BANKS AND BANKING – AUSTRALIA

Banks urged to slash branches to offset rising costs

roymorgansocial Leave a comment

Original article by Richard Gluyas
The Australian – Page: 19 : 8-Oct-18

Morgan Stanley argues that Australia’s major banks could generate significant savings by closing bank branches and placing greater emphasis on mobile banking. This is one of four scenarios outlined in a new report; however, Morgan Stanley notes that banks are unlikely to significantly reduce the cost of their networks in the next year, given that the sector is under scrutiny at present. Morgan Stanley adds that the major banks could potentially generate large savings by reviewing their multibrand strategies.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

CBA the most popular bank with wealthiest 10% of Australians

roymorgansocial Leave a comment

Original article by Roy Morgan
Market Research Update – Page: Online : 8-Oct-18

New research from Roy Morgan shows that the CBA is the clear leader when it comes to banks used by the wealthiest 10% (top decile) of the population, with more than a third (36.7%) being customers. This segment is particularly significant as identified in the "Roy Morgan Wealth Report", which shows that the top decile accounts for 48.3% of Australian households’ net wealth. The big four dominate when it comes to the banks used by the wealthiest 10% of Australians. Individuals in this important segment generally deal with more than one bank, but the banks with the highest penetration are CBA (36.7%), Westpac (25.7%), ANZ (23.7%) and NAB (22.5%). A number of smaller banks have much higher customer penetration in this segment compared to what they have in the total population, including St George (11.3%), ING (7.6%), Macquarie (4.9%) and Citibank (3.9%). These are the latest results from Roy Morgan’s Single Source survey, which is based on in-depth personal interviews conducted face-to-face with over 50,000 Australians per annum in their own homes, including over 5,000 of the wealthiest 10%.

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

Bank cross-selling less successful than widely believed

roymorgansocial Leave a comment

Original article by Roy Morgan
Market Research Update – Page: Online : 8-Oct-18

Australian banks’ over-reliance on cross-selling to boost revenue may have been over-stated, according to the latest "share of wallet" data published in the Roy Morgan Banking & Finance Industry Currency Report. The report found that most major banks’ "share of customer wallet" has declined over the past four years, with National Australia Bank Group slipping 3.7 percentage points to 29.5%, CBA losing 2.6 percentage points to sit at 31%, ANZ Group sliding 1.1 percentage points to 27.7% and Westpac down 0.9 percentage points to 28.3%. While there is no doubt the Royal Commission has exposed serious problems in the selling practices of banks, the share of wallet trend highlights increased competition across a number of product categories. The Banking and Finance Industry Currency Report is compiled using data from more than 250,000 in-depth face-to-face, in-home interviews.

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

Trust gap will crank up bank funding costs

roymorgansocial Leave a comment

Original article by Jonathan Shapiro
The Australian Financial Review – Page: 17 & 20 : 4-Oct-18

Fitch Ratings has warned that a loss of trust in Australian banks in the wake of the financial services royal commission may result in higher wholesale funding costs. Fitch adds that banks may find it hard to pass the increased costs on to borrowers in the current climate. The credit ratings agency also notes that banks could potentially face increased compliance costs and a greater risk of class actions as a result of any recommendations made by the inquiry in its final report. Fitch has retained its negative outlook on banks.

CORPORATES
FITCH RATINGS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, S&P GLOBAL RATINGS, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLSA AUSTRALIA PTY LTD

Hayne to lift lid on bank confessions

roymorgansocial Leave a comment

Original article by Richard Gluyas
The Australian – Page: 19 & 23 : 3-Oct-18

The financial services royal commission has selectively released information on the admissions of misconduct by the major banks. Commissioner Kenneth Hayne requested the information in early 2018, and a spokesman for the inquiry has downplayed suggestions that it may shortly release the banks’ full submissions. Industry sources have indicated that the potential for class actions against the banks will increase if the so-called "confession statements" are fully disclosed.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AMP LIMITED – ASX AMP, CLAYTON UTZ, FEDERAL COURT OF AUSTRALIA

S&P pushes banks down global ranks

roymorgansocial Leave a comment

Original article by Jonathan Shapiro
The Australian Financial Review – Page: 1 & 16 : 3-Oct-18

The global ranking of Australia’s major banks has fallen sharply in terms of risk adjusted capital, which is S&P Global Ratings’ preferred measure of the sector’s financial strength. The nation’s four largest banks are ranked in the 40th to 50th percentile in S&P’s latest survey of the world’s top 100 banks. The Financial System Inquiry in 2014 had recommend that the big four banks should be within the top quartile of global banks in terms of capital strength. Regaining "unquestionably strong" status would require them to raise more capital.

CORPORATES
S&P GLOBAL RATINGS, CITIGROUP PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Banks’ legal bills in mega millions

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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