The battle for deposits amongst Australian lenders seems to be petering out, with only two of the country’s top online savings accounts passing on November’s interest rate hike by the Reserve Bank of Australia, to their customers in full.
Despite failing to pass on the interest rate increase to depositors, bank’s continue to make the argument that higher funding costs are the reason behind higher interest rates which have been passed onto borrowers in excess of official rate hikes by the central bank.
Graeme Samuel who heads up the Australian Competition and Consumer Commission (ACCC) says that he would like to have prosecuted Mike Smith, chief executive of Australian banking major ANZ for what Mr. Samuel believes was price signalling that the lender engaged in 2009. Mr. Samuel says he was unable to do so because he did not have the required regulatory powers.
Mr. Samuel made his remarks whilst appearing before the Senate inquiry into competition within the banking industry, and noted that Australian banks and other businesses could engage in price signalling and co-ordination with “a wink and a nod” and without breaking the law.
Gail Kelly, chief executive of Australian banking major Westpac has warned the government that aspects of its banking reform proposal will not result in greater competition within the industry.
Mrs. Kelly made her comments whilst appearing before the Senate inquiry into the banking industry last week, and said that it would be unwise for the government to intervene in the process of fee setting by lenders as part of its proposal to do away with mortgage exit fees. Mrs Kelly also said that it was unnecessary to implement price signalling legislation.
The Australian Securities and Investment Commission (ASIC) says the concept of bank account number portability in the same way mobile phone numbers are portable is a “very good idea” and would further stimulate competition within the banking industry.
St George’s managing director for Queensland Martin Barrett has extensive experience dealing with natural disasters, experience which has come in handy whilst trying to formulate a strategy to deal with the latest flooding in Queensland. Last week St George was forced to shutter the bank’s headquarters as a result of the flooding.
“This has been an extremely difficult time for everyone in Queensland. A couple of our staff have lost their homes and others had their properties damaged. There’s a lot of hardship and we are trying to give as much support to our customers as possible.” Mr. Barrett said.
Fitch, the credit ratings agency says it believes major Australian general insurers have more than enough reinsurance to cover the claims that are expected from the flooding in Queensland which is estimated to cost Suncorp as much as $150 million.
According to the ratings agency, whilst the insured losses have the potential to escalate substantially as flooding begins to engulf urban areas such as Brisbane, the major insurers have sufficient reinsurance protection.
According to the results of stress tests conducted by the Australian Prudential Regulation Authority (APRA), Australian banks have the ability to withstand an economic shock even worse than the recession the country experienced during the 1990’s.
On Wednesday APRA said that of the 20 lenders it tested, none would fail in a bleak economic environment which consisted of high unemployment and a housing price bubble.
Australian banking major Westpac has issued a strong denial to reports that suggest the lender is looking for a replacement to current chief executive Gail Kelly. On Tuesday, Westpac said there was “absolutely no truth” to a report in the industry news letter Banking Day which said that the lenders chairman Ted Evans had given a search mandate to head hunting firm Egon Zehnder for a new CEO.
Responding to the speculation a Westpac spokesperson said the report was “completely false” and that no mandate had been issued nor any executive search firm been retained.
A survey conducted which polled call centres of Australian banks found that as many as half of all staff are prepared to help individuals who call them access financial records belonging to someone else.
Global Research a customer experience research firm undertook the survey in November, calling the call centres of eight of Australia’s largest lenders including the big four banks.
Just over ten years ago, Australia’s central bank the RBA sold off most of the countries gold reserves under the belief that the price of gold would continue to remain flat, and that as an asset, it would no longer play any role in the future financial system, or any crises that may result.
Based on the current market price of $1,400 an ounce for gold, the decision to sell 167 tonnes of the precious metal by the central bank has cost Australia approximately $5 billion.
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