Day 477: 'Dealing with a big mess'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 477.
Today in summary: NAB may be negotiating to sell its New Zealand business to Partners Life, COBA is urging Australia’s political candidates to commit to improving competition in the banking sector; and a Senate committee recommends another industry levy on banks.
-- Alex
@AlexESampson
Current banker panic level: 🤫🧐🤑
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The Australian is reporting that speculation is mounting that NAB has been negotiating to sell its New Zealand business to Partners Life, pushing it ahead on the pack on divestment. In 2016 NAB sold 80% of its MLC life insurance arm to Nippon Life, Japan’s largest life insurance company by revenue. In February plans to float MLC were pushed back until 2020.
In other divestment updates, a month after CBA announced it was pausing its divestment plans to deal with the royal commission’s recommendations, ANZ and Westpac’s divestment plans have also stalled.
The Customer Owned Banking Association is urging Australia’s political candidates to commit to improving competition in the banking sector ahead of the Federal election. The body today released its “roadmap to fix competition issues in banking sector”, which has four steps, each including a series of recommendations.
COBA chief executive Michael Lawrence said:
“Without robust competition, the ‘Big Four’ will continue to put their customers last.”
The report on the resolution of disputes with financial service providers within the justice system has recommended the government establish an industry levy, similar to Labor’s proposed A$640 million banking 'fairness fund'. The levy would apply to the largest financial institutions on the ASX, and would raise funds for the legal assistance and financial counselling.
The Senate Legal and Constitutional Affairs References Committee today released its final thoughts after a series of hearings where people who gave evidence overwhelmingly recommended more funding for legal assistance and financial counselling, saying general legal services were out of reach for many and already swamped with financial cases. The committee also recommended the Australian Financial Complaints Authority’s membership extend to debt management firms, registered debt agreement administrators, 'buy now pay later' providers, fintechs and emerging players, small business lenders and professional indemnity insurers of financial service providers.
Today’s burn prize: Senator Chris Ketter
“How much longer before you finalise your implementation plan?”
Ketter was questioning Treasury’s Financial Services Reform Implementation Taskforce chief adviser James Kelly about the Government’s timeline for implementing the banking royal commission recommendations, given it is now more than two months after the final report was released. Kelly replied that some may take up to three years 🙄.
The Commentariat
Bank buster Adele Ferguson writes in the Australian Financial Review that financial services giant AMP has its work cut out for it combatting losses from “a battered reputation and trust issues” in the wealth sector.
“At the end of the day, AMP is still dealing with a big mess. It is fighting multiple class actions, a share price that has more than halved in the past year, huge profit falls and a savage cut to its dividends. There are also questions over its long-term strategy, which is yet to be laid out.”
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