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Australian Banks Continue To Battle For Deposits By Offering High Introductory Rates
Australia’s largest banks are using high introductory online savings rates to attract retail deposits and expand their deposit bases. Despite the high introductory rates, the lenders later aggressively cut back their deposit rates in order to preserve their profit margins.
The investment bank Macquarie conducted an analysis of the online savings market which found that the big four Australian lenders, as well as some international rivals were offering introductory rates that were as much as 200 basis points higher than the 4.5 per cent official cash rate.
QBE Denies Chief Executive To Step Down
Australian insurance major QBE has moved to end speculation that its chief executive is poised to step down. QBE chief Frank O’Halloran has run the company for the last twelve years, and the insurer says that he would continue in that role “for the foreseeable future”.
Rumours of Mr. O’Halloran’s departure ricocheted around the insurance industry this week, when speculation began to emerge that Mr. O’Halloran would hand over the reigns of the company to Peter Harmer, a senior executive at insurance broker AON.
Research Firm Says ANZ Offers Best Value For Small Business
Australian banking major ANZ, has been named by a financial research firm as the lender which provided the best value banking service for small business. Despite the accolade, ANZ has not managed to convince all the decision makers in the business sector, and still lags behind rivals.
Canstar in issuing the award said certain product features that matter a great deal to small business provided by ANZ including credit facilities and loans.
But this has yet to translate into higher customer satisfaction levels with the bank.
JP Morgan To Cease Proprietary Trading
Global banking giant JP Morgan has apparently decided to close down its proprietary trading operations, sources from within the bank say. According to an unnamed source quoted by Dow Jones, JP Morgan has issued notice to approximately 20 proprietary traders that trade commodities.
JP Morgan has never had a huge focus on proprietary trading, and it’s prop trading desks have tended to be small. Nevertheless those desks have been affected by regulatory reform and in particular the Volcker Rule, which forbids banks from proprietary trading, proprietary investments in hedge funds and private equity.
Australians Believe Not Enough Competition In Banking
A survey undertaken by Australian wealth manager AMP suggests that nearly 78 per cent of all Australians believe that acquisitions by banks should be restricted.It is no coincidence that the survey results were released on the eve of the ruling by the competition regulator on National Australia Bank’s proposed acquisition of Axa Asia Pacific Holdings.
According to the AMP survey, an overwhelming majority of 71 per cent of people polled say they believe that there needs to be increased competition within the Australian financial services sector.
APRA Issues Stern Warning To Australian Deposit Taking Institutions
The Australian Prudential Regulation Authority, the country’s banking regulator has issued a stern warning to Australian deposit taking institutions. APRA is unhappy with the way some firms account for and treat subordinated tranches of residential mortgage-backed securities, warning that some firms may have to change the way they do so.
APRA is unhappy with the way some firms account for and treat subordinated tranches of residential mortgage-backed securities, warning that some firms may have to change the way they do so.
Moody’s Says Outlook For Australian Mortgage Backed Securities Stable
The collateral used to construct Australian residential and commercial mortgage backed securities has a stable outlook according to a credit ratings agency which made its assessment following Australian investment banking major Macquarie pricing a $750 million offer.
Global credit ratings agency Moody’s on Thursday said it would maintain its stable outlook for the performance of collateral used to construct Australian asset backed securities over the next 12 to 18 months.
IAG Full Year Profits Slump
Australian insurance major IAG has had its bottom line severely hit by storms that have raged in Melbourne and Perth, as well as losses incurred at its UK division.
Australia’s largest general insurance company as measured by written premiums said its net profit for the year ending June 30th fell precipitously year on year. Net profit dropped from $181 million last year, to just under half, or $91 million this year, after the insurer’s UK unit generated a substantial loss, and unprecedented weather in Melbourne and Perth drove up natural peril claim costs.
Suncorp Metway Profits Jump By More Than Double
Banc-assurance group Suncorp Metway, following the lead set by the big four banking groups, posted a full year profit result that grew by more than double from the previous year.
Suncorp says it is making good progress recovering from challenges presented by the global financial crisis. Net profit for the year ending June 30th leapt to $780 million, more than double the $348 million the company made in the previous year, whilst revenue at the group rose to $15.7 billion, up from $14.2 billion last year.
Mortgage Choice Sounds Warning
Mortgage Choice, a leading Australian mortgage broker has reported a fall in annual profit, signalling the impact on the economy of the effects of a housing under-supply on the housing market.
Mortgage Choice reported a net profit after tax of $23.479 million in 2009/10, down 12.5 per cent from $26.849 million in the prior year. The company declared a final dividend of 6.5 cents, which the broker says represents a 17 per cent increase from its 5.5 cent payout in the previous year.
