Day 460: 'Not showing any signs'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 460.
Today in summary: Suncorp welcomes the Council of Financial Regulator’s view on small business, and vows to lend more to the sector; NAB gets the jitters on self-manager super fund lending just as the government stands by it; and Labor promises A$60 million from the Banking Fairness Fund for affordable loans.
-- Charis
Current banker panic level: 🤑😫 😉
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Suncorp has welcomed the decision by the Council of Financial Regulators not to back a change recommended by Commissioner Hayne on the definition of small business for borrower protection purposes. The bank had been actively campaigning for the retention of the A$3 million threshold for defining small business in the Banking Code of Practice.
It pledged A$3 billion of new credit for the segment, but continued to call for a level playing field in the amount of capital banks are required to hold.
“We are proud to support Australian farmers and small business owners but when we do, as a non-major bank, Suncorp needs to allocate more capital against these loans.”
NAB has become the latest bank to get the jitters on property lending, stepping up the requirements for self-managed super funds looking to borrow to invest in bricks and mortar. The tightened requirements include that the customer must have had a relationship with the bank for at least two years, along with cash reserves in the fund to cover 12 months of repayments, reports the AFR.
CBA, Westpac and AMP pulled out of SMSF lending last year, and they were joined by Macquarie Bank this week, amid increased regulatory concerns and falling property prices.
Meanwhile, the government is standing by leveraged SMSF loans, despite today’s report from the Council of Financial Regulators suggesting their preferred option would be to ban limited recourse borrowing arrangements.
Labor has pledged A$60 million from the Banking Fairness Fund to help Good Shepherd Microfinance make more loans. The opposition criticised the government for not moving ahead with the recommendations of the small amount credit contracts review in 2016, arguing those in a temporary financial crisis often succumbed to high-interest products.
“This funding boost will open up microfinance to 307,000 new clients delivering up to 76,800 new low cost loans to Australians in financial hardship each year.”
Coming Up
APRA chairman Wayne Byres is speaking at Australian Financial Review’s forum for banking and wealth leaders, regulators, policymakers and stakeholder groups to debate the future of financial services next week. More details here.
Today’s burn prize: Former Westpac chairman Ted Evans
🔥🔥🔥
“He’s not showing any signs of being up to it, frankly.”
Evans was asked if Chris Bowen cold be a reforming Treasurer like Paul Keating.
The Commentariat
Grillings of bank chiefs by parliamentarians are a waste of time writes The Australian’s John Durie, now that the Hayne Royal Commission has taken place.
“Bank bosses are now well practised at such public hearings.
“While the public is interested in progress in implementing royal commission recommendations, most would prefer to see that in practice rather than at parliamentary hearings.”