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.

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Fitch: Mortgage arrears worsen a touch

From Fitch just now: Fitch Ratings-Sydney-19 June 2013: Fitch’s Dinkum Index, which records 30+ days delinquencies in the Australian prime RMBS sector, remained largely stable in a low interest rate environment, with 30+ days arrears increasing by 2bp to 1.48%. Q113 saw 30-59 and 60-89 days arrears increase by 4 and 3bp respectively, while 90+

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Will the mining bust hit banks?

A couple of stories today raise questions about the possible transmission of a mining bust into bad loans for banks. At the AFR,  the news is good: The head of business banking at National Australia Bank, Joseph Healy, says a slowdown in the mining sector is yet to trigger an increase in bad debts. Mr

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Macquarie calls time on Aussie bank yield rally

By Leith van Onselen Macquarie bank has called an end to the Big Four Aussie banks’ yield driven rally following expectations that the US Federal Reserve will reduce its quantitative easing program. From Interest.co.nz: …with financial markets undergoing a shift as investors speculate on the Fed tapering off its QE programme, the Macquarie analysts note

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AFR erases Australia’s shadow banking history

The usually sound Jonathon Shapiro at the AFR, today does a royal gloss job on the history of Australian shadow banking: The term “shadow banking” is being uttered with increased frequency by politicians and central bankers as they sound warnings about the next big scourge on the stability of the financial system. Clearly, there’s a dark

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Moody’s brings Cyprus downunder

From Moody’s this morning come news of a possible downgrade for Australian banks in what looks to be blow back from Europe and Cyprus in particular. While it does not have an immediate direct impact on bank creditors one wonders how long senior unsecured debt holders, who are subordinated to both deposits less than $250,000 and

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Uncovering Australia’s sub-prime mortgage lending

By Leith van Onselen Last year, The Australian newspaper published some great articles questioning the commonly held view that Australia’s banking sector is conservative. In April 2012, The Australian uncovered how Australia’s largest banks were being forced to forgive mortgage debts of borrowers granted loans based on falsified or fraudulent information supplied by mortgage brokers.

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Deposit growth eases

APRA has released April deposit growth figures and we are seeing possible stabilisation at around the 7% year on year level, though the down trend is intact:   Months on month is still trending down as well:   And the aggregate growth rate leveling off:   Still, at least growth did not show any adverse

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CBA disappoints

CBA is out with it quarterly update this morning and although the result is in line it is not glowing. From Credit Suisse:   Cash earnings of circa $1.9bn (Credit Suisse 2H13E run-rate $1.914bn; consensus $1.900bn); Reported Profit circa $1.9bn Revenues: 1) CBA stated that trading income 3Q13 “was at a level consistent with the 1H13 run-rate”;

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Fitch warns on bad loans over mining cliff

From Fitch: Recent results at the four big banks were strong, and such consistent earnings are one of the sector’s key rating strengths. Such earnings performance, together with surplus capital and conservative loan provisions, provide substantial buffers to absorb pressure on earnings in a modest downturn – which is already factored into our ratings. The operating

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ANZ goes 27bps!

From our second RBA today comes the news that they’ve added on 2 basis points to the RBA cut: ANZ May 2013 Interest Rate Review – Reduces variable mortgage rate by 0.27%pa – ANZ today announced it will lower interest rates for variable rate mortgages by 0.27%pa following its monthly interest rate review. Effective Friday

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Citi: Regulatory risk rising for banks

Oh yeh, now we’re getting somewhere. The early moves are starting to grasp that the MB agenda for rates cuts and macroprudential policy  as solution for Australia’s looming economic ills has an implicit logic. Logic that can’t be denied forever. From Citi: RBNZ mortgage RWA adjustments highlight rising regulatory risk – the RBNZ today announced

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Pascometer burns red on bank bubble

Regular readers will know that the MB office has a red warning light on the ceiling for trade timing. Called the Pascometer, it is a remarkably useful gauge of when to sell out of an asset, just as Michael Pascoe tells you to buy. Today the Pascometer flashes red on the bank bubble (h/t The

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Bank boom and bust

There was more creepy coverage of banks at the AFR over the weekend. First was Matthew Stevens: The global financial crisis and the frightening structural risks and uncertainties it triggered appear to be over at last. Only three days after ANZ Banking Group lifted its dividend ratio, Westpac added shareholder-sating sparkle to its own increased interim

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Genworth mulls self harm

From the AFR: US-listed Genworth Financial is seeking “more evidence of a good IPO market” in Australia as the company continues to mull an $800 million partial float of its Australian operations. Chief executive Thomas McInerney told analysts that Genworth had not seen a lot of initial public offering activity in Australia. The local division’s

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Australian deposit growth firms in March

APRA has released its monthly banking statistics for March and growth improved slightly on the month to 0.6%, the best score this year: It is good to see life in the market despite the lure of rising asset prices. Still, the trend towards lower growth is well intact in the year on year chart at

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ANZ delivers

At least that’s the verdict of Credit Suisse with the half year result today: Event: ANZ reported (company defined) cash earnings of $3,182mn (up 10% on $2,896mn 1H12) 2% short of our top of market $3,253mn estimate but 1% better than the $3,135mn consensus average. Interim DPS of $0.73 (up 11% on the $0.66 pcp)

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Moody’s downgrades QBE

From Moody’s today comes a not unexpected downgrade for QBE. The negative outlook is a bit more surprising: New York, April 21, 2013 — Moody’s Investors Service has downgraded the issuer and senior unsecured debt ratings of QBE Insurance Group Limited (QBE; QBE.AX) to Baa1 from A3. The action completes a review for downgrade initiated on

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RBA: Bank offshore borrowings won’t increase

By Leith van Onselen The Q&A session of Tuesday’s speech by RBA Assistant Governor, Guy Debelle, contained an interesting tid-bit on bank offshore borrowings, which Debelle believes will not grow from their current level, and might even fall slightly, over the foreseeable future: Certainly, Debelle’s comments that bank offshore borrowings have peaked are backed-up by