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.

10

Banks’ offshore bond issuance hits all-time high

The Australian Bureau of Statistics (ABS) recently released its National Financial Accounts for the June quarter, which revealed a 0.5% quarterly rise in Australian banks’ gross external liabilities (offshore borrowings), but a 0.6% decrease over the year. Bonds (+$8 billion), Loans (+$7 billion) and Other (+$5 billion) drove the quarterly rise in offshore borrowings by

6

Evil Anna trashed responsible lending push

So says The Guardian in an “exclusive”: A heavy campaign of lobbying by Australia’s banks preceded the treasurer, Josh Frydenberg, telling financial regulators not to enforce responsible lending laws “too stringently”, Guardian Australia can reveal. Regulators have been left with whiplash by a sudden change in the tone of government remarks over the past month,

5

NAB warns, banks slapped

Via NAB: Ken Henry claw backs anybody? Not happy: UBS’ Jon Mott sums it up nicely: From Credit Crunch to Housing Boom in 4 months! A lot of good news priced in While the pick-up in lending is positive, bank fundamentals are increasingly challenged with ultra-low interest rates. Given the falling BBSW, we expect the

7

NAB replicates specufestor rate cut

At Domain: NAB followed CBA by saying it would cut rates for owner-occupiers and investors paying principal and interest by 0.15 percentage points. It will cut rates on interest-only loans for investors by 0.3 percentage points. As we said in our last quarterly report, interest-only loans have been so de-risked that they are now an

52

CBA keeps half of RBA cut unless you’re specufesting

It’s all aboard the specufestor train now: In a move that is likely to influence other banks’ pricing, CBA on Tuesday said it would lower rates by 0.13 percentage points for all owner-occupiers and for property investors who are paying principal and interest on their loans. Property investors with interest-only loans will receive the full

18

Open banking the next threat for majors

Via Ian Verrender at the ABC: Ever paid a hotel bill overseas with an Australian credit card and later been gobsmacked by the fees gouged from your bank account? Perhaps you’ve transferred money offshore to a relative and, after being forced to hand over a large percentage of the total, wondered whether you’d just been

22

Fasco-housing complex guts ASIC HEM push

Yesteray Generalissimo ScoMo ordered more mortgages, at the AFR: Scott Morrison says Australia’s banks must not shy away from lending after the Hayne commission as he pushes back against what he calls an “instinctiveness” in society towards responsible lending standards that are too onerous. Speaking to the Australian American Association in New York, the Prime Minister

21

Generalissimo ScoMo orders more mortgages, CBA obliges

The fasco-housing complex is running hard today at the AFR: Scott Morrison says Australia’s banks must not shy away from lending after the Hayne commission as he pushes back against what he calls an “instinctiveness” in society towards responsible lending standards that are too onerous. Speaking to the Australian American Association in New York, the

0

Lenders shun high-rise property developers

Loan-to-value ratios (LVRs) employed by Australia’s larger non-bank lenders when advancing funds to property developers have fallen from a high of 72% in 2017 to an average of 65%, according to law firm Ashurst. Whereas the major banks have also reduced their exposure to residential apartment developers by more than half over the past three

10

Council of Financial Regulators busy “monitoring”

Always watching, watching watching, never doing: At its meeting on 18 September 2019, the Council of Financial Regulators (the Council) discussed risks facing the Australian financial system, regulatory issues and developments relevant to its members. The main topics discussed included the following: Financing conditions and the housing market. Council members discussed credit conditions and recent developments in

7

Banker: HEM appeal will slow credit

Good. Via Investor Daily: A former Macquarie banker says hazy guidelines around lending will cause problems for the next six months following the Westpac case, predicting the big four banks will corner ASIC and demand clearer standards. During a panel discussion at The REAL Future of Advice Conference in Vietnam this week, former Macquarie head

1

Mortgage arrears remain pressured

Via S&P: Australian prime home-loan arrears fell in July. The Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages dropped to 1.49% in July from 1.51% a month earlier. That’s according to S&P Global Ratings’ recently published “RMBS Arrears Statistics: Australia” report. The trend is seasonal; arrears typically fall at this point in the

4

Dodgy Byers hides banker’s confessions

Via Banking Day legend Ian Rogers: Hidden industry self-assessments must be published pronto and APRA must lean hard on banks to ensure that they are, scrutineer Graeme Samuel told a parliamentary hearing yesterday. Recalcitrant banks – including ANZ and Bendigo and Adelaide Bank and Macquarie Group – need a “reality check”, Samuel told the Standing Committee on

21

ASIC to appeal Westpac HEM ruling

Via ABC: The corporate regulator is appealing a landmark Federal Court ruling in favour of Westpac that validated the bank’s automated home loan approval process for hundreds of thousands of mortgages. Last month, Justice Nye Perram of the Federal Court found in the bank’s favour in a case brought by the Australian Securities and Investments Commission (ASIC)

36

Westpac shreds mortgage rates

Via Banking Day: Westpac and its subsidiary banks have launched an aggressive round of mortgage interest rate cutting, with reductions of as much as 130 basis points. Effective today, Westpac’s four-year investment fixed option (interest only) was cut 130 bps to 3.79 per cent. Westpac’s basic variable rate, for owner occupiers, was cut 15 bps

4

Wayne Byers flees scrutiny to Basel

Nice work from the AFR today: Australian Prudential Regulation Authority chairman Wayne Byres and insurance expert Geoff Summerhayes spent over $100,000 on 11 business trips in the first six months of this year, at the same time as staff complained about the agency’s “shoe-string budget”. The pair made five trips to the picturesque Swiss cities

40

Banks outsource loan assessments to China

Via Herald Sun comes post-Hayne Royal Commission banking: Home loan applications with the big banks are being assessed offshore in countries including India and China without customers’ knowledge, startling new findings have revealed. An investigation by News Corp Australia can reveal three of the nation’s big four banks — ANZ, National Australia Bank and Westpac

14

Just like that, Aussie John plays a different tune

Earlier this week, chief mortgage broker rentier, Aussie John Symond, “urged the government to intervene to ease the pressure on banks over how stringently they must check customers’ living expenses” because borrowers were supposedly running scared: [Symond is] pushing for regulators to take a more “realistic” approach to banks. “I think regulators are going too hard.

28

Aussie John demands return to dodgy mortgages

It’s amazing that only six months after the Hayne Royal Commission exposed prolific criminality in mortgage standards that chief mortgage broker rentier, Aussie John Symond, has “urged the government to intervene to ease the pressure on banks over how stringently they must check customers’ living expenses”: [Symond is] pushing for regulators to take a more