Not involved in any succession arrangements: Emigration looms as an option.
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Bravo: Humiliation of Ken Henry complete
Primary Section
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
Choice: Mortgage broking lobby already proving Hayne right
By Leith van Onselen The CEO of consumer advocacy group Choice, Alan Kirkland, has penned an enlightening article lashing the mortgage broking industry, claiming it is using the same dirty tricks deployed by the advice industry when it was forced to move from a commissions-based model under the FoFA reforms: Within hours of the final
11
ANZ to ease clamp on specufestors
Via ANZ’s new profits release: As I noted last week, ANZ had indeed led the specufestor clamp down: It’s a great shame they’re turning that around. That said, I do not expect it to make much difference to systemic growth. I was thinking of rewarding the bank with my own business. No longer.
9
Mortgage broker locusts swarm politicians
By Leith van Onselen The mortgage broker locusts continue to swarm politicians over the Hayne Royal Commission’s recommendation to overhaul mortgage broking from a commission-based to a user-pays system. The head of the country’s biggest retail mortgage broker, Aussie Home Loans chief James Symond, is mobilising brokers across Australia to lobby politicians to retain the
20
Westpac profit flatlines as 90+ day mortgage arrears surge
By Leith van Onselen Westpac has announced its Q1 trading update, which revealed a flat profit result: Westpac also posted a slight uptick in mortgage delinquencies: However, 90+ day delinquencies rose sharply, driven by WA: Whereas the share of interest-only mortgages fell sharply to 32% from 46% in September 2017:
7
Credit crunch spreads to personal lending
By Leith van Onselen While all the focus has been on the housing credit crunch and the sharp slowdown in mortgage lending, it’s easy to miss the fact that personal lending has also taken a hammering, falling for more than three consecutive years: Now there are fears that in the fallout from the banking royal
2
Voters trust Bowen over Frydenberg on Hayne
Via AFR: Many more voters trust Labor than the Coalition to implement the recommendations of the banking royal commission, according to a poll that also shows Josh Frydenberg and his rival Chris Bowen level-pegging as the nation’s preferred treasurer. The latest The Australian Financial Review-Ipsos poll, the first for this political year, shows almost half
14
Labor’s banker smash fires up ASIC
Do not expect any loosening of credit in this cycle, via AFR: The corporate regulator’s chief prosecutor, Daniel Crennan, QC, has warned the government has empowered him to pursue “extremely harsh civil penalties and criminal sanctions against banks, their executives and others” after the Senate passed tough new rules for white-collar offences. Corporate executives could
16
Consumer groups slam mortgage broker forum
By Leith van Onselen Consumer groups have lashed the mortgage broking industry for pretending to care about reform while vigorously lobbying politicians to protect their commissions. From SBS News: The consumer groups that were part of a forum with the mortgage-broking industry have quit en masse, citing a lack of progress and willingness to change.
21
Ken Henry leaves behind Australia’s least trusted bank
Via The Australian: Ken Henry is nothing if not staunch in his self-belief. His friends have often described him as the “great oak” – the stronger the wind blew, the harder he pushed back. For months since a disastrous appearance before the Hayne banking royal commission last year, Henry was convinced that he had done
14
ASIC prepares for HEM 2.0
Via AFR: The Australian Securities and Investments Commission (ASIC) has released updated guidance on how banks should verify customers living expenses before lending, to meet its expectations regarding the responsible lending laws. Lenders using the Household Expenditure Measurement (HEM) as a benchmark will need to apply a “reasonable buffer” reflecting the benchmark is too low.
3
RBNZ exposes corrupt APRA on bank capital
By Leith van Onselen The Reserve Bank of New Zealand (RBNZ) clearly does not trust APRA to do its job and protect the economy. Because the RBNZ has launched a proposal to raise tier 1 regulatory capital held by the banks to 16%: Under the proposal, over five years or so, banks’ Tier 1 capital
9
Recessionberg tightens Hayne screw with new review
If you thought the banks were about release the spiggot on credit think again, via the AFR: The federal government has told the banks and regulators there will be a fresh industry inquiry in three years to ensure they have improved their behaviour and are treating customers better. Treasurer Josh Frydenberg wrote this week to
57
Labor pushes for massive banker penalties
From SBS News: Bankers found guilty of serious corporate crimes could be jailed for up to 15 years and shonky corporations may face fines of up to $525 million, under legislation proposed by Labor. In the wake of the damning banking royal commission, the federal party wants to significantly increase penalties against financial institutions who
10
Mad Macquarie backs mortgage brokers
Well…of course it does. It doesn’t have any branches to distribute its mortgages, via The Australian: Macquarie chief Shemara Wikramanayake has backed the role mortgage brokers play for borrowers, acknowledging that the Hayne royal commission would prompt smaller banks to rethink distribution and more closely assess what customers would pay for loans. Commissioner Kenneth Hayne’s
19
I hope ANZ doesn’t believe its own economist
It shouldn’t because he’s talking nonsense. Via Bluenotes: The fall in Australian house prices in 2018 was the largest since the financial crisis. But the implications for the broader economy are more important. It’s even possible that weaker house prices and a weaker economy combine into a negative feedback loop (although in my view this is unlikely). “All previous periods of declining
27
Macquarie hikes mortgage interest rates
Funny stuff in a carrion comfort kind of way, via AFR: Existing owner-occupier variable rates with principal and interest payments will rise by six basis points and those with interest only by 16 basis points. The hikes, which apply from February 21, impact all loan to value (LVR) bands. As mortgages and house prices crash.
24
Corrupt mortgage brokers launch absurd banking devils ads
This is a new low in political economy stupid: Mortgage brokers are a con. Their brand of competition is simply to destroy lending standards and fuel absurd property prices out of which they take massive and conflicted trailing commissions. UBS research found that brokers “a statistically significantly higher level of factual inaccuracy via the broker
32
Property Council PM backs mortgage broker locusts
By Leith van Onselen Prime Minister Scott Morrison gave a National Press Club address yesterday, where he defended the mortgage broking industry against the Hayne Royal Commission’s recommendation to overhaul mortgage broking from a commission-based to a user-pays system: “The mortgage brokers understand, with the cautious way we’ve responded to the report, that we understand
42
Alan Kohler: Let mortgage brokers die
By Leith van Onselen The mortgage broker locusts continue to swarm the Hayne Royal Commission’s recommendation to overhaul mortgage broking from a commission-based to a user-pays system. Mark Bouris – executive chairman of Yellow Brick Road – claims that the reforms will kill the mortgage broking industry, erode competition, and drive mortgage rates up: Buying
17
ASIC moves to outlaw the HEM
The most important economic finding of the Hayne Royal Commission is under the pump today, via Domain: The corporate regulator will ask the government to change mortgage rules that could make it harder and more expensive for borrowers to get a new home loan if it loses a landmark case against Westpac over responsible lending
10
NAB should avoid Mike Baird like the plague
Mike Baird appears to be firming as the favourite to replace Andrew Thorburn as NAB CEO, via UBS: Following the negative comments by Commissioner Hayne in the Royal Commission Final Report NAB announced the resignation of both the CEO Andrew Thorburn and Chairman Ken Henry. NAB announced that well regarded and highly experienced Phil Chronican
1
Hayne reverses bus over Professor Harper speed hump
Professor Ian Harper has had better weeks. First, as the Reserve Bank’s micro-economic patsy, he was thrown under the interest rate bus to set up Phil Lowe’s elegant back flip with pike: The clearest indicators of ongoing momentum of Australia’s economy are strong employment growth and a rapid shift in the federal budget toward surpluses,
52
NAB halted as executive changes arrive
At least we hope they’re resigning, via Bloomie: National Australia Bank Ltd. shares were halted from trading pending an announcement on leadership changes. The announcement, expected later Thursday, comes amid speculation Chief Executive Officer Andrew Thorburn and Chairman Ken Henry may be ousted after being sharply criticized by the financial industry misconduct inquiry, which questioned
22
Heat intensifies on disgraced NAB duo
Shareholders started it last year when they rejected Ken Henry’s remuneration plan by an astounding 88% majority. Hayne made it worse when he picked them out of a line-up: NAB also stands apart from the other three major banks. Having heard from both the CEO, Mr Thorburn, and the Chair, Dr Henry, I am not
10
Can rate cuts save house prices this time?
Another bank is blaming poor mortgage demand today for falling house prices. This time it is CBA, at the AFR: “The facts are: our approval rates are unchanged over the last 12 months; our time to get a decision is the same, or slightly better, once the application goes in; [and] we have seen average
3
Pre-nationalisation Genworth soars as it hoses away capital
Sometimes markets are bizarre. Take the case of mortgage insurer GMA today: There’s nothing overly interesting about its year end accounts though delinquencies are still rising. But check out its economic assumptions: This is a fading fiction. Unemployment is going to rise and wages fall. GMA’s delinquencies are going to rise too. But what matters
15
Canberra splits on mortgage broking future
Via the AFR: The biggest split is over mortgage brokers after the government baulked at the key recommendation in which the borrower, not the lender, would pay the broker the fee for arranging a loan. Another is the recommendation to apply responsible lending laws to point-of-sale retailers, such as car dealers. Labor agrees with the
14
As Hayne fades, mortgage rate hikes appear
CBA’s half year result is out today and it reeks of coming mortgage rate hikes: Unexciting at best: falling revenue; falling ROE; falling NEM; rising bad debts 15bps or $577m (vs consensus 13bp) and NPLs 89bp (vs 85bp) NPAT boosted by cost cutting; dividend stalled and broker write downs ahead. Mortgage rate hikes are inevitable
124
ACTU: Henry, banks, Scummo colluded to shape Hayne
Is this why Justice Kenneth Hayne was so disgusted at the handover of his report? Via Sally McManus on Twitter: EXPOSED: ACTU uncovers secret letters between the big banks and Scott Morrison https://t.co/RSn0Uu6nLx — Sally McManus (@sallymcmanus) February 5, 2019 What on earth happened to the once lovable Ken Henry?