Bank confessions reach new lows

Original article by James Frost
The Australian Financial Review – Page: 1 & 4 : 22-May-18

The banking royal commission is currently examining small business lending, with public hearings on the issue commencing on 21 May. Counsel assisting the commission read out a summary of admissions of poor behaviour in this area from various banks, including a confession from the Bank of Queensland that it had been charging corporate loan customers the wrong interest rates and fees. The commission was told that 87 per cent of loans to small businesses are secured by real estate.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, 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, AUSTRALIAN BANKERS’ ASSOCIATION

Westpac in hot seat over business lending

Original article by James Frost, James Eyers, Edmund Tadros
The Australian Financial Review – Page: 1 & 6 : 21-May-18

The banking royal commission’s third round of hearings will focus on loans by banks to small and medium businesses. The hearings are expected to examine issues such as unfair contracts, what defines a small business and the banking code of practice. Australian Banking Association CEO Anna Bligh is among the witnesses who are scheduled to appear before the inquiry, while Westpac is expected to come under attack over its lending practices to small businesses.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN BANKERS’ ASSOCIATION, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, CAMERON RALPH PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, SUNCORP GROUP LIMITED – ASX SUN, CUSTOMER OWNED BANKING ASSOCIATION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

NAB simplifies its small business lending contracts

Original article by James Eyers
The Australian Financial Review – Page: 19 : 6-Oct-17

National Australia Bank has advised that its standard contract for small business loans has been streamlined to make it "simple, fairer and more transparent". The number of clauses in the standard contract has been reduced from 24 to just 17, while it includes a summary of key terms in plain English. The new contracts will apply to about 98.7 per cent of the bank’s business customers. The move to simplify small business lending contracts follows criticism of the banking sector’s existing contracts by small business ombudsman Kate Carnell earlier in 2017.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, AUSTRALIAN LABOR PARTY

Major banks reduce legal powers over SME customers

Original article by James Eyers
The Australian Financial Review – Page: 16 : 1-May-17

All four of Australia’s major banks have made changes to the terms of their loans to small businesses. The changes, which were recommended by small business ombudsman Kate Carnell, relate to "non-monetary default" clauses in loan contracts. The changes will apply to loans of up to $A3 million, although in the case of Westpac and the ANZ, they will only apply to new loans or when an existing loan is being renewed or modified. The Commonwealth Bank and National Australia Bank will apply the changes to both new and existing loans.

CORPORATES
AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, 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, AUSTRALIAN BANKERS’ ASSOCIATION

Foreign banks fill lending void

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

Fortescue in $US473m deal for ships funding

Original article by Tess Ingram
The Australian Financial Review – Page: 20 : 15-Nov-16

Pure-play iron ore miner Fortescue Metals Group will finance its new fleet of bulk cargo vessels primarily via a $US473m loan from the China Development Bank Financial Leasing Company. Fortescue CEO Nev Power says it could potentially lead to more Chinese banks arranging structured financing deals in Australia. The fleet of eight very large ore carriers will cost $US556m in total, with delivery of the final one scheduled for mid-2018.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CHINA DEVELOPMENT FINANCIAL LEASING COMPANY LIMITED, PATERSONS SECURITIES LIMITED

Banks reject Turnbull demand

Original article by Phillip Coorey, Jacob Greber
The Australian Financial Review – Page: 1 & 4 : 4-Aug-16

Prime Minister Malcolm Turnbull has criticised the major banks for failing to reduce their interest rates by the full 25 basis point reduction in the cash rate on 2 August 2016. Turnbull says the banks have a "social licence" and their CEOs should explain why the rate cut was not passed on to their customers in full. ANZ Bank CEO Shayne Elliott has conceded that banks should do more to explain their decisions on interest rates, but notes that wholesale funding costs are rising and the banks will be subject to new capital requirements.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKERS’ ASSOCIATION

PayPal takes $85m slice of SME lending pie

Original article by Michael Bennet
The Australian – Page: 23 : 8-Jul-16

PayPal has written more than $A85 million worth of loans to about 3,000 small businesses in Australia since late 2014. Darrell Esch, the global general manager of small and medium business lending at PayPal, is amazed by the rate of growth at PayPal Working Capital. The program’s combined figure for loans in the US, Great Britain and Australia exceeds $US2 billion ($A2.6 billion).

CORPORATES
PAYPAL AUSTRALIA PTY LTD, PAYPAL INCORPORATED, SOCIETYONE AUSTRALIA PTY LTD, PROSPA FINANCIAL PTY LTD, MACQUARIE SECURITIES PTY LTD, ETTITUDE AUSTRALIA

Tax breaks to lift borrowing

Original article by Clancy Yeates
The Australian Financial Review – Page: 18 : 18-May-15

The Commonwealth Bank of Australia (CBA) expects more small businesses to take out loans as a result of the Australian Government’s May 2015 Budget. CBA’s Clive van Horen says the $A5.5bn small business package should boost the confidence of small businesses and provide them with the incentive to invest in new equipment. However, TS Lim of Bell Potter says that even with the tax breaks, many small businesses will be reluctant to increase their debt.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BELL POTTER SECURITIES LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Small business warning

Original article by James Eyers
The Australian Financial Review – Page: 15 : 1-Apr-15

The Australian Bankers’ Association’s submission on the financial system inquiry has broadly supported the recommendations on increased capital requirements for the nation’s banks. However, it has questioned the need for local banks to be in the top quartile of banks globally. The submission also raises concerns over the proposal for credit contracts to be covered by laws on unfair contracts, noting the potential impact on loans to small businesses

CORPORATES
AUSTRALIAN BANKERS’ ASSOCIATION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF INDUSTRY AND SCIENCE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION