Australian Banking & Finance articles from October 2002

Australian Banking & Finance archives from October 2002

Turbulence at the top: the future direction of two of the country's major financial institutions, AMP and Suncorp Metway, is under question following a dramatic fortnight in which the CEOs of both organisations walked away from their positions.
October 15, 2002... The resignation of AMP chief Paul Batchelor was certainly no surprise, but his swift replacement by Andrew Mohl has ushered in yet another phase of uncertainty for the company which has been racked with problems since it demutualised in 1998....

Who would have thought just over a year after shaking hands on a deal for AMP to sell GIO to Suncorp Metway that both chief executives, Paul Batchelor and Steve Jones, would have vacated their positions of power.(Brief Article)
October 15, 2002... Who would have thought just over a year after shaking hands on a deal for AMP to sell GIO to Suncorp Metway that both chief executives, Paul Batchelor and Steve Jones, would have vacated their positions of power. Differing circumstances, sure,...

RBA director blames greed.(Reserve Bank, Dick Warburton)
October 15, 2002... A DIRECTOR OF THE RESERVE BANK, Dick Warburton, says a build up of complacency and greed has contributed to the crisis in corporate governance in Australia, which has affected financial services group's AMP and Suncorp Metway. Warburton...

Members equity in credit card offering. (Current Account).(Members Equity introduces Members Equity MasterCard, its first credit card)(Brief Article)
October 15, 2002... MEMBERS EQUITY HAS LAUNCHED its first credit card, the Members Equity MasterCard. With the new MasterCard, customers will benefit from an extremely low 9.75 per cent interest rate, together with up to 44 interest-free days on purchases....

IBSA welcomes bond statement. (Current Account).(Australian government to consult with financial sector on future of Commonwealth Government bond market)(Brief Article)
October 15, 2002... THE INTERNATIONAL BANKS AND Securities Association has welcomed the Treasurer's announcement that the Government will consult with the financial sector on the future of the Commonwealth Government bond market. "The current debate about...

Banking world. (Current Account).(Citigroup Inc. to pay $240 million to settle charges its consumer finance unit was "fleecing" customers )(Brief Article)
October 15, 2002... Robert B. Willumstad, President of Citigroup Inc, speaks to reporters outside the Federal Trade Commission in Washington, DC. Citigroup Inc. agreed to pay $240 million to settle accusations its consumer finance unit was "fleecing" customers...

HSBC has no plans for local takeover. (Current Account).(Brief Article)
October 15, 2002... HSBC HOLDINGS CHAIRMAN JOHN Bond says the global banking company hasn't considered making a takeover bid for St George Bank Ltd. "We have admired St George and what they have achieved there very much," Bond told CNBC Asia Pacific cable...

Mobile commerce focus drops off. (Current Account).(Brief Article)
October 15, 2002... TIGHTENED BUDGETS AND SLOW consumer uptake of wireless financial services have led to a fall in both investment and focus on mobile commerce. Successful financial institutions, however, are continuing to invest in high-utility wireless...

NZ consumers support Kiwibank. (Current Account).(New Zealand)(Brief Article)
October 15, 2002... WELLINGTON: GOVERNMENT owned Kiwibank is the most popular alternative for New Zealand consumers unhappy with their bank, but many are likely to find the costs and complexity of switching prohibitive, according to the University of Auckland's...

On the record. (Current Account).(Brief Article)
October 15, 2002... "We need to rebuild trust. We are a well capitalised company in a strong financial. position. The experience we are having in the UK is common to every other player in the market." NEWLY-ELECTED AMP CHIEF EXECUTIVE ANDREW MOHL. "We...

St George vows to lift customer service. (News).
October 15, 2002... ST GEORGE, THE BANK THAT effectively built its business on its ability to offer superior service levels, has admitted that its standards have slipped and need sharpening. The group's head of strategy Peter Clare said the bank was concerned...

We have to reinvent our businesses: Murray. (News).(David Murray)(Brief Article)
October 15, 2002... AUSTRALIA'S TOP BANKER DAVID Murray says Australia must build a "risk and reward culture" if the nation was to prosper in the next decade. "We should not step back from rewarding people who take risks and make progress, but we have to do...

Regionals looking good: S&P. (News).(Standard and Poor's)(Brief Article)
October 15, 2002... STANDARD & POOR'S HAS endorsed the strong performance of Australia's leading regional banks. S&P director of financial services Peter Sikora said the recent full year results of Bendigo Bank, Adelaide Bank and Suncorp-Metway provided...

Smaller banks are better online: Australian financial institutions are providing an excellent internet interface for customers looking to boost their savings, but many of the larger banks could be doing more. (News).
October 15, 2002... A study conducted by online research company Global Reviews found that although the larger banks generally provided solid online banking services, it was the lesser known institutions that focused more heavily on securing new customers via the...

Card reforms to boost competition, cut rates: the recent credit card interchange reforms are expected to introduce a period of increased competition in the card market, according to analysis by PricewaterhouseCoopers.
October 15, 2002... The expectation is that the credit card market may evolve in a similar fashion to the mortgage market in the mid 1990's when spreads on mortgages, over cash, moved from around 400bps to around 200bps as mortgage managers entered the market and...

Service fever agreements forewarn on satisfaction. (News).
October 15, 2002... SERVICE LEVEL AGREEMENTS (SLA's) have been around for as long as bad service has, and yet, like most preventative solutions, they have been highly under rated. For those of us that have forgotten, SLA's were very much the flavour of the...

CUA cuts cost ratio. (News).(Credit Union Australia)(Brief Article)
October 15, 2002... CREDIT UNION AUSTRALIA (CUA) says ordinary profit (after tax but excluding related party dividends) rose 47 per cent to $13.47 million in the year to June 30. However managing director Graham Olrich said the group profit had fallen by 6.3...

Elders Rural Bank wins out on service. (News).
October 15, 2002... THE CHIEF EXECUTIVE OF Australia's youngest bank believes the financial institution is on track to become a major player in rural Australia. Elders Rural Bank's Bob Jones said the regional bank had shown solid growth since opening its...

Financial analysts eager for success. (News).
October 15, 2002... AUSTRALIAN FINANCIAL ANALYSTS are following the lead of their international counterparts and signing up for the Chartered Financial Analyst(r) (CFA(r) qualification, as they look to joining the ranks of top-notch investment professionals in the...

Choice of fund dilemma. (News).
October 15, 2002... AS THE FEDERAL GOVERNMENT strongly argues the case for choice of superannuation, a new survey shows that Australian workers may not yet be ready to make up their own mind. The Sweeney Research survey, commissioned by Norwich Union...

Deutsche builds internet currency trading strategy. (News).
October 15, 2002... DEUTSCHE BANK SAYS IT IS actively building up its own Internet currency trading strategy, unwilling to cede the territory after the April failure of its online forex trading venture Atriax. Perry Parker, head of North American foreign...

Human capital. (News).(performance management)
October 15, 2002... PERFORMANCE MANAGEMENT has garnered a lot of press over the past 10 years, both in terms of its importance and how to make it happen. In many organisations, the phrase "performance management" continues to elicit comments such as "not that...

Credit union comment.(credit card reforms)(Brief Article)
October 15, 2002... THE RESERVE BANK'S regulatory impact statement on its reforms to credit cards identifies the beneficiaries as merchants that accept credit cards for payment and the community as a whole, including consumers who do not use credit cards. ...

Housing sector resilient. (News).(Brief Article)
October 15, 2002... STRONG UNDERLYING fundamentals in the consumer market have underpinned the performance of residential, mortgages in Australia, which continued to improve in the quarter to June 30. Standard & Poor's Australian Mortgage Performance Index...

Internal reporting strengthens. (News).(Brief Article)
October 15, 2002... INVESTORS SHOULD HAVE renewed confidence in Australia's capital markets system following a raft of changes to the Corporations Act fore-shadowed by the Federal Government. Ernst & Young audit managing partner Sean Van Gorp said the...

Demand for senior execs wane. (executive suite).(Brief Article)
October 15, 2002... DESPITE THE AUSTRALIAN economy defying the 2001/2002 world economic slowdown, there has been another sharp downturn in the demand for senior executives in the last two months indicating the presence of a `jobless recovery'. While the...

The strategic importance of finance portals. (New Economy Banker).
October 15, 2002... THE ADOPTION OF THE TERM `portal' coincided with the growth in the early days of the Internet. Portals such as Yahoo and Excite, AOL.com and CNET, categorised and aggregated vast amounts of information to assist end-users effectively...

The benefits of brand awareness. (the Nielsen/netRating report).(wealth management)
October 15, 2002... WEALTH MANAGEMENT, OR WM as insiders now seem to refer to it, continues to trend upwards from an online perspective. In August more than 560,000 unique individuals accessed some type of WM product or service, whether with a full-service...

ANU launches online account. (New Economy Banker).(Australian National credit union)(Brief Article)
October 15, 2002... ONE OF AUSTRALIA'S LARGEST credit unions AustraLian National, has launched an online savings account, eSaver. With a high interest rate for at call savings and no account keeping fees, eSaver is a genuine competitor to the other online...

Lenders act to lift broker standards; two of the biggest non-bank lenders, Wizard and RESI Mortgage Corp have moved to try and polish the image of Australia's growing mortgage broking industry by compiling a list of 10 ethical guidelines for mortgage brokers. (Special Report--Mortgage Brokers 2002).
October 15, 2002... THE GUIDELINES--WHICH DEAL with everything from commissions to training and loan churning--were submitted to the Consumer Credit Legal Centre which has just finished preparing a report on mortgage broking for the Australian Securities and...

Aussie sets scene for shake-up. (Special Report--Mortgage Brokers 2002).(mortgage broking industry)
October 15, 2002... THE BIGGEST NEWS TO HIT THE mortgage broking industry in years was the recent move by Aussie Home Loans to enter the market with the launch of Aussie Mortgage Market. John Symond describes the initiative as the most significant in mortgage...

Brokers must disclose commissions: the NSW Government introduced legislation on September 24 to require finance brokers to disclose commissions irrespective of whether the fee is paid by the borrower or the lender. (Special Report--Mortgage Brokers 2002).
October 15, 2002... The legislation is yet to be passed by the Upper House, and a firm start date set. The following summary is provided as a brief "early warning". The government says the legislation is required because many consumers are not aware that...

Behind the screens. (News).(Several CEOs depart from financial services )
October 15, 2002... Don't believe the PR dribble coming out of Suncorp Metway about the shock resignation of CEO Steve "Forest Gump" Jones. The official line was that Jones had completed the bulk of his objectives at the Queensland allfinanz group. Humbug. Jones...

Asian millionaires: a tough bunch. (Datamonitor's Asia-Pacific Insight).
October 15, 2002... THE NUMBER OF ASIAN MILLIONAIRES IS STILL increasing, despite global market volatility. Asia's economies have seen strong economic growth, while income inequality has not diminished. The combination of evolving investor preferences,...

Hawker claims CGU, NZI will prove their worth; the market might have justifiable reservations, but IAG chief executive Michael Hawker is convinced the $1.8 billion acquisition of CGU and NZI's Australian and New Zealand business will not follow the same course as other, high profile insurance sector acquisitions in recent years.
October 31, 2002... Concerns over the price paid and the problems which trailed the HIH-FAI and AMP-GIO amalgamations in recent years have emerged as key factors in a general failure by investors to embrace the deal at this stage. But Hawker says comparisons...

Insurers facing hurdles.(Brief Article)
October 31, 2002... AUSTRALIAN GENERAL insurers have responded strongly following a reduction in capacity, reinsurance premium rate increases and investment volatility since the September 11 terrorist attacks. But many challenges remain, says Standard & Poor's....

Westpac acts to boost call centre capacity. (Current Account).(Brief Article)
October 31, 2002... WESTPAC HAS CHANGED ITS CALL centre strategy with a move towards fewer, larger contact centres across the country. This change in strategy would see an increase in Westpac's total. call, centre capacity over the next three years from almost...

Banking world. (Current Account).(Japan)(Brief Article)
October 31, 2002... Traders on the floor of the Tokyo Stock Exchange look up toward a monitor. Japan's five-year note auction drew record demand and five-year debt rose on expectations proposals to bail out the nation's banks will make the economy worse before it...

RBA says economy in `pretty good shape'. (Current Account).(Reserve Bank of Australia)(Brief Article)
October 31, 2002... GLOBAL STOCK PRICES AND BOND yields have fallen since August, reflecting the deteriorating outlook for global, economic growth and heightened risk for Australia's economy, said Glenn Stevens, deputy governor of the central bank. Still, the...

St George launches corporate Mastercard. (Current Account).(Brief Article)
October 31, 2002... ST GEORGE CORPORATE & business bank has launched Corporate Connections MasterCard, continuing the momentum of the bank's recent strong growth in the middle market. Greg Bartlett, group executive of St George Institutional & Business...

Systemic risk worries HSBC finance chief. (Current Account).(Brief Article)
October 31, 2002... EUROPE'S BIGGEST BANK HSBC Holdings Plc has voiced worries about the stability of the financial sector, joining a chorus of concern about the impact of the market downturn on banks and insurers. "We do worry about systemic risk," chief...

On the record. (Current Account).
October 31, 2002... "The strategy we have been pursuing in the UK has been too aggressive given our starting point and challenges we face in the external market." AMP CHIEF EXECUTIVE ANDREW MOHL AFTER SACKING UK HEAD TOM FRASER. "The thing I get upset...

Axiss launches online gateway for education. (Current Account).
October 31, 2002... Axiss has Launched a one-stop online gateway for finance education and training featuring information on more than 150 finance related education and training courses offered by institutions across Australia. Finance Skills...

Homebuyers confused by mortgage documents. (News).
October 31, 2002... HOMEBUYERS, CAUGHT UP IN THE excitement of purchasing a house, are entering mortgage contracts without proper consideration, according to the annual review of the Mortgage Industry Ombudsman Scheme (MIOS). Developed in conjunction with the...

St George Bank backs credit quality. (News).(Brief Article)
October 31, 2002... ST GEORGE BANK'S CHIEF executive Gait Kelly says the bank's credit quality was not expected to suffer, despite an expected slide in home loan growth. Kelly reiterated the bank still believed the number of home loans written in Australia...

AMP chief points to capital allocation; AMP's decision to back away from aggressive plans to make it big in the British market will enable the group to allocate its capital more effectively, says CEO Andrew Mohl. (News).
October 31, 2002... Mohl, said the rejig was the first step in a plan to divorce the group from businesses delivering inadequate returns and focus on core wealth management operations in Australia, New Zealand and the UK. "The strategy we have been pursuing in...

Reference data: the first step to STP; an Omgeo study of trade processing time delays found that good data management is often overlooked by the interested parties. (STP News).(Column)
October 31, 2002... INCORRECT REFERENCE DATA dooms a trade to exception processing or trade failure from the start. In fact, one of the key business justifications for investing in data management technologies has been the impact of incorrect reference data. Last...

Eyes are still on the STP ball: CSFB; reducing the flash to bang time of a trade is still the aim of Credit Suisse First Boston, who are continuing to shift towards straight through processing to achieve greater client satisfaction. (STP News).
October 31, 2002... KRUPESH PATEL FROM CREDIT Suisse First Boston's Equity Operations division for the region believes that although the processing of trade goat posts may have moved since the US's withdrawal. of support for T+1 the game remains the same. "A...

ANZ Bank changes management of specialist businesses. (News).(Brief Article)
October 31, 2002... ANZ BANK HAS ANNOUNCED changes in the senior management oversight of its specialist businesses to sharpen its focus on customers and around the priorities for ANZ's future development. Elmer Funke Kupper, managing director, personal banking...

CBA promotes Mulcahy, Harley. (News).(Brief Article)
October 31, 2002... JOHN MULCAHY AND HUGH Harley have taken on new roles following the retirement of Peter Poison as head of the Commonwealth Bank's investment and insurance services division. Mulcahy, currently group executive, retail banking services, will...

Viewpoint: two respected industry figures have their say. (News).(Interview)
October 31, 2002... Q: What is the outlook for the sharemarket in the next quarter? Steven Goh, Chief Executive Officer, Sanford Ltd "For investors, the coming quarter is traditionally weak. Concerns over terrorism, a tentative recovery and corporate...

RAMS Home Loans seals outsourcing agreement. (News).(Brief Article)
October 31, 2002... UNISYS HAS BEEN AWARDED THE contract to provide the mortgage operations of RAMS Home Loans. The contract value is estimated at more than $146 million over seven years. RAMS Home Loans claims 30% of the non-bank mortgage market share in...

Fees set to surge. (News).(Financial institutions can expect to earn close to US$800 billion in management fees at the end of 2007.)(Brief Article)
October 31, 2002... Financial institutions can expect to earn close to US$800 billion in management fees at the end of 2007, with the high net worth segment accounting for the bulk of the fees with 37%. The mass affluent segment will, not be far behind with...

Chinese fund management: looking towards a big future. (Datamonitor's Asia-Pacific Insight).(Shanghai Future Exchange.)
October 31, 2002... THE SHANGHAI FUTURES Exchange has said it is ready to start trading. China's fund management industry has crying out for the ability to hedge equity investments, so a market-ready futures exchange is good news for fund managers. The...

Bank of Queensland tipped to maintain double digit growth. (News).(Brief Article)
October 31, 2002... BANK OF QUEENSLAND IS tracking well in the current half after it reported a record full year profit. "Our sales levels are maintaining at the level they were at last year. We are not seeing any dip in housing at this stage," managing...

Consumers continue to look for alternatives. (credit union comment).(Brief Article)
October 31, 2002... BANKING AND FINANCIAL services is one area of people's lives that day by day seems to offer more and more alternatives for those seeking something different. However, this trend is not unique to the financial sector. It is not so long ago...

Losing the online prospect: online banking channels are much more than simply gateways for scheduling the latest bill payments. (the Nielsen/netRatings report).
October 31, 2002... They are, and should be, a critical customer environment within which to inform and service customer needs beyond any immediate secure transaction. Alas, the millions spent on channel development outside the secure layer is debatably the...

Executive suite. (News).(Home loan industry still good.)(Brief Article)
October 31, 2002... TONY CROSSLEY, CEO OF MORTGAGE CHOICE COMMENTS ON THE PROPERTY MARKET: "THERE HAS BEEN A LOT OF speculation about the home lending business but feedback from our consultants at Mortgage Choice have led us to believe that the home loan...

Don't bank on expanding ties with small business. (News).
October 31, 2002... DOMINANT BANKING INSTITUTIONS hope that getting their wired small business customers to bank online makes banking more convenient for them, engenders loyalty and enhances opportunities to expand the relationship--but, according to a new study,...

Majors in outsourcing deal. (News).(CBA, WESTPAC AND ANZ BANK have become equity owners in Cash Services Australia (CSA) while US company Carreker Corp holds the rest. )
October 31, 2002... CBA, WESTPAC AND ANZ BANK have become equity owners in a company that provides technology and consulting services. They have each taken a 25% stake in Cash Services Australia (CSA) while US company Carreker Corp holds the rest. ...

Fraudsters may target local market; credit card fraudsters could start to attack the Australian market, leading international credit card houses have warned. (Special Feature--Smart Cards & EMV).
October 31, 2002... Visa head of smart cards for Australia and New Zealand Vipin Kalra said up until recently the Australian banking sector has been sitting in a comfort zone, assuming that they didn't have a credit card fraud problem. He said in the last...

Facts about the EMV [Europay, Matercard and Visa] smart cards. (Special Feature--Smart Cards & EMV).
October 31, 2002... EMV REPRESENTS A SET OF global specifications developed to support interoperable credit and debit transaction processing between smart cards and terminals. Named by its originators Europay, MasterCard and Visa, the specifications include chip...

Chip cards: the time to act is now. (Advertorial).
October 31, 2002... There is no debate any more that smart card technology is a key driver shaping the future of money and the payments industry. Not doing something today, and putting off a decision on implementing this technology for another 12-18 months, could...

Migration a way to differentiate; a Y2K-like deadline is beginning to loom for Australia's financial services institutions. (Special Feature--Smart Cards & EMV- electrrmagnetic vulnerability).
October 31, 2002... The migration of credit cards and payment terminals from magnetic stripe to EMV-compliant chip is inevitable as the incidence of fraud continues to rise across the Asia-Pacific region. Industry research shows that Australia experienced a...

Why banks are starting to like EMV [extended money value]. (Special Feature--Smart Cards & EMV).
October 31, 2002... TODAY'S TRANSACTION PAYMENT and communication infrastructure is characterised by change. The buzz word describing that change is "convergence". What we are seeing is a convergence of the roles played by banks, by network operators, by IT...

ANZ Bank leads the way forward; the future of smart card technology is looking up, with a flurry of activity in the Asia Pacific helping to boost confidence in the market. (Special Feature--Smart Cards & EMV).
October 31, 2002... The smart card market has been poised to be "the next big thing" over the last couple of decades. Governments and corporations have been toying with the idea for sometime, and it has only been in the last 12 months that plans to roll out the...

Behind the screens. (News).(News briefs from the Australian banking industry.)
October 31, 2002... After news of the IAG acquisition of CGU and NZI leaked several days before a formal announcement was made, IAG chief Michael. Hawker made a personal apology to his staff. "It is regrettable that speculation about this acquisition appeared in...

Risk management challenges. (News).
October 31, 2002... RECOVERING FROM A Catastrophic business event is something bankers hope they, personally, do not have to do. Under the old rules of disaster recovery, it was system redundancy and back up, cleaning up and getting back to work after a...

IPC Communications Inc. trading communication going IP. (News).
October 31, 2002... Trading rooms are reducing in size and are also rapidly moving towards the use of video at their traders desks says trading system communications provider IPC's managing director for the region Stephen Phillips. Trading room floors have...

Capital gains. (News).(Quotation.)(Brief Article)
October 31, 2002... "Whoops! There go those darned interest rates again!" [ILLUSTRATION OMITTED]