Australian banks

Via Adele Ferguson, Australia’s last journalist standing: One of the country’s biggest mortgage brokers, Mortgage Choice, is in damage control as it faces an uprising from its franchisees on the back of a business model that is pushing many into financial ruin, depression and cutting corners on arranging loans.

Via Banking Day: No matter which way you cut the numbers, Commonwealth Bank should count itself extremely lucky with the A$700 million deal it has negotiated with Austrac to settle its chronic non-compliance with Australian anti-money laundering and counter terrorism financing laws.

By Leith van Onselen CBA has agreed to a $700 million settlement with Australia’s anti-money laundering regulator, Austrac, after the discovery last year of 53,000 cash deposit breaches.

Cross-posted from Martin North: The root cause of the [house price] falls is simple; credit is harder to get.

AUD is stable through the morning: Bonds are mixed: The XJO double-top is more serious again: Big Iron is down: Big Gas is down: Big Gold is down: Big Mortgage has broken support with both CBA and WBC on the wrong side of support in their huge and bearish descending triangle patterns.

Because as APRA says: The core of APRA’s mission is safety and soundness.

Via the AFR: A showdown between the Australian Banking Association CEO Anna Bligh and Australian Securities and Investments chairman James Shipton has been set for next week as the industry body pursues approval for its new code of conduct, the Hayne commission has heard.

That’s the picture painted by today’s APRA banking numbers for April.

By Leith van Onselen The Australian Securities and Investments Commission (ASIC) has told a Senate Estimates committee that its has been flooded with complaints about financial misconduct. From The ABC: Customer complaints about banks to the Australian Securities and Investments Commission (ASIC) are up almost 20 per cent in the year to April.

By Leith van Onselen Treasury secretary John Fraser appeared before the Senate economics committee yesterday, whereby he stated that the banking royal commission may lead to stricter lending standards in the sector, which could in turn potentially result in a “credit crunch”.

Cross-posted from Martin North: As we predicted, a massive class action lawsuit is being planned on behalf of “Australian bank customers that have entered into mortgage finance agreements with banks since 2012”.

Perhaps mortgage control fraud doesn’t pay in the long run, via the AFR: Lawyers’ representing up to 300,000 litigants are planning an $80 billion action against mortgage lenders, mortgage brokers and financial regulators in a class action that would dwarf previous actions.

Via our Chris today, whose royal commission objections are mounting towards jihad: Labor fundamentally undermined the integrity of the financial system by partially shifting responsibility for repaying debts from the borrower to the lender, which is insane.

Via S&P: Australian home loan arrears rose in March. The Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages increased to 1.18% in March from 1.16% in February, according to a recent report by S&P Global Ratings.

Notice the expanding number of banks turning bearish on house prices lately?

Nobody knows what LMI is: Mortgage Choice and CoreData’s new Evolving Great Australian Dream 2018 whitepaper found 42.1% of respondents said they were not sure what LMI was, yet a third (32%) said they would need to pay it in order to get into the property market.

Via Banking Day: Shares in listed mortgage broker and wealth advice group Yellow Brick Road touched a record low on Tuesday as Macquarie Group continued its sell down of its strategic stake in the company.

Westpac chairman Ken Henry yesterday entered the royal commission debate: When historians of finance look back on this period they will identify an unusual level of corporate complacency driven by relatively benign macroeconomic conditions and a long period of impressive ROE performance.

Swithed on banking at the AFR: The trail of documents used by Westpac to support a business loan for a failed franchise and led the loan’s guarantor to lose her home were haphazard, inconsistent and incomplete the Hayne royal commission has heard.

More pain for the banks today, via Chanticleer: Hodge assured those in the room and others watching the live stream that commissioner Kenneth Hayne, who built a distinguished career ruling expertly on black letter law, wants to draw out the personal and emotional impact of banking misconduct.

There is no better bellwether for Australian fortunes than the CBA.

From the last journalist standing at Domainfax: Staff fraudulently activating school kids’ bank accounts to earn bonuses isn’t a victimless crime.