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.

19

Specialist Chinese-language mortgage broker lists

From Banking Day: Specialist Chinese-language mortgage broker N1 Loans has closed its initial public offering, raising equity capital of A$5 million, and will list on the Australian Securities Exchange on March 18. N1 plans to use the proceeds of the float to help invest in a more prominent online presence and increase its marketing activity.

5

CLSA: Sell banks into rally

From Brian Johnson at CLSA, the best in the business: BJ notes that having significantly underperformed since the peak in April 2015 the Australian banks have rallied hard in late February/early March 2016 with the rally likely reflecting a prior degree of “over-shorting” and easier global credit conditions. That said, Australian bank funding costs, both

14

Would you like a free car with that flat settlement?

From the AFR: Lenders are increasingly nervous about lucrative incentives being offered by developers to off-the-plan buyers struggling to pay their deposits, according to lenders and property specialists. Rebates, special conditions, furniture, televisions and cars are among the inducements offered by some developers to ensure that buyers, who typically made a deposit when the project

3

Mirabile dictu: A bank gets a sell rating!

From CLSA: ASIC have commenced proceedings against ANZ for alleged market manipulation in setting the bank bill reference rate on 44 separate days between 9 March 2010 and 25 May 2012. ANZ have rejected the assertions and will vigorously defend itself effectively claiming that “our practices in the BBSW market were consistent with Australian market

16

Blackrock steers clear of “worrying” Oz bubble debt

From The Australian: A New York-based portfolio manager with the world’s biggest investment management company has described the Australian banks’ exposure to the local housing market as “a little worrying,” expressing concern that the rising levels of household debt in Australia continued to buck global trends. Justin Christofel, manager of the BlackRock Global Multi-Asset Income

4

Yet more evidence of dodgy brokers

Cross-posted from Martin North: My post yesterday “The Truth about Mortgage Brokers” created quite a a number of requests for more information, especially around my comment that broker originated loans tend to have higher loan-to-income and loan-to-value ratios compared with bank originated loans. So today, I am posting further data on these two dimensions, drawing