BANKS AND BANKING – AUSTRALIA

Banks’ legal bills in mega millions

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Original article by Misa Han, Joanna Mather
The Australian Financial Review – Page: 10 : 28-Sep-18

Australia’s four major banks have incurred significant costs associated with the financial services royal commission. Westpac’s costs in the first half of 2018 were around $34m, and it expects its costs to be similar in the second half, while National Australia Bank has advised that its inquiry-related costs could rise to $30m in the second half, up from $10m in the first half. Meanwhile, law firms will miss out on a key source of revenue, as the royal commission’s own legal work is being handled by the Australian Government Solicitor.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, 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, AMP LIMITED – ASX AMP, IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIAN GOVERNMENT SOLICITOR, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, CORRS CHAMBERS WESTGARTH, JOHNSON WINTER AND SLATTERY

Satisfaction with banks declines during Finance Royal Commission but remains positive

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Sep-18

New research from Roy Morgan shows that bank customer satisfaction has declined from 81.2% in the six months to January 2018, prior to the Finance Royal Commission, to 78.9% in the six months to August 2018, which is unchanged from July. The decline of 2.3% points since January has resulted in the lowest satisfaction rating since June 2012, but it remains above the long-term average of 74.2%. Meanwhile, the level of dissatisfaction with banks is low and has increased only marginally from 4.9% in January to 5.7%. The combination of the 15.4% of bank customers who are indifferent to their relationship with their bank (i.e. neither satisfied or dissatisfied) and those who are dissatisfied (5.7%), means that more than one in five (21.1%) bank customers pose a potential threat to customer retention, up from 18.9% in January 2018 but well below the 2001 level of 40.1%. Roy Morgan’s "Customer Satisfaction-Consumer Banking in Australia August 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

ASIC blasts banks over breaches

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Original article by James Frost, Misa Han
The Australian Financial Review – Page: 1 & 2 : 26-Sep-18

A report from the Australian Securities and Investments Commission has criticised the length of time banks take to provide customers with a refund for misconduct. ASIC found that on average it takes banks more than five years to repay customers, while they also take an inappropriate amount of time to investigate and report breaches to the corporate regulator. ASIC has proposed much harsher civil and criminal penalties for misconduct in the financial services industry.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AMP LIMITED – ASX AMP, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, CREDIT UNION AUSTRALIA LIMITED, GREATER BANK LIMITED, HERITAGE BANK LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN BANKERS’ ASSOCIATION, FINANCIAL SERVICES COUNCIL

Big banks’ systems not ready for open banking: APRA

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Original article by James Eyers
The Australian Financial Review – Page: 2 : 25-Sep-18

Australian Prudential Regulation Authority chairman Wayne Byres has called on banks to spend more on their IT systems. He says a lack of expenditure on IT has left banks under-prepared for new open banking and credit reporting requirements, while consumer trust in banks will be eroded if their systems continue to suffer from outages. Byres also says it is hard to forecast what impact changes to technology will have on the banking sector.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FINTECH AUSTRALIA PTY LTD

ME boss tips two years of house price weakness

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Original article by James Frost
The Australian Financial Review – Page: 17 : 25-Sep-18

ME Bank has reported a statutory net profit of $89.1m, which is 43.9 per cent higher than previously, while its underlying earnings rose 13 per cent to $96.5m. CEO Jamie McPhee does not expect a significant fall in house prices, although he says prices are likely to ease slightly over the next two years. McPhee adds that the revelations of the banking royal commission do not appear to have had much impact on ME Bank’s customer numbers and deposit inflows.

CORPORATES
ME BANK, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Thorburn faces $1m pay cut in NAB overhaul

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Original article by James Eyers
The Australian Financial Review – Page: 17 & 20 : 20-Sep-18

National Australia Bank will disclose more details of its revised executive pay structure when its annual remuneration report is released in November. Amongst other things, NAB will no longer take into account total shareholder return when determining executive bonuses, although return on equity will continue to be a key metric. NAB chairman Ken Henry says the new pay scheme is aimed at more closely aligning executive remuneration to customer service. CEO Andrew Thorburn is among the executives to be affected by the new remuneration policy.

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

Westpac slashes new borrower rates

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Original article by Duncan Hughes
The Australian Financial Review – Page: 21 : 20-Sep-18

Westpac will increase its standard variable mortgage interest rates for existing customers by 14 basis points on 20 September, with several of its major rivals to lift their rates in coming weeks. However, Westpac will also target new home loan customers, offering rate cuts of up to 110 basis points for the first five years. Customers will then be offered a discount of 80 basis points for the life of their loan. National Australia Bank has yet to announce any changes to its interest rates for existing customers.

CORPORATES
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, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED

Cost of home loan less than 2017: RBA

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Original article by James Glynn
The Australian – Page: 22 : 19-Sep-18

A number of Australian lender have increased their mortgage interest rates since the Reserve Bank’s last board meeting on 4 September. However, the minutes of the meeting note that the cost of financing a home loan remains lower than at the same time in 2017. The Reserve Bank also observed that bank funding costs are still low by historical standards. In addition, the Reserve Bank gave indications that the next movement in the cash rate is likely to be upward, although this is not expected in the near-term.

CORPORATES
RESERVE BANK OF AUSTRALIA

Hagger NAB exit opens way for Baird

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 18 : 18-Sep-18

National Australia Bank has appointed former New South Wales premier Mike Baird as chief customer officer of consumer banking, after Andrew Hagger resigned as the head of consumer banking and wealth. Hagger said he will accept responsibility for the fee-for-no-service scandal that was exposed by the banking royal commission, and fund managers say his position had become untenable following the revelations. Baird, who is currently NAB’s head of corporate and institutional banking, is now regarded as a leading contender to eventually succeed CEO Andrew Thorburn.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WILSON ASSET MANAGEMENT, ALPHINITY CONCENTRATED AUSTRALIAN SHARE FUND, PERPETUAL LIMITED – ASX PPT, AMP LIMITED – ASX AMP, AUSTRALIAN GREENS, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF NEW ZEALAND, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLAYTON UTZ

ASIC accuses NAB of $100m super rip-off

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Original article by Ben Butler, Michael Roddan
The Australian – Page: Online : 7-Sep-18

The Australian Securities & Investments Commission has launched legal action against National Australia Bank over the fee-for-no-service scandal. ASIC claimed in a suit filed with the Federal Court on 6 September that NAB had breached the law on 77 occasions, and that it had "ripped off" over 500,000 unwitting superannuation fund members to the tune of more than $100 million. ASIC claimed NAB’s actions had undermined confidence in the superannuation system, while NAB faces fines of up to $37.5 million.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, FEDERAL CIRCUIT COURT OF AUSTRALIA