Australian banking major National Australia Bank (NAB) has been downgraded by a second broker following its failed acquisition attempt of Axa Asia Pacific Holdings (APH).
Earlier in the week, Macquarie downgraded NAB to “neutral”, whilst on Thursday UBS followed suit and also downgraded the lender to neutral from “buy”. Jonathan Mott UBS banking analyst said that NAB’s stock price now traded in line with UBS’s valuation, following the competition regulators decision to deny permission for the lenders proposed acquisition of APH.
One of the worst features of credit cards is what is known as negative payment hierarchy. An example of this if the borrower undertakes a balance transfer to a zero balance account, the interest on the balance transfer is zero, whilst if the borrower uses the same card to make a new purchase, that purchase will attract interest.
Negative payment hierarchy is when credit card companies use any payment made to pay off debt which is accruing at low or zero interest, whilst the debt which carries higher interest continues to accrue charges at the higher rate.
Australia’s largest lenders have begun their discussion with the Federal Government on the proposed crackdown on credit card fees which became an election issue.
According to The Australian, senior executives from CBA held meetings with government officials soon after the new government was sworn in over two weeks ago. The newspaper said the discussion was wide ranging covering credit cards to the broader financial system.
Australian banking major, and the nation’s largest mortgage lender CBA has joined the chorus warning that Australian households and businesses could face the prospect of higher interests, which could be tightened by the central bank as early as next month.
Australia’s fourth largest bank NAB warned mortgage borrowers that they should be prepared for a hike in interest rates next month. NAB says it now believes that the central bank will tighten interest rates by 25 basis points, lifting the official interest rate to 4.75 per cent when it meets on October 5th.
Not all analysts believe that rates will rise next month, but there is broad consensus that interest rates will be hiked before the end of the year. Alan Oster, chief economist from NAB said that the central bank’s tone in recent communication suggests that a rate hike is imminent.
Australian banking major ANZ says it will defend itself vigorously defend itself from what is widely expected to become a number of class action law suits. Proceedings for litigation which seek the recovery of over $250 million from 12 banks for overcharging on fees has been initiated.
Maurice Blackburn the law firm representing the class action litigants, filed its case in Federal Court on Thursday with a $50 million claim plus interest on behalf of 27,199 claimants who hold approximately 40,000 accounts with ANZ.
Global banking giant HSBC has upgraded its Australian economic growth forecast, but also says it expects that interest rates will rise by at least 100 basis points during 2011.On Tuesday the banking giant predicted that the Australian economy would expand by as much as 4.1 per cent during 2011.
Despite the optimistic outlook for the economy, the buoyant outlook was tempered by the prediction that interest rates may have to be raised by 100 basis points to keep inflation under control. HSBC’s growth forecast exceeds many of the official predictions, which have the economy pegged at growing between 3 and 3.5 per cent.
As many as five Australian lenders could be on the receiving end of legal action during the next few months as a multi-million dollar class action law suit is initiated.A $50 million law suit which alleges that Australian banking major ANZ charged its customers excessive exception fees during the last six years was filed in a Federal Court in Melbourne on Wednesday.
The legal action was initiated by Maurice Blackburn a law firm, which filed a claim on behalf of 27,000 bank customers holding over 40,000 accounts with ANZ.The case has become a cause célèbre for both consumer groups and activists who have urged more banking customers to join the suit.
Ralph Norris, chief executive of Australia’s largest bank, Commonwealth Bank of Australia is the highest paid CEO in the country after his pay packet was increased by 75 per cent to $16.2 million.
Mr. Norris’s pay packet exceeds the likes of Westfield Group founder Frank Lowry who earned $16 million and BHP Billiton’s chief Marius Kloppers who made $12.6 million. Mr. Norris’s closest rival in the banking sector was Mike Smith, chief executive of ANZ, who took home $10.9 million and Gail Kelly, the Westpac chief who earned $10.6 million.
There is an emerging battle occurring in the mortgage lending market as Australian lenders barter with their customers, offering incentives such as under the table discounts as the price war with international lenders intensifies.
As banks globally recover from the financial crisis, they have begun re-introducing home loans that require low deposits, a product which all but disappeared during the global financial crisis.