BANKS AND BANKING – AUSTRALIA

APRA targets banker bonuses

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: W1 & W2 : 5-Apr-18

A review of remuneration in the banking, insurance and superannuation industry shows that senior executives are rarely penalised financially for poor risk management practices or misconduct among staff within their purview. Wayne Byers, the chairman of the Australian Prudential Regulation Authority – which undertook the review – says bank executives should be held more accountable, calling for their bonuses to be deferred or forgone. Frank Mirenzi of Moody’s Investors Service notes that many countries have cracked down on executive pay in the banking sector in the wake of the global financial crisis.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC

CBA captured 40pc of Aussie mortgages

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Original article by James Frost
The Australian Financial Review – Page: 17 : 4-Apr-18

Data supplied to the banking royal commission shows that a significant proportion of home loans sold by Aussie Home Loans in 2015 were those offered by its parent company, the Commonwealth Bank of Australia. Up to 39.7 per cent of the mortgages that Aussie Home Loans sold by volume in 2015 were from brands owned by the bank, including Bankwest and Aussie Select. Likewise, 37.5 per cent of mortgage loans sold by value were from CBA-owned brands. A key issue for the royal commission has been whether mortgage brokers are acting in the interests of their customers or the banks.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSSIE HOME LOANS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANK OF WESTERN AUSTRALIA LIMITED, AUSSIE SELECT

Hirst calls for fair play at the top

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Original article by James Frost
The Australian Financial Review – Page: 15 & 18 : 27-Mar-18

Bendigo & Adelaide Bank veteran Marnie Baker will replace outgoing CEO Mike Hirst on 2 July. Baker is currently the chief customer officer, and she has held a number of roles at the regional bank since joining it in 1989. She says Bendigo’s focus on trust and fairness is a key strength given the negative sentiment toward the banking sector in general at present. Meanwhile, Hirst has criticised regulators over the lack of a level playing field for smaller banks, arguing that it has hindered Bendigo’s growth.

CORPORATES
BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

New CBA chief executes purge of the Narev executive old guard

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 18 : 27-Mar-18

The Commonwealth Bank has made further changes to its executive team as it transitions from Ian Narev to new CEO Matt Comyn. Kelly Bayer Rosmarin, Melanie Laing and David Whiteing are the latest senior executives to depart in the wake of Austrac’s money-laundering investigation. Alphinity Investment Management’s Andrew Martin says some management changes were inevitable, and the shake-up will allow Comyn to start with a clean slate. Bayer Rosmarin had been a contender to succeed Narev.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, ALPHINITY INVESTMENT MANAGEMENT PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AMP LIMITED – ASX AMP, UNIVERSITY OF NEW SOUTH WALES

Credit card debt to take 138 years to pay

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Original article by James Frost
The Australian Financial Review – Page: 9 : 23-Mar-18

Commonwealth Bank executive Clive van Horen has conceded that the bank erred in the case of problem gambler David Harris. Harris has told a public hearing of the banking royal commission how the bank had continued to give him credit cards and had extended his credit limit even though he had admitted to being a problem gambler. Van Horen told the commission that the bank has since tightened its rules in relation to giving credit to customers who appear to have gambling problems.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Jobs cool RBA’s outlook on rates

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Original article by David Rogers
The Australian – Page: 19 & 30 : 23-Mar-18

The Australian dollar fell in local trading on 22 March in response to data showing that the number of jobs created in February was below expectations at 17,500. Australia’s unemployment rate rose from 5.5 per cent to 5.6 per cent during the month, while the labour participation rate also increased. Economists suggest that the jobs data means the Reserve Bank is unlikely to increase official interest rates in the near-term. Meanwhile, the strength of the US economy has prompted the Federal Reserve to flag three interest rates rises in 2019, in addition to another two in 2018.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, UBS HOLDINGS PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CAPITAL ECONOMICS LIMITED

US Fed set to rise further above RBA

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 32 : 23-Mar-18

The yield on US 10-year bonds has eased to 2.86 per cent in response to the Federal Reserve’s move to increase interest rates to 1.75 per cent. Kapstream Capital’s Steve Goldman expects the central bank to increase US rates to 2.5 per cent, adding that this is more likely to be in 2019 rather than 2018. The US federal funds rate is now higher than Australia’s cash rate for the first time since 2000. The interest rate differential is expected to widen, as the Federal Reserve has flagged further rate rises in 2018 and 2019. Most analysts do not expect the Reserve Bank to do so until at least the March 2019 quarter.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, KAPSTREAM CAPITAL PTY LTD, NOMURA AUSTRALIA LIMITED, UBS GLOBAL ASSET MANAGEMENT (AUSTRALIA) LIMITED

CBA reels from credit card bungle

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Original article by James Frost
The Australian Financial Review – Page: 1 & 4 : 20-Mar-18

The banking royal commission has been told that the Commonwealth Bank kept back certain information regarding its credit card plus product from the Australian Securities & Investments Commission. ANZ executive William Ranken has also told the royal commission that the bank did not examine the expenses of every prospective mortgage customer, but instead made use of the household expenditure measure benchmark.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMINSURE

Comyn pledges to fix commission problems

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Original article by James Thomson
The Australian Financial Review – Page: 17 : 19-Mar-18

Incoming Commonwealth Bank of Australia CEO Matt Comyn has alerted staff in its retail division that the week beginning 19 March could be uncomfortable for them. He says that submissions made to the banking royal commission during the coming week may include examples of where the CBA treated customers poorly. Cormyn, who will take over from Ian Narev in April, has given a commitment to fix any problems that the royal commission may unearth.

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

Mortgage customer satisfaction higher when deal directly with bank

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Original article by Roy Morgan
Market Research Update – Page: Online : 19-Mar-18

A Roy Morgan Single Source survey, which was carried out in the six months to January 2018, has found that home loan customers’ satisfaction with banks when using a mortgage broker was only 77.3%. This compares to 80.3% when home loans were obtained in person at a branch. Even among more recent home loans (held for under six years) satisfaction with going directly into a branch was 81.7%, compared to 78.7% for mortgage brokers. Home loan customers of Bendigo Bank who obtained their loan in person at a branch had the highest satisfaction with 92.6%, followed by Bankwest (87.3%) and St George (86.8%). The best of the big four was NAB with 82.4%, followed by ANZ (79.7%). All of the largest banks, with the exception of Westpac, had higher satisfaction when going direct rather than using mortgage brokers. Meanwhile, satisfaction when using mortgage brokers was highest for St George with 85.6%, Bankwest (82.1%) and Suncorp Bank (82.0%). Each of the big four were below the market average (77.3%) for home loan customer satisfaction when using a mortgage broker, with the best of them being NAB (76.4%) and Westpac (75.7%).

CORPORATES
ROY MORGAN LIMITED, BENDIGO BANK, BANK OF WESTERN AUSTRALIA LIMITED, ST GEORGE BANK LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, SUNCORP BANK