Australian Bankers Association Launches Website for Homeowners
BANKS have taken the unprecedented step of launching a website calling on financially stressed homeowners to negotiate “hardship” packages to avoid default on their mortgages.
The Australian Bankers Association’s launch in recent days of the site shows the Big Four banks are on high alert for a rocky 2012 with a sharp rise in defaults.
Big four banks’ Credit Downgrade Threatens December Rate Cut
THE major Australian banks have had their credit ratings slashed, in a move that is tipped to dramatically reduce the chances of a rate cut being passed on in full next week.
Standard & Poor’s, the world’s biggest ratings agency, has changed its ratings criteria in response to criticism in wake of the global financial crisis in 2008, reported The Daily Telegraph.
ANZ, Commonwealth Bank, National Australia Bank and Westpac were each cut one notch to AA-minus, the fourth-highest credit rating on S&P’s scale.
Macquarie Group was cut by two levels to BBB, the ninth-highest grade. Standard Chartered Plc’s rating was increased one level to A-plus, the fifth-highest rating.
The ratings methodology, which S&P began revising after the bankruptcy of Lehman Brothers, now puts more emphasis on the strength of each nation’s banking system. Each country is assigned a grade that serves as a starting point for its banks, S&P Managing Director Craig Parmelee said November 29.
The move is tipped to pile pressure on the nation’s top banks, with the funding costs for Australia’s banks already starting to surge.
In July, a research report from Deutsche Bank suggested Commonwealth Bank, Westpac, ANZ Bank and National Australia may need to sell about $144 billion of bonds in the 12 months ending in June 2012.
The news comes as fellow ratings agency Moody’s yesterday warned that Australia’s banking system faces “crucial challenges” over the coming year, with global investors to potentially snub the banks as funding costs climb and the world economy slows.
The ratings agency has warned that the health of the system likely hinges on “how severe and how protracted any contagion from the European sovereign crisis may be”.
Senior vice president Patrick Winsbury said customer deposits had been “growing faster than loans as deleveraging continues, allowing the major banks to reduce their reliance on offshore wholesale funding”.
“The longer-term structural changes associated with increased investment in the resource sector are likely to pressure certain industries and regions, keeping credit impairment levels above the extreme lows of the pre-crisis period,” the note said.
Source: News.com.au
Looking for savings accounts? Compare savings accounts at www.yoursavingsaccounts.com.au
Concerns Global Investors Will snub Australian banks
AUSTRALIA’S banking system faces “crucial challenges” in the coming year, with global investors to potentially snub the banks as funding costs climb and the world economy slows.
And the system is vulnerable to increases in unemployment and a contraction in bank lending as a consequence of Australia’s high house prices and levels of household debt, according to ratings agency Moody’s.
It has also warned that the health of the system likely hinges on “how severe and how protracted any contagion from the European sovereign crisis may be”.
But Moody’s has praised the stability of the local banks and says their balance sheets are far stronger than when investment bank Lehman Brothers collapsed in 2008.
Senior vice-president Patrick Winsbury said customer deposits had been “growing faster than loans as deleveraging continues, allowing the major banks to reduce their reliance on offshore wholesale funding”.
Moody’s is maintaining its stable outlook for the Australian banking system based on the strength of the banks’ books and the domestic economy.
In a note to investors, it warned that the strength of the resources sector meant interest rates were likely to remain elevated and the Australian dollar strong even in the event of a crisis in other sectors.
“The longer-term structural changes associated with increased investment in the resource sector are likely to pressure certain industries and regions, keeping credit impairment levels above the extreme lows of the pre-crisis period,” the note said.
Separately yesterday, a leading executive in the retail sector – one of the industries suffering most in the patchwork economy – warned of economic difficulties ahead.
Bunnings and Officeworks managing director John Gillam said another financial crises may be unfolding.
Speaking in Perth, Mr Gillam said he had a “funny feeling GFC wave two” was coming but said his company was prepared.
“In all my time I don’t think we’ve ever been in better shape nor have we been hungrier,” Mr Gillam said.
Source : news.com.au
Looking for savings accounts? Compare savings accounts at www.yoursavingsaccounts.com.au
The Days of Cheap Petrol are Over
DRIVERS have been warned the days of cheap fuel are over and they should brace for permanent pain at the pump. The nation’s petrol watchdog has cleared the local industry of gouging, including on public holidays, despite pocketing a combined $2.2 billion annual profit.
Australian Competition and Consumer Commission commissioner Joe Dimasi concedes drivers are suspicious of rip-offs, but stands by the conclusions. “We have scrutinised this to death,” Mr Dimasi told the Herald Sun. A major ACCC report released yesterday warns that growing global demand for oil, more expensive supply and a potential global price on carbon means steep costs are a “new reality”.
The appreciating Australian dollar spared motorists from a record high average of $1.70 a litre in May. This would have been the retail price had the Aussie dollar been US86c. Instead, the price reached $1.47c. “The era of cheap oil and, therefore, cheap petrol and diesel, appears over,” the report declares.
The ACCC found no evidence of excessive profits by refiners, wholesalers or retailers, but it plans to “closely watch” for any illegal price cycle collusion in Melbourne and other capital cities, in a move welcomed by the RACV. “The ACCC remains concerned about the level of co-ordination apparent in the price cycles and is analysing the likely effects of this behaviour on outcomes for consumers,” the report states. But angry drivers accused the watchdog of being “toothless” and a “joke”. CommSec economists recently queried whether falls in the wholesale price were fully passed on at the bowser.
The ACCC report found unleaded fuel was about 8c a litre more in 2010-11, compared with a year earlier. This matched movements in the Singapore international benchmark and reflected global factors, including Middle East political unrest and a strong Asian economy. Petrol companies earned about 2.2c a litre profit for all petrol products and 1.2c for regular unleaded. Mr Dimasi said: “The people making the big profits are the guys that own the oil.” Australian prices were among the lowest in the OECD, only behind Mexico, the US and Canada.
Source: news.com.au
Looking for savings accounts? Compare savings accounts at www.yoursavingsaccounts.com.au
University students to cover 40 % of Course Costs Under New Funding Plan
ALL university students will pay 40 per cent of the cost of their course and the Government the other 60 per cent under a plan to overhaul funding. Law, accounting, commerce and economics students pay 84 per cent of their course cost while science students only paid 19 per cent, the Higher Education Base Funding Review Final Report revealed.
Feasibility of Taxing Australian Online Shoppers
THE door has been left open for Australians shopping online to be slugged with a hefty tax after the Federal Government yesterday announced a taskforce to look into the scheme’s workability.