MORTGAGE LOANS – AUSTRALIA

Debt soars on the home front

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Original article by David Uren
The Australian – Page: 2 : 5-Jan-15

A report from the Reserve Bank shows that Australia’s total housing debt now exceeds total household income by 39 per cent. This compared with a differential of just 29 per cent prior to the global financial crisis (GFC). Meanwhile, the interest paid on mortgage loans now accounts for about 7.2 per cent of household income, down from nearly 11 per cent prior to the GFC. The figures also show that total household assets significantly exceed household disposable income

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Majors facing $20bn squeeze

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Original article by Michael Bennet
The Australian – Page: 17 : 8-Dec-14

Among the recommendations made in the financial system review report by David Murray for the Australian Government is that the four main banks should significantly increase their reserve capital holdings. They are also urged to lift the risk weighting on home mortgage loans to a range of 25% to 30%. Analysts calculate that if adopted the new requirements will create an additional cost burden of $A20bn per annum for the sector. Australian Bankers’ Association CEO Steven Munchenberg has vowed to persist with its lobbying effort against the proposals and those of the Australian Prudential Regulation Authority

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN BANKERS’ ASSOCIATION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, WATERMARK FUNDS MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, CREDIT SUISSE (AUSTRALIA) LIMITED, THE BOSTON CONSULTING GROUP PTY LTD

Murray review could lift costs

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Original article by Kylar Loussikian
The Australian – Page: 18 : 4-Sep-14

JPMorgan banking analyst Scott Manning warns that wholesale funding costs in the banking sector may rise some $A2.2bn, if recommendations likely to be made by the Australian Government’s new financial system review are adopted. A major issue is potentially more stringent capital requirements to fund home mortgage lending. Interest rate discounts on such loans offered by the main banks have grown to between 1% and 1.4% from 0.2% in 2009

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, JP MORGAN AUSTRALIA LIMITED

Correction in housing market ‘inevitable’

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Original article by Damon Kitney
The Australian – Page: 21 : 3-Sep-14

Residential real estate prices have risen an average 15% in a year in the Australian state and territory capital markets, while auction clearance rates in late August 2014 are around 70%. Australian Prudential Regulation Authority data also indicate that the main four banks are taking on riskier mortgage loan borrowers. However business leader David Gonski says while an eventual price decline is a certainty in the housing market, the banks are able to manage their lending strategies

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, SCHULTE RESEARCH INTERNATIONAL

APRA hints at shifting capital

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Original article by Michael Bennet
The Australian – Page: 16 : 1-Sep-14

The Australian Prudential Regulation Authority has lodged its submission to the Federal Government’s financial system review. The watchdog wants global rules for the banking sector that require greater capital reserves for mortgage lending to apply locally. It is also sharing concerns of the Reserve Bank of Australia that more liberal lending standards could create unsustainable prices in the residential real estate market. Banks using advanced systems can access public guarantees at a lower cost

CORPORATES
BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, MACQUARIE BANK LIMITED – ASX MBL, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG

Murray focus ‘on capital reserve requirements’

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Original article by Michael Bennet
The Australian – Page: 19 : 29-Aug-14

Smaller regional banks have in their submissions to the Australian Government’s new financial system review called for less onerous rules on the capital requirements to back mortgage loans. At the same time the four major banks have argued against any increase to the levels that apply to them. However the latter is believed to be the more likely recommendation by the review, as the Reserve Bank of Australia is wary of further strong growth in an already booming residential real estate market

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE GROUP LIMITED – ASX MQG, DEUTSCHE BANK AG, MERRILL LYNCH (AUSTRALIA) PTY LTD

Reserve Bank takes aim at mortgages

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Original article by Michael Bennet
The Australian – Page: 17 : 28-Aug-14

The four major as well as smaller regional banks have lodged their submissions for the second round of the Australian Government’s financial system review. The main lenders are arguing against stricter capital requirement rules, while the minor banks want access to public guarantees on the same favourable terms enjoyed by their competitors. However both lobbying efforts have now been criticised by the Reserve Bank of Australia. It is concerned about any moves that would lead to even greater mortgage lending, as consumers may default when interest rates rise again

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN BANKERS’ ASSOCIATION, BBY LIMITED, PRICEWATERHOUSECOOPERS, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Bank rush for fixed-rate loans

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Original article by Clancy Yeates
The Australian Financial Review – Page: 20 : 18-Aug-14

The Commonwealth Bank of Australia (CBA) has matched recent moves by several rivals to reduce their most popular fixed interest rate home loans. CBA’s three-year interest rate has been reduced by 15 basis points, to 4.94 per cent, while its four-year fixed rate has been cut by 50 basis points to 5.09 per cent. CBA’s Clive van Horen notes that there has been a spike in customers opting for fixed-rate loans since its five-year rate was cut in July 2014

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, CANSTAR PTY LTD

It’s not a bubble, says CBA

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Original article by Jonathan Shapiro, James Eyers
The Australian Financial Review – Page: 1 & 10 : 14-Aug-14

The Commonwealth Bank of Australia (CBA) has posted a record cash profit of $A8.68bn for the 2013-14 financial year. The banking major wrote about $A12bn worth of new home loans during the year, and its mortgage book is now worth nearly $A400bn. It has benefited from low interest rates, which in turn has prompted a sharp rise in house prices, but CBA has downplayed concerns about a housing bubble. CBA shares closed 0.9 per cent lower at $A80.96 on 13 August 2014, although the stock has gained 8.6 per cent in the last year

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN BUREAU OF STATISTICS, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, ALPHINITY INVESTMENT MANAGEMENT PTY LTD

Big four banks lead lenders in slashing term deposit rates for savers

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Original article by Michael Bennet
The Australian – Page: 21 : 6-Aug-14

New data issued by Canstar show that Australia’s four main banks have taken the record low official cash interest rate as their cue to not only reduce home loan rates but the interest paid on term deposits. The five-year term rate has been cut by 15 basis points to 4.05% at National Australia Bank, and 20 basis points to 4.15% at Westpac Banking. A reduction of 40 basis points to 3.6% has also been announced by Suncorp. Commonwealth Bank of Australia had recently started a move by the major lenders to drop the fixed-rate mortgage rate to 4.99% for the first time ever

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, SUNCORP GROUP LIMITED – ASX SUN, CANSTAR PTY LTD, RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG, HSBC BANK AUSTRALIA LIMITED, MACQUARIE BANK LIMITED – ASX MBL, MOODY’S INVESTORS SERVICE INCORPORATED, AUSSIE HOME LOANS LIMITED