23-Nov-18

Macquarie Group CEO Nicholas Moore has told the banking royal commission that its remuneration model is superior to those used by Australia’s major banks. Moore said its model provides more accountability, and that profit share is more powerful than bonuses. Commenting on the issue of the commissions paid to mortgage brokers, Moore said he would be reluctant to see them abolish and replaced with a flat fee, as consumers might be reluctant to pay the latter.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, KPMG AUSTRALIA PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Trust key to Australian economy: RBA boss

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Original article by Marnie Banger
News.com.au – Page: Online : 21-Nov-18

Reserve Bank governor Philip Lowe has stressed the importance of trust to the Australian economy and society. Lowe noted that the level of trust in banks has been damaged by the revelations of the financial services royal commission; he added that to restore trust, banks must take action of resolve conflict of interest issues, abolish poorly-designed incentive systems and ensure that there is accountability for misconduct. Lowe also said consumers need to be able to trust that their living standards will improve over time. In recent years, wages have increased in line with the inflation rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMITTEE FOR ECONOMIC DEVELOPMENT OF AUSTRALIA