Prospa float postponed by ASIC probe

Original article by James Eyers
The Australian Financial Review – Page: 13 & 16 : 7-Jun-18

Fintech company Prospa Group was slated to make its sharemarket debut on 6 June, but the listing has been delayed for 48 hours. Prospa has advised that the Australian Securities & Investments Commission has raised concerns about some aspects of its business loans contracts. The average annual interest rate of Prospa’s loans is 41 per cent, which has been criticised by Council of Small Business of Australia CEO Peter Strong. Prospa anticipates a default ratio of about one in every 20 customers.

CORPORATES
PROSPA GROUP LIMITED – ASX PGL, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COUNCIL OF SMALL BUSINESS ORGANISATIONS OF AUSTRALIA LIMITED, MACQUARIE CAPITAL PTY LTD, UBS HOLDINGS PTY LTD, FIELD RESEARCH PTY LTD, FINTECH AUSTRALIA PTY LTD, AUSTRALIAN FINANCE INDUSTRY ASSOCIATION LIMITED, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN BANKERS’ ASSOCIATION

NAB admits it had no right to customer’s house

Original article by Ben Butler, Elizabeth Redman
The Australian – Page: 23 : 1-Jun-18

National Australia Bank business customer Ross Dillon was cross-examined before the banking royal commission on 31 May. NAB’s Ross McNaughton admitted that the bank had no legal entitlement to use the entire proceeds from the sale of Dillon’s home to pay off the debts of his business. He said that NAB would only have a legal claim to the proceeds if the business defaulted. Dillon maintained that it had never been his intention to solely pay down his business debts with the proceeds from the sale of his family home.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

CBA shock that Bankwest wasn’t up to scratch

Original article by James Frost
The Australian Financial Review – Page: 7 : 30-May-18

The business loans portfolio of Bankwest came under scrutiny by the banking royal commission on 29 May. The Commonwealth Bank’s chief risk officer David Cohen told the inquiry that the loan book was reviewed after Bankwest’s acquisition in 2009, and concerns were raised about the quality of the loan book and the procedures used for granting loans. Bankwest CEO Jon Sutton also expressed concern about the quality of its business loan book in April 2009 and again in March 2010.

CORPORATES
BANKWEST, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

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