Day 547: 'We are disappointed'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 547.
Today in summary: NAB wants the federal government’s A$1 billion Business Growth Fund to be up and running by the end of the year; ANZ’s New Zealand boss David Hisco has left the bank over an expenses controversy; the Insurance Council of Australia is shirty about APRA’s proposed 2019-20 levies; NAB will introduce stricter guidelines for the “Bank of Mum and Dad”; and Tasmanian bank MyState has divested its retail financial planning arm.
-- Alex
@AlexESampson
Current banker panic level: 🤑🤑🤑🧐👋
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NAB executive Anthony Healy wants the federal government’s A$1 billion Business Growth Fund to be supported by banks and running by the end of the year. The fund has been designed to provide a new way for Australian SMEs to receive long-term equity capital to grow their businesses.
“We take confidence from the United Kingdom and Canadian Business Growth Funds having operated successfully for several years,” a NAB spokesperson said.
Last month NAB told Australian Banking Daily it had been chairing an industry working group to progress the fund and encouraged other financial institutions who had not participated in the working group to join.
ANZ’s New Zealand boss David Hisco has left the bank over an expenses controversy. The bank also said Hisco left because of health issues.
Mr Hisco had recently been on extended sick leave. It has been reported Hisco was involved in a dispute over using a chauffeur service for personal purposes.
Managing director of retail and business banking Antonia Watson has been appointed acting CEO.
The Insurance Council of Australia is displeased by APRA’s proposed 2019-20 levies for the sector, saying the charges are rising at a higher annual rate for general insurers than banks. The prudential regulator wants A$30 million from general insurers via the annual supervisory funding levy, and submissions on the move were due on Friday.
From Monday, NAB will reportedly introduce new guidelines for the “Bank of Mum and Dad” that respond to the requirements of the new Banking Code of Practice, which comes into effect on July 1. Loan guarantors will face improved scrutiny of their suitability for the role, having to prove they’re aware of the responsibilities.
This comes as mortgage delinquency rates in Australia are likely to increase in coming quarters due to high debt levels and the number of interest-only mortgages converting to principal and interest loans, according to ratings agency Moody’s.
Even the little banks are moving away from vertical integration. Listed Tasmanian bank MyState has divested its retail financial planning arm for A$3.5 million. That’s A$1 million more than what CBA sold Count Financial for last week. Listed company Fiducian Group (which has more than A$2.6 billion funds under advice) bought MyState and its book of clients with A$340 million in funds under advice. The sale is due to be completed by June 30.
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Today’s burn prize: ANZ New Zealand chair Sir John Key
“We are disappointed David is leaving ANZ under such circumstances after such a long career, however his departure is the right one in these circumstances given the expectations we have of all our people, no matter how senior or junior.”
Key was addressing the departure of ANZ’s New Zealand boss David Hisco over concern about the characterisation of certain transactions following an internal review of personal expenses.
The Commentariat
The Australian’s senior writer John Durie argues the latest bungle at ANZ — the departure of its NZ chief David Hisco — proves that bank culture is slow to change.
“In the wake of the Hayne royal commission, shareholders want accountability for executives who have failed to perform. Short-term bonuses are a case in point and in the last two years, in what could only be described as terrible years for the bank, Hisco picked up A$1.4 million in short-term bonuses plus an annual salary of A$1.2 million and A$465,000 a year to cover expat expenses like school fees, flights home, rent and the like.”
Interest rates are going down, but how low can they go, writes ABC business reporter Stephen Letts.
“It is the big question on interest rates being asked of central banks mired in a world of low inflation and less than robust growth. The US Federal Reserve's Open Market Committee (FOMC) meets this week and may knock rates down another peg.”
Andrew Robertson examines whether superannuation and retirement income tweaks are on the re-elected Morrison government’s radar, arguing there are 11 pressing issues around retirement incomes a comprehensive inquiry could look at.
“The superannuation system is nothing if not generous, but it's a huge drain on the federal budget and, it could be argued, very unfair.”
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