BANKS AND BANKING – AUSTRALIA

High value bank customers lack loyalty

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 5-Nov-15

A Roy Morgan Single Source survey has found that the top quintile of Australian banking and finance customers – which accounts for 63 per cent of total market value – show very little loyalty to financial institutions. The Commonwealth Bank group has the highest share of wallet among top quintile customers (32.1 per cent), ahead of the Westpac group (31.1 per cent) and the National Australia Bank group (30.9 per cent). However, the NAB group has the highest share of the wealth management wallet among top quintile customers, at 17.1 per cent.

CORPORATES
ROY MORGAN RESEARCH LIMITED, 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, BANK OF QUEENSLAND LIMITED – ASX BOQ, MACQUARIE GROUP LIMITED – ASX MQG

NAB does 10-year deal with Visa

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Original article by Shaun Drummond
The Australian Financial Review – Page: 17 : 2-Nov-15

National Australia Bank has terminated its alliance with MasterCard in favour of rival credit card provider Visa. The two groups will co-operate in the development of new payment solutions as the trend toward the use of mobile devices for making payments gathers pace. Australian banks are also holding talks with Google regarding the introduction of its Android Pay system.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, VISA INTERNATIONAL, MASTERCARD AUSTRALIA LIMITED, GOOGLE INCORPORATED, APPLE INCORPORATED, SAMSUNG CORPORATION, AMERICAN EXPRESS COMPANY

Bank profits feel the heat of increased competition

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 2-Nov-15

Factors such as low interest rates and growing competition are putting downward pressure on the lending margins of Australia’s major banks. Westpac has reported flat net interest margins for fiscal 2015, while the rival "big four" banks reported lower margins. Julie Coates of PricewaterhouseCoopers forecasts that the banks’ margins will fall below the record low of 2.05 per cent recorded in 2008.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WATERMARK FUNDS MANAGEMENT PTY LTD, BELL POTTER SECURITIES LIMITED, RESERVE BANK OF AUSTRALIA

ANZ calms the market on dividends fears

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Original article by Clancy Yeates, James Eyers
The Australian Financial Review – Page: 13 & 17 : 30-Oct-15

The ANZ Bank has posted a cash profit of $A7.2bn for 2014-15, which is one per cent higher than previously. However, its Australian division’s cash profit rose by seven per cent. The group’s return on equity fell from 15.4 per cent to 14 per cent in 2015-16, and CEO Mike Smith says it will abandon its goal of lifting this to 16 per cent. He has also stressed that ANZ will not reduce its dividend payout in order to offset the cost of complying with new capital requirements.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CITIGROUP PTY LTD, CADENCE CAPITAL LIMITED – ASX CDT, DEUTSCHE BANK AG, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Bank ‘power’ to protect $30b profits

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Original article by Shaun Drummond, Patrick Commins, Clancy Yeates, Joyce Moullakis
The Australian Financial Review – Page: 1 & 8 : 26-Oct-15

Some fund managers believe that Australian bank customers rather than shareholders are likely to bear the brunt of complying with new capital requirements. Australian Prudential Regulation Authority chairman Wayne Byres recently suggested that shareholders should expect a slightly lower return as a result of the new requirements. However, all four major banks have now lifted their variable mortgage loan interest rates. Meanwhile, the major banks are poised to post a combined profit in excess of $A30bn for 2014-15.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AURORA FUNDS MANAGEMENT LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, BELL POTTER SECURITIES LIMITED, WATERMARK FUNDS MANAGEMENT PTY LTD, CITIGROUP PTY LTD, CONTANGO ASSET MANAGEMENT LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, CLYDESDALE BANK PLC, MACQUARIE GROUP LIMITED – ASX MQG, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED

CBA hike undercuts Westpac

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Original article by Jonathan Shapiro, Phillip Coorey, Clancy Yeates
The Australian Financial Review – Page: 1 & 9 : 23-Oct-15

The Commonwealth Bank will increase its standard variable mortgage interest rates for owner-occupiers and property investors by 15 basis points, to 5.60 per cent and 5.87 per cent respectively. The move has been criticised by federal Treasurer Scott Morrison and Opposition Leader Bill Shorten, and follows Westpac’s recent decision to lift its home loan rates by 20 basis points. The interest rate rises are in response to new capital requirements for the banking sector.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSSIE HOME LOANS LIMITED, RESERVE BANK OF AUSTRALIA

Big four banks lag in home loan customer satisfaction

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 22-Oct-15

A Roy Morgan Single Source survey has found that the overall satisfaction level of home loan customers of Australia’s big four banks was 80 per cent in the six months to September 2015. This compares with 78.2 per cent 12 months ago. The Commonwealth Bank (82 per cent) and Westpac (80.8 per cent) had the highest individual satisfaction ratings among home loan customers of the four major banks. However, ME Bank home loan customers have the highest satisfaction rating (92.8 per cent), closely followed by ING Direct (92.7 per cent). Meanwhile, the Commonwealth Bank increased its lead in overall customer satisfaction (82.5 per cent) among the big four banks.

CORPORATES
ROY MORGAN RESEARCH LIMITED, 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, ME BANK, ING DIRECT, BANK OF SOUTH AUSTRALIA LIMITED, BENDIGO BANK, BANK OF MELBOURNE LIMITED

Bank customers tipped to fix their mortgages

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 21-Oct-15

The fall in the two-year swap rate to just 1.9 per cent has prompted some smaller financial institutions to reduce their fixed mortgage interest rates in recent weeks. ME Bank’s John Caelli says the downturn in the swap rate may be due to renewed speculation about the timing of monetary policy changes in Australia and the US. Jessica Darnbrough of Mortgage Choice says more home loan borrowers may opt for a fixed interest rate in the wake of Westpac’s move to lift its variable rates.

CORPORATES
ME BANK, MORTGAGE CHOICE LIMITED – ASX MOC, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF WESTERN AUSTRALIA LIMITED, NEWCASTLE PERMANENT BUILDING SOCIETY LIMITED, HERITAGE BANK LIMITED – ASX HBS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Westpac shares climb after capital raising, rate increase

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Original article by Clancy Yeates
The Australian Financial Review – Page: 1 & 10 : 20-Oct-15

Shares in Westpac closed three per cent higher at $A31.34 on 19 October 2015, after being in a trading halt for almost a week. Clime Investment Management’s John Abernethy suggests that short selling in the wake of a $A3.5bn capital raising may have been the main driver of Westpac’s share price rise, rather than its move to lift mortgage interest rates by 0.2 per cent. Morningstar’s David Ellis says rival banks are likely to increase their own home loan rates.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CLIME INVESTMENT MANAGEMENT LIMITED – ASX CIW, MORNINGSTAR PTY LTD, WATERMARK FUNDS MANAGEMENT PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, ALPHINITY INVESTMENT MANAGEMENT PTY LTD

Small lenders likely to follow majors up

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Original article by Shaun Drummond
The Australian Financial Review – Page: 17 : 16-Oct-15

Australia’s other three major banks have not yet increased their home loan interest rates in response to Westpac’s move. Bendigo & Adelaide Bank CEO Mike Hirst has indicated that the regional bank may increase its mortgage rates if the other "big three" do so, while Suncorp Bank, CUA and Firstmac may do so as well. Suncorp reduced its interest rates on some home loans on the same day that Westpac announced its rate increase.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, SUNCORP BANK, SUNCORP GROUP LIMITED – ASX SUN, CREDIT UNION AUSTRALIA LIMITED, FIRSTMAC LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA