Australian banks

Chris Joye has another barnburner today at the AFR about the Son of Wallis inquiry: Fearful that the implicit subsidies from which they benefit will be properly priced, banks are furiously lobbying Hockey and his advisors to focus on “how to fund Australia”, which is code for getting them cheaper and more stable money.

APRA has this morning released its September monthly banking statistics and the results show some stability.

From the AFR: National Australia Bank has admitted that it could be forced to re-assess its future dividend payment plans in response to tough new rules that will require banks to hold billions of dollars more in capital as it posted an annual profit of almost $6 billion.

Credit Suisse on the NAB result: NAB reported (company defined) cash earnings of $5,936mn (up 9% on $5,433mn FY12) which was in line with our $5,963mn estimate and the $5,942mn consensus average. Final DPS of $0.97 (up 8% on $0.90 pcp) was $0.02 better than our estimate and $0.01 better than the consensus average.

By Leith van Onselen The Australian Prudential Regulatory Authority (APRA) has told Australia’s “too-big-to-fail” banks to limit their dividend payouts to investors to allow them to comply with new rules requiring them to maintain higher capital thresholds.

From the SMH, this could get ugly: A customer who claims he was spied on by the Commonwealth Bank is threatening legal action that could expose records of further covert surveillance operations by the bank.

Jeez, the Son of Wallis inquiry is going to be barrel of laughs if this morning is any guide. From Banking Day: When Ian Harper sat on the Financial System (Wallis) Inquiry committee in 1996 the deregulatory push of the 1980s was still driving change.

It’s always amusing to watch elites blow their top. From The Australian: ANZ Bank chief executive Mike Smith has hit back at JPMorgan and its analysis of the bank’s super-regional strategy, urging the US giant to look in its own backyard where it is negotiating a $US13 billion ($13.4bn) settlement with US regulators.

Fresh from Fitch: Mortgage delinquencies have remained low and stable in Australia’s current environment of low interest rates, robust house prices and low unemployment.

The Australian has a good story today on what’s driving Australia’s little credit rebound: HOME-LOAN lenders are on track to this year raise the most money from securities backed by mortgages since the global financial crisis, boosting competition as the property market picks up steam.

This morning Luci Ellis, Head of Financial Stability Department at the RBA, gave a speech titled Stability, Efficiency, Diversity: Implications for the Financial Sector and Policy.

The US fiscal debacle is one of the few recent crises to not have caused Australian bank bond rates to spike.

Chris Joye continues his renaissance today with a deconstruction of the dangers, limits and appropriate parameters for the forthcoming Son of Wallis inquiry.

By Leith van Onselen Bank of Queensland (BoQ) chief, Stuart ­Grimshaw, has urged the Federal Government to boost competition in the home loan market, claiming that the bank capital rules are unfair, since they enable the Big Four banks to hold far less capital than smaller deposit-taking institutions.

From Banking Day: Australian non-bank mortgage lenders, such as Resimac and Pepper, are looking to ramp up their New Zealand businesses to take advantage of the new Reserve Bank of New Zealand limit on low deposit loans by banks.

From Moody’s: Sydney, October 08, 2013 — Moody’s Investors Service says most Australian residential mortgage-backed security (RMBS) transactions with lenders’ mortgage insurance (LMI) insuring the mortgage loan payments are insensitive to changes in the credit quality of mortgage insurers.

From Banking Day: Suncorp Metway was “very close” to a bank run at the height of the financial crisis, in 2008, the bank’s former managing director, John Mulcahy, told the Sunday Mail.

From the AFR: Senior bankers in Britain could face a jail term of up to seven years if their bank fails and they are subsequently found guilty of “reckless misconduct”, draft laws suggest.

Another data point from today’s RBA credit aggregates is term deposits, which I’m a bit surprised have stopped growing and not recently: Basically as soon as the rate cuts started, term deposit growth stopped.

APRA has released its monthly banking statistics this morning and deposit growth slowed sharply in August.

Three years ago I coined the term “invisopower” to describe Australian financial regulators’ weirdly opaque post-GFC tightening of bank regulation. The changes wrought by regulators were (and remain) far larger than the public sales pitch of “exceptionalism” trumpeted worldwide.

By Leith van Onselen The Australian Prudential Regulatory Authority (APRA) has released a paper warning banks about not letting their lending standards slip.

By Leith van Onselen As expected, former Future Fund chairman and CBA CEO, David Murray, and Ian Harper have put his hand up to join or lead the new Government’s promised financial system inquiry.