BANKS AND BANKING – AUSTRALIA

Regulating profits ‘dangerous’

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Original article by James Eyers, Joanna Mather
The Australian Financial Review – Page: 1 & 8 : 5-Oct-16

Commonwealth Bank CEO Ian Narev fronted a parliamentary committee on 4 October 2016, where he responded to questions on issues such as profits, interest rates and the bank’s insurance and financial planning scandals. Narev cautioned against any move to regulate the profits of the banking sector, stressing that banks need healthy profits to ensure that they can ride out economic shocks. The CEOs of the other major banks will appear before the committee in coming days. The Australian Labor Party continues to argue the case for a royal commission into the banking sector.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, FINANCE AND PUBLIC ADMINISTRATION, AUSTRALIAN LABOR PARTY, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH FINANCIAL PLANNING LIMITED, COMMINSURE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, LIBERAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

Banks get short shrift from investors

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Original article by Chris Kohler
The Australian – Page: 20 : 4-Oct-16

Australian banks continued to be targeted by short sellers in September 2016. Data from Deutsche Bank shows that the ANZ Bank and Westpac are the most popular among short sellers, with short positions accounting for 1.9 per cent of their issued stock, compared with 1.5 per cent for the Commonwealth Bank and one per cent for National Australia Bank. Meanwhile, Credit Suisse recently suggested that the major banks’ elevated dividend yields may eventually face downward pressure.

CORPORATES
DEUTSCHE BANK AG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CREDIT SUISSE (AUSTRALIA) LIMITED, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, STANDARD AND POOR’S ASX 200 INDEX

ASIC slaps ex-Deutsche trader with lifetime ban for $50m fraud

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Original article by Sally Rose
The Australian Financial Review – Page: 13 : 30-Sep-16

The Australian Securities & Investments Commission (ASIC) has imposed a lifetime ban on providing financial services on former Deutsche Bank trader Andrew Donaldson. ASIC found that Donaldson made "false entries" in order to cover his losses in 2013 and 2014. He was at that time employed as a foreign exchange options and futures trader at the bank.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, DEUTSCHE BANK AG, ABBEY LIFE, UNITED STATES. DEPT OF JUSTICE

‘Most obvious bubble on planet’

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Original article by Geoff Winestock, Su-Lin Tan
The Australian Financial Review – Page: 12 : 30-Sep-16

The Reserve Bank of New Zealand has warned about a correction in property prices. A sharp fall in prices is likely to occur because of a high level of household debt, at 163 per cent of disposable income, and an excessive exposure of NZ banks to housing. Mortgage loans constitute around 55 per cent of the banks’ total assets. In Australia, the household debt exceeds 180 per cent of disposable income and mortgages make up 62 per cent of the banks’ assets.

CORPORATES
RESERVE BANK OF NEW ZEALAND, RESERVE BANK OF AUSTRALIA, MARKET ECONOMICS PTY LTD

NAB pays out $6.5m for poor advice

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Original article by Michael Roddan
The Australian – Page: 23 : 29-Sep-16

National Australia Bank has revealed that it paid $A6.5 million in compensation to customers who received poor financial advice over the past 18 months. NAB’s head of consumer banking and wealth management, Andrew Hagger, said a significant investment had been made in the bank’s complaints resolution system. The Commonwealth Bank has stated that a third of its compensation scheme was completed in June 2016.

CORPORATES
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, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Labor says bank profits are too high

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Original article by Joanna Mather, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 2 : 27-Sep-16

The profits of Australia’s four major banks will come under scrutiny when their CEOs front a parliamentary committee in early October 2016. Pat Conroy, an Australian Labor Party member of the committee, will seek an explanation for the banks’ high return on equity compared with their international peers. He notes that there has not been an influx of foreign banks despite the local industry’s high level of profitability. Labor and the Greens favour a royal commission into the banking sector.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, FINANCE AND PUBLIC ADMINISTRATION, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Satisfaction with banks improves marginally in August

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 27-Sep-16

A Roy Morgan Research Single Source survey has found that the satisfaction level of personal customers of Australian banks rose to 81.6 per cent in the six months to August 2016, compared with 81.5 per cent in July. This is well above the long-term average and is just below the 20-year high of 82.9 per cent recorded in 2015. Meanwhile, the satisfaction level of the personal customers of the four major banks was unchanged at 79.7 per cent. The Commonwealth Bank continued to have the highest customer satisfaction rating of the four major banks, at 81.4 per cent, followed by the ANZ Bank (79.9 per cent). Outside of the big four banks, Greater Bank (95.2 per cent had the highest level of customer satisfaction, ahead of Bank Australia (94.8 per cent).

CORPORATES
ROY MORGAN RESEARCH 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, GREATER BANK LIMITED, BANK AUSTRALIA, VICTORIA TEACHERS MUTUAL BANK, TEACHERS MUTUAL BANK LIMITED, HERITAGE BANK LIMITED – ASX HBS, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO BANK, BANK OF WESTERN AUSTRALIA LIMITED, SUNCORP BANK, ING DIRECT

Shareholders blast CBA CEO’s diversity bonus

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Original article by Patrick Durkin, Matthew Cranston
The Australian Financial Review – Page: 6 : 27-Sep-16

The Commonwealth Bank of Australia has been criticised for adding new targets to its bonus plan. The Australian Shareholders’ Association is concerned that CBA executives will now be rewarded for meeting targets that are unrelated to performance, following the introduction of a 25 per cent target for "diversity, inclusion, sustainability and culture". The bank’s existing 25 per cent bonus for "customer satisfaction" is also controversial. CEO Ian Narev’s remuneration for 2015-16 comprised a base salary of $A8.77 million and performance-linked bonuses of $A3.53 million.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, AGL ENERGY LIMITED – ASX AGL, TELSTRA CORPORATION LIMITED – ASX TLS, WOOLWORTHS LIMITED – ASX WOW, INVESTA OFFICE FUND – ASX IOF, ISS – INTERNATIONAL SERVICE SOLUTIONS A/S

Old lenders losing battle for hearts and minds

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Original article by Michael Bennet
The Australian – Page: 23 : 22-Sep-16

The 2016 global consumer banking survey of professional services firm Ernst & Young shows that just 21 per cent of Australians completely trust that they will receive unbiased advice from their bank. The survey also found that 36 per cent of bank customers have complete trust in their financial institution, compared with 44 per cent of non-bank customers. Meanwhile, 37 per cent of Australian respondents do not consider the products of rival financial providers to be significantly different.

CORPORATES
ERNST AND YOUNG, PRICEWATERHOUSECOOPERS, MACQUARIE GROUP LIMITED – ASX MQG

Narev seeks spirit of ’91 reform

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 14-Sep-16

Commonwealth Bank of Australia CEO Ian Narev has used the 25th anniversary of the banking major’s sharemarket float to call for reforms that will promote long-term economic growth. He says the government of the day made the right decision in selling a publicly-owned bank. CBA shares have fallen by more than 10 per cent in recent weeks, with the stock closing at $A69.50 on 13 September 2016. However, investors paid just $A5.40 per share in the 1991 float.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BELL POTTER SECURITIES LIMITED