BANKS AND BANKING – AUSTRALIA

Westpac and NAB lift rates on investors

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Original article by Michael Bennet
The Australian – Page: 1 & 6 : 6-Dec-16

National Australia Bank (NAB) and Westpac have raised their interest rates on loans to property investors. NAB’s new and existing investors will now pay 5.55 per cent on loans with variable rates. A rise of 15 basis points will take effect on 12 December 2016. The rate for owners-occupiers remains unchanged at 5.25 per cent. Westpac has lifted interest-only rates for investors and owner-occupiers by eight basis points.

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

Foreign banks fill lending void

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Original article by Scott Murdoch
The Australian – Page: 23 : 30-Nov-16

Data from the Australian Prudential Regulation Authority shows that the average mortgage balance has risen from $A244,000 in 2015 to $A255,000. However, the value of new home loans grew by only 0.1 per cent year-on-year in the September 2016 quarter. A recent move by Australia’s major banks to reduce their lending to residential developers has also seen the value of offshore banks’ lending to local developers rise from $A1.49bn to $A2.65bn in the last year. Meanwhile, data from the Housing Industry Association shows that sales of new detached homes and apartments fell by 8.2 per cent and 9.2 per cent respectively in October.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, HOUSING INDUSTRY ASSOCIATION LIMITED, MORNINGSTAR PTY LTD

Satisfaction with big four banks declines in October

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 29-Nov-16

A Roy Morgan Research Single Source survey has found that the satisfaction level of personal customers of Australia’s four major banks fell to 79.5% in October 2016, compared with 79.8% in September. This represents a 2.0% decline in satisfaction with the big four since May 2015, when it peaked at 81.5%. The main cause of this decline has been the big reduction in satisfaction among home loan customers, down 3.4% points to 75.8%, compared with a decline of only 0.9% to 80.4% for other customers. The CBA remains the big four market leader, with a customer satisfaction rating of 81.7% (down 0.3%), but NAB was the only one among the big four to record an increase in customer satisfaction (up 0.7% to 78.7%). Meanwhile, the mutual banking sector’s overall customer satisfaction was 91.0% in October, well above the big four’s average of 79.5%.

CORPORATES
ROY MORGAN RESEARCH LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, GREATER BANK LIMITED, VICTORIA TEACHERS MUTUAL BANK, BANK AUSTRALIA, TEACHERS MUTUAL BANK LIMITED, BENDIGO BANK, ING DIRECT

Rally in local bank shares won’t last: CLSA

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Original article by David Rogers
The Australian – Page: 30 : 25-Nov-16

The share prices of Australia’s four major banks have risen by an average of nearly seven per cent since Donald Trump’s presidential election win. However, Brian Johnson of CLSA does not expect this to be sustained, noting that local and international banks are facing a number of headwinds. He adds that Australian bank stocks are expensive compared with their overseas peers, while their common-equity tier-one capital must be increased by some $A27bn.

CORPORATES
CLSA AUSTRALIA PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

CBA pay revolt triggers first strike at AGM

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Original article by James Eyers, Julie-anne Sprague
The Australian Financial Review – Page: 2 : 10-Nov-16

At the Commonwealth Bank of Australia’s AGM in Perth on 9 November 2016, the bank received a "first strike" when 49 per cent of votes and proxies rejected the remuneration report. Shareholders objected to the introduction of performance measures that would be difficult to measure and quantify. The meeting was disrupted by environmentalists who chanted a slogan "Act on climate, CommBank can".

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, AUSTRALIAN YOUTH CLIMATE CHANGE COALITION LIMITED

Banks stare at low growth as pressures rise

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Original article by James Eyers
The Australian Financial Review – Page: 15 & 19 : 9-Nov-16

The combined cash earnings of Australia’s four major banks fell by 2.5 per cent in 2015-6, to $A29.6bn. They recorded net interest income growth of 5.5 per cent, to $A60.3bn, but non-interest income was down 3.1 per cent at $A23.5bn. Michael Rowland of KPMG says the banks are facing a number of headwinds, including the prospect of lower growth in revenue and return on equity, growing competition and an increase in regulatory costs.

CORPORATES
KPMG AUSTRALIA PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, PM CAPITAL LIMITED, ERNST AND YOUNG

Westpac returns hit by need to build capital

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Original article by James Eyers
The Australian Financial Review – Page: 11 & 15 : 8-Nov-16

Westpac has posted a 2015-16 cash profit of $A7.8bn. Its return on equity fell by 1.85 per cent to 14 per cent in the year to 30 September 2016, and its ROE target has been scaled back from 15 per cent to 13-14 per cent due to factors such as new capital requirements for the banking sector. PwC estimates that the combined ROE of the four major banks fell by 127 basis points to 13.75 per cent in 2015-16. Meanwhile, Westpac will seek to reduce its cost-to-income ratio from 42 per cent at present to less than 40 per cent

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, CITIGROUP PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, KPMG AUSTRALIA PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

ANZ shrinks to reduce rising risks

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Original article by James Eyers
The Australian Financial Review – Page: 1 : 4-Nov-16

The ANZ Bank has announced a fall of 18 per cent in cash profit to $A5.9 billion for 2015-16. Return on equity fell to 12.2 per cent, from 13.8 per cent a year ago. The cost to income ratio for the year declined to 44.8 per cent. ANZ CEO Shayne Elliott said the bank reduced its workforce by 3,600 jobs over the year to 30 September 2016. The stock rose 0.6 per cent to $A27.35 on 3 November 2016.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

ANZ’s Whelan will divest Asian bank stakes next

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Original article by Lisa Murray
The Australian Financial Review – Page: 13 & 17 : 2-Nov-16

The ANZ Bank will further scale back its presence in Asia after securing a deal to offload some of its retail banking and wealth management assets in the region. Mark Whelan, the head of institutional banking, says ANZ is making progress on selling some of its minority stakes in four Asian banks. He says these stakes are deemed to be non-core assets, but he stresses that ANZ is "reshaping" its Asian operations rather than withdrawing from the region. ANZ CEO Shayne Elliott has signalled that institutional banking will be the focus of its Asian operations.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, SHANGHAI RURAL COMMERCIAL BANK, BANK OF TIANJIN COMPANY LIMITED, PT BANK PAN INDONESIA TBK, AMMB HOLDINGS BHD, DBS BANK LIMITED

Banks on S&P negative watch over hot property

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 11 & 15 : 1-Nov-16

Factors such as rising household debt and residential property prices have prompted Standard & Poor’s to downgrade Australia’s economic risk trends. The firm has also downgraded the credit rating outlook of 25 local lenders to "negative". S&P downgraded the major banks’ rating outlooks to "negative" in mid-2016, but it has not yet made any further changes. However, their "AA-" credit ratings could be reviewed, particularly if Australia implements new global regulations regarding bank bailouts.

CORPORATES
STANDARD AND POOR’S CORPORATION, MACQUARIE BANK LIMITED – ASX MBL, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, RESERVE BANK OF AUSTRALIA