BANKS AND BANKING – AUSTRALIA

Zero rates eould smash the banks

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 8-Sep-16

A decline in the cash rate to zero would have a negative impact on returns from Australian banking stocks. Credit Suisse analysts Jarrod Martin and James Ellis have calculated that such a scenario would trigger a fall in earnings of the major banks by an average of nine per cent or $A2.7 billion in total. Consequently, the banks would have to respond to a fall in return on equity by reducing their dividend payout ratios.

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

Technology Early Adopters are pioneers for much more than just new technology

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 2-Sep-16

A Roy Morgan Research Single Source survey, which was carried out in the year to June 2016, has found that 3.7 million Australians aged 14+ (19 per cent) can be classified as Technology Early Adopters. Always first to purchase and use new technologies, Technology Early Adopters are well educated with high incomes and risk-taking tendencies. 27 per cent of Technology Early Adopters agree they are often the first to buy new home entertainment or electronic equipment, compared with 15 per cent of all Australians.

CORPORATES
ROY MORGAN RESEARCH LIMITED

Labor kept at bay over banks

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 : 1-Sep-16

The Australian Government has announced an inquiry into the practices of small business lenders. The inquiry, to be led by Small Business Ombudsman Kate Carnell, will examine "the adequacy of the law" to deal with lending practices that may need tighter regulatory provisions. About 23 cases will be examined which were identified as problematic by the Parliamentary Joint Committee on Corporations & Financial Services.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, BANK OF WESTERN AUSTRALIA LIMITED, AUSTRALIAN BANKERS’ ASSOCIATION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CEC GROUP LIMITED – ASX CEG

Consumer satisfaction with big four banks up in July

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 31-Aug-16

A Roy Morgan Research Single Source survey has found that the satisfaction level of the personal customers of Australia’s four major banks was 79.7 per cent in the six months to July 2016, compared with 79.5 per cent in June. 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 (79.6 per cent), National Australia Bank (78.0 per cent) and Westpac (77.7 per cent). Outside of the big four banks, Teachers Mutual remains the best performer with 93.8 per cent satisfaction, followed by Bank Australia (93.6 per cent) and Heritage Bank (92.1 per cent).

CORPORATES
ROY MORGAN RESEARCH 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, TEACHERS MUTUAL BANK LIMITED, BANK AUSTRALIA, HERITAGE BANK LIMITED – ASX HBS

CBA cuts discounts to boost margins

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 23-Aug-16

The Commonwealth Bank has advised mortgage brokers that the discount on some of its mortgage loan applications for owner-occupiers and investors will be reduced by 15 basis points. It has also cut the discount on several other mortgage products by eight basis points. The move has been attributed to factors such as the rising cost of funding and new capital requirements. Australia’s major banks recently attracted criticism for withholding most of the 25 basis point reduction in the cash rate.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

Big four the cheapest in 20 years, says Regal

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Original article by Vesna Poljak
The Australian Financial Review – Page: 17 : 17-Aug-16

Regal Funds Management’s Julian Babarczy says Australia’s four major banks offer good value at present, noting that their valuations are at or near their lowest in the last two decades. Meanwhile, Babarczy says the banks’ capital ratios and credit quality are sufficient at present so they do not need to undertake capital raisings. The proceeds of the ANZ Bank’s $A1bn hybrid securities issuance will be treated as additional tier-1 capital rather than common equity tier-1 capital.

CORPORATES
REGAL FUNDS MANAGEMENT PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NIKKO ASSET MANAGEMENT GROUP

CBA chief’s $12.3m pay bonanza

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Original article by Michael Roddan, Ben Butler
The Australian – Page: 21 & 25 : 16-Aug-16

Commonwealth Bank executives were collectively paid a total of $A44.8m in 2015-16. This includes the $A12.3m remuneration of CEO Ian Narev, which was 50 per cent higher than previously. However, the banking major notes that this includes equity awards that were granted over the previous four years and vested during the financial year. Narev’s remuneration rose by 5.4 per cent to $A8.77m on a statutory basis. The bank recently posted a cash profit of $A9.45bn for 2015-16.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN LABOR PARTY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

CBA to drive returns as results soften

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Original article by Michael Bennet
The Australian – Page: 21 & 25 : 11-Aug-16

The Commonwealth Bank of Australia has posted a 2015-16 cash profit of $A9.45bn. Despite being a record result, it was just three per cent higher than previously, due to a disappointing performance across the group’s key businesses in the second half. CBA’s return on equity fell to 16.5 per cent and its net interest margin fell to 2.07 per cent. CEO Ian Narev says banks must take into account the needs of borrowers, savers and shareholders with regard to setting interest rates. Shareholders will receive a full-year dividend of $A4.20 per share.

CORPORATES
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, WAVESTONE CAPITAL PTY LTD, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, WATERMARK FUNDS MANAGEMENT PTY LTD, BELL POTTER SECURITIES LIMITED

Elliott steadies the ship at ANZ

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Original article by Michael Bennet
The Australian – Page: 21 & 25 : 10-Aug-16

The ANZ Bank has posted a cash profit of $A5.2bn for the nine months to 30 June 2016, which is three per cent lower than previously. ANZ’s earnings for the June 2016 quarter were below expectations at around $A1.7bn, while bad debt charges rose to $A482m during the quarter. Meanwhile, CEO Shayne Elliott has defended the banks’ decision to pass on only part of the 25 basis point reduction in the cash rate to home loan customers and increase the interest rates on some term deposits.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG

CBA to hand down bumper $9.5bn profit

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Original article by Michael Bennet
The Australian – Page: 21 & 24 : 8-Aug-16

Bendigo and Adelaide Bank is tipped to post a 2015-16 cash profit of $A434m on 8 August 2016, while the Commonwealth Bank of Australia is expected to report a full-year profit of $A9.5bn on 10 August. Scott Manning of JP Morgan says margins are likely to remain a significant focus for the banking major. However, the Reserve Bank does not expect banks’ margins to be adversely affected by recent moves to lift some term deposit interest rates while failing to pass on the full reduction in the cash rate to home loan and business customers.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, JP MORGAN AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, MERLON CAPITAL PARTNERS PTY LTD, MORGANS FINANCIAL LIMITED, PEABODY ENERGY CORPORATION, UBS HOLDINGS PTY LTD, CITIGROUP PTY LTD, FIRST OIL PLC