S&P gives AMP thumbs down over bad news

Original article by James Frost
The Australian Financial Review – Page: 19 : 28-Aug-19

The credit rating of wealth manager AMP has been downgraded from ‘A-‘ to ‘BBB+’ by S&P Global Ratings. The long-term issuer credit rating of AMP Bank and AMP Life have also been downgraded by one notch apiece. S&P has indicated that the ratings downgrade was primarily due to the recent deal to sell AMP Life to Resolution Life, which will have an impact on AMP’s group credit profile. S&P also said it may review AMP’s credit rating if the deal does not proceed, although this may not result in an upgrade.

CORPORATES
AMP LIMITED – ASX AMP, AMP LIFE LIMITED, AMP BANK LIMITED, S&P GLOBAL RATINGS, RESOLUTION LIFE GROUP LIMITED

Financial advisers too expensive and can’t be trusted: report

Original article by Duncan Hughes
The Australian Financial Review – Page: 2 : 27-Aug-19

The Australian Securities & Investments Commission has released the findings of a survey on consumers’ attitudes toward the financial advice sector. It shows that there is a high level of distrust regarding the sector; amongst other things, about 50 per cent of respondents believe that financial advisers are more concerned about making themselves rich than helping clients, while almost 30 per cent prefer to obtain financial advice from family members, friends or colleagues. The ASIC report is based on interviews with almost 2,500 investors.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AMP LIMITED – ASX AMP

Savers at risk in bank, credit union data hack

Original article by Joyce Moullakis
The Australian – Page: 19 : 26-Aug-19

The security of the New Payments Platform is under scrutiny in the wake of revelations that the system has been subject to a second data breach. Cuscal has indicated that only about three per cent of bank and credit union customers who have registered for a PayID have been affected by the breach, which equates to less than 92,000 customers. Westpac customers who use the real-time NPP system were affected by a data breach in June.

CORPORATES
CUSCAL, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

AMP accused of leaving planners in limbo

Original article by Joyce Moullakis
The Australian – Page: 12 : 20-Aug-19

The Finance Sector Union will ask the Fair Work Commission to intervene over AMP’s plans to revamp its financial planning operations. AMP has indicated that it intends to reduce the amount it pays when acquiring financial planning practices as a ‘buyer of last resort’, as well as cutting adviser numbers. The AMP Financial Planners Association will hold a meeting during August to allow members to vote on possible courses of legal action against AMP.

CORPORATES
AMP LIMITED – ASX AMP, FINANCE SECTOR UNION, AUSTRALIA. FAIR WORK COMMISSION, AMP FINANCIAL PLANNERS ASSOCIATION

Investors query AMP turnaround

Original article by James Frost
The Australian Financial Review – Page: 17 & 22 : 9-Aug-19

AMP has announced a loss of $2.3bn for the first half of 2019 and a new strategy to turn around its fortunes. Amongst other things, the wealth manager aims to reduce costs by about $300m a year. AMP has also flagged plans to significantly reduce the number of financial advisers in its network and place more emphasis on so-called roboadvice. AMP will also continue to pursue the sale of its life insurance business to Resolution Life, while it will issue new shares at $1.50 apiece via a $650m capital raising.

CORPORATES
AMP LIMITED – ASX AMP, RESOLUTION LIFE GROUP LIMITED, MERLON CAPITAL PARTNERS PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD

Big four lending at record low as competition bites

Original article by Duncan Hughes
The Australian Financial Review – Page: 3 : 6-Aug-19

Analysis by Morgan Stanley suggests that smaller Australian banks and non-authorised deposit-taking institutions are enjoying stronger growth in mortgage lending than the nation’s four largest banks. The ‘big four’ are attempting to counter this by offering incentives and aggressively reducing their interest rates, but some of the smaller lenders are matching these offers. Meanwhile, data from Australian Finance Group shows that the market share of non-bank lenders rose to a record 42 per cent in the June quarter.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIAN FINANCE GROUP LIMITED – ASX AFG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, ME BANK, BENDIGO BANK, CANSTAR PTY LTD, THINKTANK, THE BLACKSTONE GROUP LP, LA TROBE FINANCIAL PTY LTD

Super, insurance chiefs to face MPs

Original article by Phillip Coorey
The Australian Financial Review – Page: 7 : 26-Jul-19

The CEOs of insurance companies and superannuation funds will be required to appear before federal parliament’s Standing Committee on Economics at least once a year. Bank CEOs have had to front the committee regularly since 2016, and the heads of industry groups such as the Australian Banking Association will now also be asked to do so. Meanwhile, Prime Minister Scott Morrison has defended the government’s slow response to implementing the Hayne royal commission’s recommendations, stressing the need to proceed with caution to avoid any unintended consequences.

CORPORATES
AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN BANKING ASSOCIATION, AUSTRALIAN LABOR PARTY

AMP’s credit ratings still at risk after stalled life sale

Original article by Jonathan Shapiro, James Frost
The Australian Financial Review – Page: 13 & 16 : 17-Jul-19

S&P Global has advised that AMP’s credit rating will remain on negative watch after the Reserve Bank of New Zealand imposed conditions on the sale of its life insurance business. Nicholas Yap of Nomura believes that AMP is likely to face a credit ratings downgrade at some point, citing factors such as a reduction in the value of its life business and a class action lawsuit over excessive superannuation fees. AMP shares fell 1.6 per cent to $1.78 on 16 July.

CORPORATES
AMP LIMITED – ASX AMP, AMP LIFE LIMITED, S&P GLOBAL RATINGS, NOMURA AUSTRALIA LIMITED, RESOLUTION LIFE GROUP LIMITED, RESERVE BANK OF NEW ZEALAND, MOODY’S INVESTORS SERVICE INCORPORATED, MACQUARIE GROUP LIMITED – ASX MQG, CITIGROUP PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED

AMP rattled as $3.3bn sale breaks down

Original article by Cliona O’Dowd, Joyce Moullakis
The Australian – Page: 17 & 20 : 16-Jul-19

Shares in AMP closed 15.81 per cent lower at $1.81 on 15 July after the Reserve Bank of New Zealand thwarted the proposed sale of its life insurance division. The central bank said it would not support the sale of AMP Life NZ to the UK-based Resolution Life unless the assets underpinning New Zealanders’ policies are ‘ring-fenced’. AMP still hopes to secure a deal, but analysts say any sale now is likely to be at a much lower price than the $3.3bn that Resolution Life had agreed to pay. AMP has also advised that investors will not receive an interim dividend, citing uncertainty regarding the sale of AMP Life.

CORPORATES
AMP LIMITED – ASX AMP, AMP LIFE LIMITED, RESOLUTION LIFE GROUP LIMITED, RESERVE BANK OF NEW ZEALAND, ALLAN GRAY AUSTRALIA PTY LTD, MORNINGSTAR PTY LTD, REGAL FUNDS MANAGEMENT PTY LTD, SHAW AND PARTNERS LIMITED, MACQUARIE GROUP LIMITED – ASX MQG

Fels laments lack of bank competition

Original article by Adam Creighton
The Australian – Page: 2 : 11-Jul-19

Former Australian Competition & Consumer Commission chairman Allan Fels has expressed concern about the four major banks’ domination of the nation’s home loans market. He says competition in Australia’s banking sector has declined substantially since the global financial crisis. He also notes that there is now very little difference between the "big four" banks and that it is relatively easy for them to co-ordinate their actions without breaching cartel laws.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, RESERVE BANK OF AUSTRALIA, ST GEORGE BANK LIMITED, BANKWEST, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY