MORTGAGE LOANS – AUSTRALIA

All eyes on big four as Macquarie lifts rates

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 11 & 16 : 10-Jul-18

There is growing speculation that Australia’s four major banks will increase their mortgage interest rates independently of the Reserve Bank. Macquarie is the latest bank to have advised of a rise in its variable rates for new and existing customers. Jonathan Mott of UBS says the large banks may opt to lift their rates in coming months to reflect the increase in their wholesale funding costs, although Sean Fenton of Tribeca Investment Partners notes that the major banks may be wary of attracting further political scrutiny at present. Some smaller lenders recently increased their mortgage rates.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, TRIBECA INVESTMENT PARTNERS PTY LTD, PEPPER GROUP LIMITED, AMP BANK LIMITED, SUNCORP BANK, AUSWIDE BANK LIMITED – ASX ABA, IMB LIMITED, ME BANK, BANK OF QUEENSLAND LIMITED – ASX BOQ, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

No more low-doc lending, CBA says

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Original article by Anthony Klan
The Australian – Page: 6 : 5-Jul-18

The Commonwealth Bank of Australia has advised that it will cease issuing low-documentation mortgage loans. These products have come under scrutiny amid revelations that mortgage brokers have falsified clients’ income in order to write loans. Low-documentation loans now account for 1.8 per cent of mortgage loans, compared with 7.6 per cent in 2010. CBA also intends to shift from a volume-based remuneration system for mortgage brokers rather than one based on the value of loans written.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

RBA sidelined as cost of money rises

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 28-Jun-18

Futures market pricing suggests that investors expect the Reserve Bank of Australia to keep official interest rates on hold until late 2019. However, the gap between the cash rate and the bank bill swap rate has increased to 61 basis points, compared with an average of 18 basis points for much of the last decade. The rise in the BBSW may eventually prompt Australia’s major banks to increase their mortgage interest rates independently of the RBA, with several of the nation’s smaller lenders having already done so.

CORPORATES
RESERVE BANK OF AUSTRALIA, BANK OF QUEENSLAND LIMITED – ASX BOQ, ME BANK, AMP BANK LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, IFM INVESTORS PTY LTD

Fed hikes put squeeze on banks

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Original article by Karen Maley
The Australian Financial Review – Page: 1 & 28 : 15-Jun-18

The US Federal Reserve has signalled that two more interest rate increases are likely in 2018, following its second rate rise for the year. The new target range for the federal funds rate is between 1.75% and 2%, while the Reserve Bank of Australia has kept its cash rate at 1.5% for almost two years. The divergence in monetary policy has coincided with rising wholesale borrowing costs for Australia’s major banks, as well as a recent spike in the bank bill swap rate. Shane Oliver of AMP says local banks could potentially respond by increasing their mortgage rates on investment and interest-only loans.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, AMP LIMITED – ASX AMP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FINANCIAL STABILITY BOARD, DEUTSCHE BANK AG, SOCIETE GENERALE SA, BNP PARIBAS SA, GRUPO SANTANDER

Fears as problem loans increase

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Original article by Michael Roddan
The Australian – Page: 23 : 8-Jun-18

There was an increase in the number of borrowers falling behind on their mortgage repayments in the six months to March. This suggests that there are still "tail risks" within the housing sector, despite efforts by the Australian Prudential Regulation Authority to crack down on riskier types of loans. Standard & Poor’s has stated that banks may tighten their lending standards as a result of the banking royal commission, and that this may make it harder for households that are trying to refinance their mortgage.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, STANDARD AND POOR’S (AUSTRALIA) PTY LTD, MOODY’S INVESTORS SERVICE INCORPORATED, SHAW AND PARTNERS LIMITED, UBS HOLDINGS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Stress test reveals risk for Australian banks

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Original article by Samantha Bailey
The Australian – Page: 28 : 1-May-18

Fitch Ratings’ mortgage "stress test" of Australia’s major banks shows that they could be vulnerable if a sharp downturn in the housing market were accompanied by a decline in consumer spending and an increase in business lending losses. Fitch warns that a sharp rise in the unemployment rate could trigger a housing market slump, but the ratings agency concludes that the four major banks could withstand such a downturn provided that other key metrics were not affected.

CORPORATES
FITCH RATINGS 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

APRA ends investor loan growth cap

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Original article by James Thomson, Jonathan Shapiro
The Australian Financial Review – Page: 15 : 27-Apr-18

Australian Prudential Regulation Authority chairman Wayne Byres says the major banks have improved their lending standards, so a 10 per cap on growth in lending to residential property investors is no longer necessary. The cap will no longer enforced if banks can demonstrate that they have remained below it for the last six months and that they have complied with APRA’s requirements with regard to loan serviceability. Omkar Joshi of Regal Funds Management does not expect removing the cap to have a significant impact on the banks, given that their lending growth is below this level.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, REGAL FUNDS MANAGEMENT PTY LTD, UBS HOLDINGS PTY LTD, CLSA AUSTRALIA PTY LTD, TEACHERS MUTUAL BANK LIMITED

CBA captured 40pc of Aussie mortgages

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Original article by James Frost
The Australian Financial Review – Page: 17 : 4-Apr-18

Data supplied to the banking royal commission shows that a significant proportion of home loans sold by Aussie Home Loans in 2015 were those offered by its parent company, the Commonwealth Bank of Australia. Up to 39.7 per cent of the mortgages that Aussie Home Loans sold by volume in 2015 were from brands owned by the bank, including Bankwest and Aussie Select. Likewise, 37.5 per cent of mortgage loans sold by value were from CBA-owned brands. A key issue for the royal commission has been whether mortgage brokers are acting in the interests of their customers or the banks.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSSIE HOME LOANS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, BANK OF WESTERN AUSTRALIA LIMITED, AUSSIE SELECT

Mortgage customer satisfaction higher when deal directly with bank

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Original article by Roy Morgan
Market Research Update – Page: Online : 19-Mar-18

A Roy Morgan Single Source survey, which was carried out in the six months to January 2018, has found that home loan customers’ satisfaction with banks when using a mortgage broker was only 77.3%. This compares to 80.3% when home loans were obtained in person at a branch. Even among more recent home loans (held for under six years) satisfaction with going directly into a branch was 81.7%, compared to 78.7% for mortgage brokers. Home loan customers of Bendigo Bank who obtained their loan in person at a branch had the highest satisfaction with 92.6%, followed by Bankwest (87.3%) and St George (86.8%). The best of the big four was NAB with 82.4%, followed by ANZ (79.7%). All of the largest banks, with the exception of Westpac, had higher satisfaction when going direct rather than using mortgage brokers. Meanwhile, satisfaction when using mortgage brokers was highest for St George with 85.6%, Bankwest (82.1%) and Suncorp Bank (82.0%). Each of the big four were below the market average (77.3%) for home loan customer satisfaction when using a mortgage broker, with the best of them being NAB (76.4%) and Westpac (75.7%).

CORPORATES
ROY MORGAN LIMITED, BENDIGO BANK, BANK OF WESTERN AUSTRALIA LIMITED, ST GEORGE BANK LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, SUNCORP BANK

ANZ ramps up home loan growth in mortgage race

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Original article by James Frost
The Australian Financial Review – Page: 19 : 21-Feb-18

The ANZ Bank has advised that its mortgage lending grew at a faster than the broader sector in the December 2017 quarter. However, the number of residential home loans that are in arrears increased from 0.59 per cent to 0.60 per cent quarter-on-quarter. ANZ’s quarterly statement on bank capital also shows that its customers continued to switch from interest-only loans principal-and-interest loans during the quarter, while its common equity tier one capital ratio rose from 10.57 per cent to 10.82 per cent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ