Commonwealth Bank of Australia (CBA), Westpac Banking Corporation (WBC), Australia and New Zealand Banking Group (ANZ) and National Australia Bank Limited (NAB):
The Australian Competition & Consumer Commission’s year-long review of the $1.7 trillion mortgage market, tasked to the watchdog after the government slapped a $6.2 billion levy on the major banks, found that although the biggest banks didn’t specifically pass on the costs of the new tax to customers, borrowers were slugged a loyalty tax for not demanding lower rates. The ACCC said borrowers who remained loyal to lenders were paying far higher rates than newer customers, who were offered steep discounts below the headline “standard variable rate” for mortgages — at an average of 32 basis points lower — saving about $1000 a year for an average loan. These advertised standard -variable rates, the ACCC said, had no relation to the actual prices -customers paid, but were “constructs which enable each lender to make instant changes to the actual prices charged to borrowers” without having to renegotiate contracts. The regulator also hit out at the intense concentration of the four major banks, Commonwealth Bank, Westpac, ANZ and National Australia Bank, which control 80 per cent of the market.Freedom Insurance Group Limited (FIG):
Freedom Insurance’s new chairman, Pauline Vamos, has thrown her support behind the embattled company continuing as a life and funeral insurance administrator, even though the portfolio is in run-off. Ms Vamos — who joined the board last month after the abrupt exit of Freedom’s chairman David Hancock and two chief executives in quick succession — told The Australian the company had 100,000 customers and could continue in a different form. “It is an administration business now and we can operate within that framework,” she said of the company’s decision to stop selling products. “It is in run-off but it is a valuable portfolio for the customers and the shareholders.”
Goodman Fielder Limited (GFF):
Expectations are growing that the stake on offer in Goodman Fielder — one of Australia’s best-known food companies — will be acquired by its existing co-owner Wilmar International. Investment bank UBS was brought on board this year to find a buyer for the stake in Goodman Fielder owned by Wilmar’s partner, First Pacific. However, many around the market believe there remains little interest for the stake and the logical outcome will be for it to be purchased by Wilmar, which is understood to be strongly committed to the business.
IOOF Holdings Limited (IFL):
IOOF’s already savaged share price was further hurt on Monday, despite boss Chris Kelaher and chairman George Venardos deciding to step aside from their roles as they fight moves by the prudential regulator to bar them from the super industry. After a weekend of pressure from investors — including a rare public demand for action from IOOF’s biggest shareholder, Martin Currie — the company announced on Monday its wealth head, Renato Mota, would act as chief executive, and non-executive -director Allan Griffiths as chairman while Mr Kelaher and Mr Venardos are on leave. Mr Griffiths told The Australian that, despite evidence at the banking royal commission in August that Australian Prudential Regulation Authority officers had been unhappy with IOOF’s compliance with super laws for years, he was “shocked” that the regulator took action to ban Mr Kelaher, Mr Venardos and other company executives because they were not “fit and proper” people to run a super fund.
Nine Entertainment Co Holdings Limited (NEC):
Newly forged media giant Nine has taken a slide on its first day incorporated with Fairfax. Nine Entertainment shares were down 3.28 per cent to $1.62 at lunch. Last week the new-look Nine said $35 million in cost savings had already been realised on implementation, predominantly from duplicated corporate costs, sales and digital publishing. “A further c$30m (for a total of c$65m) has now been identified, $50m of which (on an annualised basis) will be realised by June 2019, less than one year after the merger announcement, with the remainder by June 2020. The rationalisation of technology costs is still largely to be addressed,” Nine said in a statement. NEC last down 3.28pc at $1.62.
QBE Insurance Group Limited (QBE):
QBE Insurance expects higher profits in 2019 aided by premium rate increases and a cost-cutting drive, which the company says will offset a larger reinsurance program to protect against extreme weather and other events. In documents lodged with the ASX yesterday, QBE said it had taken up greater reinsurance to shield against extreme and catastrophic events and was separately embarking on a three-year, $130 million cost saving drive. The company also outlined that it had sold its insurance operations in Puerto Rico, Indonesia and the Philippines, rounding out a scaling back of its geographic presence.
Trade Me Group Limited (TME):
Investment bank Credit Suisse is believed to have secured a mandate to fund at least one of the bidders in the $NZ2.5 billion ($2.4bn) competition to acquire well-known New Zealand website Trade Me. It is understood that Credit Suisse is one of the banks financing either one of or both Apax Partners and Hellman & Friedman that have put offers for the Australian-listed company. Credit Suisse declined to comment on its role in the transaction. It is thought that Credit Suisse is most likely working with the first bidder for the business, Apax, which made an approach that was announced on November 21.
Woolworths Group Limited (WOW):
Woolworths has extended a peace offering to suppliers over its initial plans to block them from essential data that tracked the sales of brands within supermarket categories. It will push back by one year the implementation of a new data-sharing arrangement and provide to suppliers some data on the performance of brands and competitors. Crucially for grocery suppliers, they will receive sales data on category volumes for each brand up until 2021 as Woolworths transitions to the new data-sharing scheme, ensuring suppliers will have up-to-date market intelligence when they sit before Woolworths buyers for range reviews. Woolworths also agreed not to increase next year the fees it charged to suppliers for data entitlements. The decision by Woolworths to ease the tight restrictions around the new data-sharing arrangements comes after many of its suppliers rebelled against the new policy that was unveiled earlier this year and set to begin from the middle of next year.
(Source: AIMS)
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