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.

71

Time to break up the CBA

It’s a rogue bank, simple as that. In the past year it has been exposed for: predatory lending; poor risk controls; fraudulent insurance; fraudulent financial advice; charging fees to dead people; manipulating BBSW; manipulating forex; money laundering for mafia and terrorists; losing 20 million accounts to god knows who, and failing to report most of

44

Credit crunch: At auction “people just stood there looking about”

The AFR has gone full blown bear: …buyers without deposits of between 25 to 35 per cent are being squeezed out of the market by the tougher lending conditions, agents claim. …Borrowers with pre-arranged credit limits are also being reviewed by lenders before a deal is settled and lending limits being lowered, following tougher analysis

52

Mortgage stress to the moon

Via Martin North: Digital Finance Analytics (DFA) has released the April 2018 mortgage stress and default analysis update. Across Australia, more than 963,000 households are estimated to be now in mortgage stress (last month 956,000). This equates to 30.1% of owner occupied borrowing households. In addition, more than 21,600 of these are in severe stress,

58

CBA secretly loses 20 million accounts

Via the ABC: The Commonwealth Bank has confirmed it lost the historical financial statements of almost 20 million accounts, but insists its customers’ information has not been compromised. The statements, containing customers’ names, addresses, account numbers and transaction details from 2000 to 2016, were stored on two magnetic tapes which were lost by sub-contractor Fuji-Xerox

8

UBS: Bank profits “soft and deteriorating”

Jonathon Mott on NAB: ONE LINER Subdued result with revenue trends continuing to slow. KEY NUMBERS (1H18) (1) Cash NPAT -17.6% to $2,759m (UBSe $2,732m); (2) Cash Basic EPS 102cps (UBSe 101cps); (3) Interim DPS 99c (UBSe 99c) RESULT HIGHLIGHTS (1H18 seq. basis) Note: There is no consensus given inconsistent treatment of Restructuring costs. (1)

36

Costello fingers moral hazard for bank debacle

Peter Costello today: When you talk about corporate Australia, when you talk about the Business Council, most people think you’re talking about the banks. The royal commission is affecting the reputation of all of corporate Australia. [banks are in] more trouble now than they were in the financial crisis. The financial system was essentially designed

41

SPLAT! CBA squashes ScoMo bug

Via the AFR: Commonwealth Bank of Australia’s new chief executive, Matt Comyn, and chairman Catherine Livingstone have pushed back on calls by Treasurer Scott Morrison for more heads to roll at the top of the bank, after the prudential regulator exposed a culture of arrogance and complacency at the nation’s largest lender. After a scathing

24

ScoMo’s banking reform paradox

The banks must shaking in their boots as ScoMo turns punitive: Treasurer Scott Morrison said he expects more high level resignations from the Commonwealth Bank following a damning report from the regulator into the culture of the bank in the wake of year’s money laundering scandal. Mr Morrison said the report by the Australian Prudential Regulation Authority should serve as

9

APRA slaps dodgy CBA with $1bn speeding ticket

APRA is out with its CBA culture review: Overview The Australian Prudential Regulation Authority (APRA) today released the Final Report of the Prudential Inquiry into the Commonwealth Bank of Australia (CBA). APRA announced the Prudential Inquiry on 28 August 2017 to examine the frameworks and practices in relation to the governance, culture and accountability within

7

Welcome to Robotbank

Last week it was lending ATMs, today it’s the whole bank. Via the Mirror: A bank has opened a branch run entirely by robots, who greet customers and manage accounts, in a world first. The Shanghai branch of the China Construction Bank (CCB) is run purely by technology – with virtual reality, artificial intelligence and

21

Evil Anna used inside influence to fiddle RC

Via The Australian and an FOI comes the lowest public figure in Australia today: The documents, obtained by The Australian today, showed a list of issues raised by the ABA in the days after a royal commission was announced by the Turnbull government in November. The letter shows Ms Bligh also she was “concerned” the

49

RC: AMP should face criminal prosecution

Gettin’ ugly now: The royal commission into banking misconduct has recommended AMP should face criminal prosecution for misleading the corporate regulator. Senior counsel assisting Rowena Orr, QC, said AMP had breached criminal provisions for misleading the Australian Securities and Investments Commission over its charging clients fees for no service. In handing down her preliminary findings,

60

Goodbye HEM, goodbye property bubble

Domainfax accidentally printed its own obituary today. It came in the form of an op-ed by Dick Bryan, emeritus professor of political economy at the University of Sydney: …the royal commission into finance is revealing that poverty is no longer just about low income. The commission has heard that Australian banks have adopted actual lending practices (as

17

UBS: Credit crunch risk rises as APRA launches macroprudential 3.0

Form UBS today, which is doing a fantastic job of pulling apart the bubble at the moment: APRA today announced plans to remove the investor lending cap… APRA today announced the removal of the 10% investor loan growth cap from Jul-18 (which had been in place since Dec-14). That said, this only applies after ADIs

28

Who needs banks when the ATM lender is at hand

Via the ABC comes more debt: The emergence of instant cash loan machines across parts of New South Wales has sparked fears about low-income families being potentially caught in a debt trap. The machines, which look like ATMs, only require identification and bank details before users are approved for cash loans almost immediately. Financial counsellors