Australian banking major was warned over a year ago that its IT systems were under intense pressure and could buckle.
The bank was warned by consultancy firm Ernst & Young, which had been hired to analyse the company’s operations, and who then spent many months studying the lenders Information Technology systems, concluding that ANZ could save as much as $70 million by consolidating its platforms onto Oracle.
Market regulator ASIC is requiring that credit ratings agencies operating in the country will now be forced to issue compliance reports which detail their obligations relating to the integrity and quality of their ratings process, and how they are managing any potential conflicts of interest that may exist.
The Australian Securities & Investments Commission on Wednesday released a consultative paper designed to boost the integrity of the financial system by requiring credit ratings agencies to lodge annual compliance reports with it every year. ASIC has given market participants until July 13th to respond to the paper, after which it will begin the process of implementing an annual compliance reporting schedule.
After being downgraded by credit ratings agency Moody’s Investor Services last week, the major Australia banks may find themselves the target of short selling by global hedge fund managers.
Flooding in Queensland and higher interest have taken their toll on the market for housing in Australia which saw finance for home loans in March fall to a 10 month low, suggesting that the property market will remain flat throughout the rest of the year, particularly since the prospect of even higher interest rates loom.
The competition regulator is considering market concerns over the creation of a credit agency that will be part owned by the major Australian banks.
The major lenders will each own a four per cent stake in a joint venture to be called Experian Australia Credit Services, the remaining 76 per cent of the venture will be held by Britain’s Experian group.
Australian banking major CBA says it expects at least one if not two more official interest rate hikes over the next half year, which the lender says it will pass on to its mortgage borrowers.
A Senate committee has rejected a key banking reform proposed by Federal Treasurer Wayne Swan, saying that the government must reconsider its proposal seeking to ban mortgage exit fees.
The Senate economics committee inquiry into competition in the banking sector said that the ban on exit fees may well result in less competition and higher upfront fees.
Noted banking analysts James Ellis and Jarrod Martin of Credit Suisse say that the trend of rising arrears in mortgages reported by the major Australian banks during earnings season is unlikely to have a significant impact or result in losses.
In its review of half year results Credit Suisse said that the overall asset quality for the major lender had suffered from “modest” deterioration, with all lenders suffering from increased impairment with the exception of ANZ.
Ted Evans, chairman of Australian banking major Westpac will retire after the lender’s annual general meeting which is scheduled for December, and is set to be replaced by Lindsay Maxsted, the current chairman of the board’s audit committee.
Mr. Evans assumed the chairman’s role in 2007, having joined Westpac in 2001. He successfully helped guide the bank through its transformative acquisition of St George, as well the global financial crisis.
Mike Smith, chief executive of Australian banking major ANZ says he is increasingly concerned that consumers will start to struggle to repay their loans against a backdrop of ever higher interest rates.
Mr. Smith said that he was worried about the quality of credit since people had stopped making payments on their credit card debt. The ANZ chief added that the trend was strange since poor credit quality usually only occurred during periods of high and rising unemployment.