Australian banks

MacroBusiness covers Australian banks from the perspective of their macro-economic role, as political economy actors, as investment propositions and in terms of financial stability and capital adequacy. Australian banks have played a crucial role in inflating the Australian property bubble, exist within an utterly privileged position as “too big to fail” institutions and operate within a deeply distorted financial architecture that has Australian tax payers well and truly on the hook in the event of trouble. MacroBusiness seeks to define this role for investors as well as change it in the name of the Australian national interest.

6

Mortgage arrears ease again

Via S&P: Mortgage arrears across Australian prime residential mortgage-backed securities (RMBS) fell to 1.08% in September from 1.10% in August, according to a recent report by S&P Global Ratings. Arrears typically have fallen from August to September during the past five years. The arrears average for the past decade is 1.25%, and the average for

18

SA folds on bank levy

By Leith van Onselen Just in via The Australian: The South Australian government has abandoned its controversial bank tax. Premier Jay Weatherill says the levy, designed to raise $360 million from the big banks over the next four years, has no prospect of being passed in state parliament. “For all intents and purposes, the bank

37

Banks claim Hitler persecution as NAB discovers laundering holes

Via AFR: Former ANZ chief executive Mike Smith says the big four banks could have handled recent political attacks better, saying whenever governments want “mob interest” they always turn on the banks. “It’s being used as political capital … when you want to get mob interest, you turn on the banks. Hitler did it,” Mr

6

Odds firming for a banking Royal Commission

By Leith van Onselen After narrowly holding-off a banking Royal Commission in September 2016, it was reported last month that three Coalition MPs were considering crossing the floor of parliament and voting in favour of establishing a Royal Commission. Yesterday, SBS News reported that the crossbench will use its balance of power in the federal

8

Evil Anna gets a makeover

The AFR wants to repair the image of Evil Anna: Even Anna Bligh’s staunchest supporters were stunned when the former Queensland premier, who is still a member of the Labor Party, aligned herself with – or worse, put herself at the beck and call of – what many consider a slippery industry: the banks. “I

21

How to control the banksters

The banking system is broken, propped up by every day taxpayers for the benefit of a few, mainly in the FIRE sector. Mortgage loans are the cancer that’s eaten away whatever financial stability Australia had previously. Our own politicians might smell that something is rotten with MegaBank, but how many realise that their careers and

2

Bank bad loans fall to 1980 levels

Via UBS:   The one that got away? The Major Banks’ 2H17 results were mixed, with subdued growth the key theme. Entering reporting season we had suspected earnings could surprise positively given mortgage repricing and lending tailwinds. However, Non-Interest Income was even weaker than anticipated. Overall Sector EPS was up just 1.2% sequential, with PreProvision

70

NAB sacks 6000

Via UBS: TWO LINER Result in line. Good NIM. BUT flagged capex blowout in FY18 (guiding FY18 costs up 5-8% plus $500m-$800m restructuring charge). Costs then flat to 2020. KEY NUMBERS (FY17) (1) Cash NPAT +2.5% to $6,642m (Cons. $6,661m); (2) Cash Basic EPS 249cps (Cons. 250cps); (3) Final DPS held at 99c. RESULT HIGHLIGHTS (2H17

7

Mortgage arrears fall again

Via Moody’s: Moody’s Investors Service says that delinquencies for Australian auto loan asset-backed securities (ABS) and prime residential mortgage-backed securities (RMBS) fell in August 2017 from July 2017. Specifically, 30+ day delinquencies for Australian auto loan ABS transactions fell to 1.60% in August 2017 from 1.64% in July 2017, but rose from 1.42% in August

15

Bank levies don’t “cost jobs”, they create them

Gail Kelly says so: Former Westpac chief executive Gail Kelly has slammed the proposed South Australian bank tax, warning a short-term “sugar fix” sought by the Weatherill government will ultimately mean less ­investment and fewer jobs. In her first public remarks about the controversial impost, Ms Kelly yesterday told The Australian that a “quick fix, a sugar

43

Bendigo warns, Westpac tightens

Via UBS: BEN issues market update with its AGM BEN provided some commentary on key line-items at its AGM this morning. Key statements: (1) Balance Sheet growth is expected to be “relatively flat” in 1H18 as it has had to “slam on the brakes in investor and interest only lending” to comply with Macro Prudential

3

APRA corrals shadow banks

From Australian Parasite: The Australian Prudential Regulation Authority (APRA) will be tasked to infiltrate the non-bank sector for enhanced data gathering, according to Treasurer Scott Morrison APRA will have “eyes on the ground” with its ability to collect data from non-ADI lenders, Morrison said in an address to the Financial Services Council in Sydney yesterday (30 October). “Such

4

Bank levy dividend: offshore funder abandons banks

Via The Australian: South Australia’s claims that its investment standing has not suffered as a result of the planned bank tax have been challenged after a significant international investor said it had slashed its ­exposure to Australia because of growing political risk. As the state’s upper house prepares to vote this week on the tax

10

Banking Royal Commission back in frame as Coalition MPs mull crossing floor

By Leith van Onselen After narrowly holding-off a banking Royal Commission in September 2016, three Coalition MPs are considering crossing the floor of parliament and voting in favour of establishing a Royal Commission. From The ABC: The High Court disqualification of former deputy prime minister Barnaby Joyce appears to have emboldened several Coalition MPs, who

5

APRA warns small banks to back off macroprudential changes

From Wayne Byers, APRA chairman, today: Housing lending standards Before I conclude today, I want to take a short detour to the subject of residential mortgage lending standards. Earlier this year, we announced further measures to reinforce prudent standards across the industry. We did this because, in our view, risks and practices were still not

11

Evil Anna dumps her own fake government reforms

Remember what Evil Anna said when she was appointed as chief banking apologist? “Our banks are critical to the strength and stability of our national economy and the prosperity and wellbeing of every Australian,” she said. “Personally I’ve always believed you get more done inside the tent,” she said. “That’s why I’m very excited the

9

Mortgage arrears fall in cities, boom in regions

Via S&P: The number of delinquent housing loans underlying Australian prime residential mortgage-backed securities (RMBS) fell to 1.10% in August from 1.17% in July, according to a recent report by S&P Global Ratings. The decline, which is not unusual because arrears typically have fallen in August for the past 10 years, was partly influenced by

66

The spooky mortgage risk signs our bankers are ignoring

Cross-posted from The Conversation: I’m not normally a fan of parliament hauling private sector executives before them and asking thorny questions. But when the Australian House of Representatives did so this week with the big banks it was both useful and instructive. And, to be perfectly frank, terrifying. Let’s start with Westpac CEO Brian Hartzer.