MORTGAGE LOANS – AUSTRALIA

Comyn claims ACCC exaggeration but welcomes probe

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Original article by Bo Seo
The Australian Financial Review – Page: 12 & 17 : 17-Oct-19

Commonwealth Bank of Australia CEO Matt Comyn and chair Catherine Livingstone are supportive of a new inquiry into mortgage pricing. However, Comyn has questioned the Australian Competition & Consumer Commission’s claim that the pricing gap for new and existing customers of the nation’s major banks is 32 basis points. He says this gap is significantly lower than 30 basis points at CBA. Livingstone notes that the bank takes into account the interests of borrowers, deposit-holders and shareholders when deciding upon its mortgage pricing.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE TREASURY

Regionals undercut bigger bank rivals

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Original article by Joyce Moullakis, Andrew White
The Australian – Page: 17 & 21 : 16-Oct-19

Analysis by RateCity shows that some of Australia’s regional banks are currently offering much lower variable home loan interest rates than the ‘big four’ bank. However, Victor German of Macquarie Group notes that existing customers at some of the smaller banks are also paying much higher mortgage interest rates than new customers. The mortgage pricing of smaller banks is among the issues that will be examined by the Australian Competition & Consumer Commission’s new inquiry into the sector.

CORPORATES
RATECITY PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, SUNCORP BALANCED PROPERTY FUND, SUNCORP GROUP LIMITED – ASX SUN, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, MACQUARIE BANK LIMITED – ASX MBL, BANK OF QUEENSLAND LIMITED – ASX BOQ, AMP BANK LIMITED, ING BANK (AUSTRALIA) LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, JP MORGAN AUSTRALIA LIMITED

Credit raters circle wagons around banks

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Original article by James Eyers, James Frost
The Australian Financial Review – Page: 11 & 14 : 10-Oct-19

Australia’s banks are under growing scrutiny over their failure to reduce their mortgage interest rates by 0.25 per cent in line with the latest official interest rate cut. However, S&P Global Ratings says banks’ profits and capital buffers may be adversely affected if they yield to political pressure and match the Reserve Bank’s rate cut. S&P adds that this could in turn prompt a review of the banking sector’s credit rating. Moody’s Investors Service and Fitch Ratings are also supportive of the banks’ decision to withhold part of the official interest rate cut.

CORPORATES
S&P GLOBAL RATINGS, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, RESERVE BANK OF AUSTRALIA, IBISWORLD PTY LTD, COPLEY FUND RESEARCH, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Strong economies need profitable banks, says Wilson

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Original article by James Frost, Vesna Poljak, Aleks Vickovich, Peter Ker
The Australian Financial Review – Page: 1 & 16 : 9-Oct-19

Wilson Asset Management chairman Geoff Wilson has rejected criticism of Australia’s major banks for failing to pass on the latest official interest rate cut in full. He contends that strong and profitable banks are essential for a strong economy, and he estimates that the sector’s earnings would be $4.5bn-$6bn lower if banks had reduced their mortgage interest rates by 0.75 per cent since June, in line with the Reserve Bank. Bendigo & Adelaide Bank chairman Robert Johanson has also dismissed claims by Prime Minister Scott Morrison that the banks are profiteering by withholding interest rate cuts.

CORPORATES
WILSON ASSET MANAGEMENT, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN LABOR PARTY

We’ve ourselves to blame for paying banks too much

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Original article by Adam Creighton
The Australian – Page: 12 : 8-Oct-19

Australia’s banks have attracted widespread criticism for reducing their mortgate rates by about half of the 0.25 per cent official interest rate cut on 1 October. However, banks are entitled to pass on as much or as little of the cash rate cut as they like, and customers can easily switch to another lender if they are dissatisfied. Consumers effectively pay a loyalty tax for remaining with their existing lender; this may be more appropriately called a stupidity tax, as it raises some $6.3bn each year for mortgage lenders. While banks are the biggest beneficiary of the stupidity tax, it is paid across the economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Banks face heat over loyalty tax

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Original article by Patrick Durkin, James Frost, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 2 : 7-Oct-19

Australian Competition & Consumer Commission chairman Rod Sims has suggested that the nation’s banks are trying to "dud" their loyal customers. Sims, who is hoping Treasurer Josh Frydenberg will grant the ACCC’s request to conduct an inquiry into the competitive strength of the big banks, was commenting on the gap between mortgage interest rates offered to new borrowers and those offered to existing customers; the gap is generally half a percentage point. The banks have argued in private that it is not possible to offer the same competitive rates to all borrowers.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, EVANS AND PARTNERS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, DELOITTE TOUCHE TOHMATSU LIMITED

Squeeze on banks a risk to economy

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Original article by Jemima Whyte, Jonathan Shapiro, Aleks Vickovich, Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 4-Oct-19

The ANZ Bank’s chief economist Warren Hogan has rejected claims by Prime Minister Scott Morrison that the nation’s major banks are ‘profiteering’ by failing to pass on the latest official interest rate cut in full to their home loan customers. He says the banks are merely seeking to protect their margins. Meanwhile, the Australian Banking Association has stressed the importance of ‘strong, stable and profitable banks’ to economic growth and the free flow of credit.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN BANKING ASSOCIATION, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF TECHNOLOGY, SYDNEY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, HYPERION ASSET MANAGEMENT LIMITED, UNISUPER LIMITED, IFM INVESTORS PTY LTD, EVANS AND PARTNERS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Banks blasted for holding back on cuts

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Original article by Joyce Moullakis
The Australian – Page: 17 & 20 : 3-Oct-19

Westpac has reduced its mortgage interest rates by 15 basis points in response to the latest official interest rate cut, while the ANZ Bank has cut its rates by 14 basis points. Prime Minister Scott Morrison and Treasurer Josh Frydenberg have criticised the four major banks for failing to reduce their mortgage rates in line with the 25 basis point reduction in the cash rate. Meanwhile, analysts warn that the banks’ margins will come under pressure due to official interest rate cuts.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, REGAL FUNDS MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, SUNCORP BANK, MACQUARIE BANK LIMITED – ASX MBL, ATHENA HOME LOANS PTY LTD, RATECITY PTY LTD

Major banks hit as credit growth stalls

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Original article by Joyce Moullakis
The Australian – Page: 17 & 28 : 1-Oct-19

Official data shows that annual growth in credit fell to an eight-year low of 2.9 per cent in the year to August, after rising by just 0.2 per for the month. Housing credit and business credit also increased by 0.2 per cent in August, with growth of 3.1 per cent and 3.4 per cent respectively for the year to August. Ed Henning of CLSA anticipates a slight improvement in credit growth in coming months, although Chris Read of Morgan Stanley says credit growth is unlikely to rebound in the near-term unless there is an upturn in housing turnover as well as prices.

CORPORATES
CLSA AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, SWITZER ASSET MANAGEMENT LIMITED, MST MARQUEE, UBS HOLDINGS PTY LTD, 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, MACQUARIE GROUP LIMITED – ASX MQG

CBA cut heats up home loan war

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Original article by Duncan Hughes
The Australian Financial Review – Page: 12 : 25-Sep-19

The Commonwealth Bank of Australia will reduce its interest rates on a range of mortgage loans for owner-occupiers and property investors. The rate cuts range from 10 basis points to 90 basis points, and apply to loan periods ranging from one to five years. Mortgage brokers say the move suggests that CBA expects the Reserve Bank to further ease monetary policy. Westpac recently announced a reduction in its mortgage loan serviceability floor.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF NEW SOUTH WALES