Day 537: 'It’s a horrible job'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 537.
Today in summary: The Victorian Government and the super sector have launched a A$250 million growth fund to invest in SMEs; though slow to respond, the smaller banks are dropping rates like they’re hot; and Up Bank, AirWallex and Afterpay are among the winners of the 2019 FinTech Australia Finnie awards.
-- Alex
@AlexESampson
Current banker panic level: 🤑🤑🤑😎
Please don’t keep The Inquisition to yourself. Forward this email to your colleagues and encourage them to sign up for free here.
The Victorian Government has partnered with the superannuation sector in a A$250 million fund to invest in small and medium businesses because conventional funding has “pretty well dried up”.
Victorian Treasurer Tim Pallas today announced A$50 million toward the Victorian Business Growth Fund which will invest in SMEs that have been identified as being able to improve the performance of the Victorian economy. The remaining A$200 million will come from First State Super and VicSuper. The Fund will be the largest of its kind in Australia, trumping the Coalition’s proposed Australian Business Growth Fund, announced last month.
A full three days after the Reserve Bank announced the first rate cut in nearly three years, and the big banks revealed their responses, the smaller banks are dropping rates like they’re hot. BankWest yesterday announced it would follow its parent CBA and pass on the full cut of 0.25%, effective June 25.
AMP Bank and ME Bank will drop all variable rate home loans by 0.25% a year. Bendigo Bank said it would not pass on the full cut, only decreasing its variable interest rates by 0.20% a year and interest only variable term loans by 0.15% a year, putting it in the company Westpac and battered ANZ. ANZ claims the bank couldn’t pass on the full rate because it was poor from implementing royal commission recommendations.
Up Bank, AirWallex and Afterpay were among the winners of the 2019 FinTech Australia Finnie awards last night. Up Bank and AfterPay took home two awards each. AirWallex won three awards, including “Biggest Raise of The Year” for its A$141 million capital raise in March.
Afterpay was named “Fintech Organisation of The Year” for the third year in a row. “Emerging FinTech Organisation” of the Year” went to Athena Home Loans. “Emerging FinTech Leader of the Year (under 35)” was awarded to Jessica Ellerm from digital super fund Zuper. The award for “Excellence In Consumer Lending” went to peer-to-peer lending service Wisr.
🔥🔥🔥
Today’s burn prize: Risk-management expert Dr Pat McConnell
“They are paid well, are not liked by most businesspeople and if anything goes wrong they are the first ones out the door. It’s a horrible job.”
McConnell didn’t hold back when referring to chief risk officers at banks. He said the banks’ track record of risk management was atrocious and the job of fixing the problem was a rough one.
The Commentariat
BoQ’s new CEO George Frazis has his task cut out, writes The Australian’s senior banking report Joyce Moullakis.
“A key priority for Frazis will be to appoint a permanent executive to run BoQ’s business banking operations. BoQ’s business division had higher total income — at $287 million — in the bank’s interim results than the retail unit. The business division also delivered positive loan growth across its product lines.”
It is no wonder investors are shopping around for higher yields, according to fixed-interest specialist Elizabeth Moran in The Australian.
“Rate comparison site Canstar shows the best rate for a major bank term deposit over one year based on a $10,000 investment is just 2%. Worse, if you invest for a longer term of five years — where you would usually expect higher returns — you can still only get 2 per cent per annum. Annualised inflation of 1.3% means a 2% return is paying a mere 0.7% in real terms.”
This is an introductory service while we’re building a comprehensive daily paid online publication, coming soon.
We’re not here to offer opinion, simply to cut through the noise, and help you make sense of the emerging policy and market trends you need to be across. We call it pure intel. You can read more about us here.