Banks: Peer-to-peer lending no threat… Higher equity ratios to drive ANZ… ASIC cracks down on Australia's second largest payday lender
Peer-to-peer lending no threat
Australians could be borrowing an estimated $22 billion from each other rather than banks within five years, but experts say the rise of peer-to-peer lending shouldn't bother the country's major banks, according to an article from the Trading Room.
David Ellis says the big four banks – the Commonwealth, ANZ, Westpac and National Australia Bank – will be able to withstand the rise of the nascent sector without much fuss.
That's despite investment bank Morgan Stanley's prediction peer-to-peer lenders could account for six per cent of personal loans and 12 per cent of small business loans by 2020. He says while peer-to-peer lenders are targeting the low hanging fruit – unsecured loans, where interest rates can be exorbitant – the banks' bread and butter of mortgages and higher level business lending was not under threat.
"There's opportunities for peer-to-peer lending, good opportunities, but that doesn't mean it's going to be a negative for the major banks of Australia," he told AAP. "I can't really see it really making any inroads into lending that's more complex and where there's a security involved."
Higher equity ratios to drive ANZ
According to an article in the Sydney Morning Herald, the need for higher equity ratios will drive ANZ Banking Group to sell its capital-hungry minority stakes in two or three Asian banks over the next couple of years, Deutsche Bank says.
The result of lifting the bank to the top of the capital tree and offsetting the impact of higher mortgage risk weightings that the prudential regulator is expected to be announced later this month.
ANZ owns a 39 per cent stake in Panin Bank in Indonesia, 24 per cent of AmBank Group in Malaysia, 14 per cent of China's Bank of Tianjin, and a 20 per cent holding in the Shanghai Rural and Commercial Bank. These stakes tie up around $5.3 billion of capital, draining returns.
The Australian Prudential Regulation Authority requires ANZ to fully deduct the equity in its Asian joint ventures from capital; the rules were more generous to ANZ when the stakes were acquired eight years ago, according to the article.
ASIC cracks down on Australia's second largest payday lender
Australia’s second-largest listed payday lender, Money3, has stopped offering its two payments ‘fixed fee’ loan arrangement and has agreed to refund more than $100,000 to consumers following concerns raised by ASIC in its crackdown on payday lending.
Money3’s ‘fixed fee’ loan required only two repayments, despite having a term of 16 months. Under the terms of the contract, the first repayment (generally due a week after the loan was taken out) was for a nominal amount, and the much larger second repayment was due 15 months later.
This second payment usually accounted for more than 90 per cent of the total amount repaid. ASIC was concerned that the product was likely to be unsuitable for most of the financially vulnerable customers who obtained it, and in breach of the national responsible lending obligations.
Australians could be borrowing an estimated $22 billion from each other rather than banks within five years, but experts say the rise of peer-to-peer lending shouldn't bother the country's major banks, according to an article from the Trading Room.
David Ellis says the big four banks – the Commonwealth, ANZ, Westpac and National Australia Bank – will be able to withstand the rise of the nascent sector without much fuss.
That's despite investment bank Morgan Stanley's prediction peer-to-peer lenders could account for six per cent of personal loans and 12 per cent of small business loans by 2020. He says while peer-to-peer lenders are targeting the low hanging fruit – unsecured loans, where interest rates can be exorbitant – the banks' bread and butter of mortgages and higher level business lending was not under threat.
"There's opportunities for peer-to-peer lending, good opportunities, but that doesn't mean it's going to be a negative for the major banks of Australia," he told AAP. "I can't really see it really making any inroads into lending that's more complex and where there's a security involved."
Higher equity ratios to drive ANZ
According to an article in the Sydney Morning Herald, the need for higher equity ratios will drive ANZ Banking Group to sell its capital-hungry minority stakes in two or three Asian banks over the next couple of years, Deutsche Bank says.
The result of lifting the bank to the top of the capital tree and offsetting the impact of higher mortgage risk weightings that the prudential regulator is expected to be announced later this month.
ANZ owns a 39 per cent stake in Panin Bank in Indonesia, 24 per cent of AmBank Group in Malaysia, 14 per cent of China's Bank of Tianjin, and a 20 per cent holding in the Shanghai Rural and Commercial Bank. These stakes tie up around $5.3 billion of capital, draining returns.
The Australian Prudential Regulation Authority requires ANZ to fully deduct the equity in its Asian joint ventures from capital; the rules were more generous to ANZ when the stakes were acquired eight years ago, according to the article.
ASIC cracks down on Australia's second largest payday lender
Australia’s second-largest listed payday lender, Money3, has stopped offering its two payments ‘fixed fee’ loan arrangement and has agreed to refund more than $100,000 to consumers following concerns raised by ASIC in its crackdown on payday lending.
Money3’s ‘fixed fee’ loan required only two repayments, despite having a term of 16 months. Under the terms of the contract, the first repayment (generally due a week after the loan was taken out) was for a nominal amount, and the much larger second repayment was due 15 months later.
This second payment usually accounted for more than 90 per cent of the total amount repaid. ASIC was concerned that the product was likely to be unsuitable for most of the financially vulnerable customers who obtained it, and in breach of the national responsible lending obligations.
