Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

(ANZ)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Moody's deals fresh blow to Australia's 'Big Four' banks

08/19/2016 | 04:37am EDT
A combination of photographs shows people using automated teller machines (ATMs) at Australia's

SYDNEY (Reuters) - An outlook downgrade from Moody's Investors Service heaped more pressure on Australia's highly profitable banks on Friday, after a U.S. lawsuit over alleged rate rigging sparked fresh calls for a judicial inquiry into the country's financial sector.

Moody's signalled late on Thursday that a ratings downgrade is more likely, a move that would raise funding costs, citing sluggish profit growth, housing market risks, declining loan quality and low wages outcomes after the end of a mining boom.

The move followed an outlook cut by Standard & Poor's (S&P) in July, and came on the same day Australia's four dominant banks revealed they were among 17 global lenders being sued by U.S. funds for alleged interest rate fraud.

The writ, filed on Aug. 16 by two U.S.-based investment funds and a derivatives trader, fuelled demands for a Royal Commission inquiry into financial sector malpractice ahead of the first sitting of a new Australian parliament next week.

"A Royal Commission would get to the nub of the problem, the core of the problem, a proper examination of the culture and practices of Australia's banking industry," opposition Labor Party treasury spokesman Chris Bowen told reporters in Sydney.

Labor says a series of scandals has exposed deep flaws with Australia's banking culture that went unnoticed as the industry survived the global financial crisis relatively unscathed and posted successive record profits in recent years.

A commission would have far-reaching powers to order disclosure of internal communications and question top executives in public and under oath. It would not hand out punishments but it could lead to prosecutions and its recommendations would be highly influential.

Prime Minister Malcolm Turnbull has stood by the banks in rejecting the need for such an inquiry, despite strong pressure from Labor and from minor parties which will hold the balance of power in parliament following the July election.

Turnbull said the government was instead considering setting up a tribunal to deal with consumer complaints against banks.

"We want to ensure that where there are failings, where there are problems, that we deal with them," he said.

CORNERED

The "Big Four" banks - National Australia Bank Ltd, ANZ Banking Group Ltd, Westpac Banking Corp and Commonwealth Bank of Australia - have denied any wrongdoing in relation to the U.S. writ and pledged to fight the allegations.

Seven of the world's biggest banks in May agreed to pay $324 million to settle a private U.S. lawsuit accusing them of manipulating interest rates. Banks around the world have been fined billions of dollars over the manipulation of global benchmark interest rates like Libor.

On top the of U.S. suit, the Australian Securities and Investments Commission (ASIC) has laid charges against three of the "Big Four" for allegedly rigging bank bill swap rates used to price financial products.

While the banks, which control more than three quarters of the market, are fighting the allegations, they have been damaged by emails, phone calls and electronic chats tendered in court revealing brokers joked and boasted about rate manipulation.

When one ANZ trader sarcastically commented "lucky the rate sets are all legit and there is no manipulation within the Australian financial system", his colleague replied "ahahah", according to the U.S. filing.

HEADWINDS

Moody's cut its outlook on the banks to negative from stable, even though Australian banks' 'Aa2' credit ratings are among the highest in the world.

"They've got a fair few more headwinds now than they've got in a while," said Andrew Martin, portfolio manager at Alphinity Investment Management, which owns stakes in the banks.

"One of the many is rising funding costs in a slowing economy and political risks. These are things that are causing very low growth in the industry."

The Big Four acknowledged Moody's action but noted in separate statements that the rating agency had reaffirmed their ratings.

Bank profits are under pressure from new onerous capital rules, higher loan defaults led by a mining downturn and a squeeze on margins due to rising funding costs and stiffer lending competition.

Earnings growth at the four has already slowed after six straight years of record profit.

(Additional reporting by Sonali Paul in Melbourne; Editing by Stephen Coates and Lincoln Feast)

By Swati Pandey


© Reuters 2016
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 0.85% 28.39 End-of-day quote.25.07%
COMMONWEALTH BANK OF AUSTRALIA 1.10% 105.03 End-of-day quote.27.91%
NATIONAL AUSTRALIA BANK LIMITED 0.63% 28.83 End-of-day quote.27.57%
THE LEAD CO., INC. 0.85% 716 End-of-day quote.-14.76%
WESTPAC BANKING CORPORATION 0.78% 25.68 End-of-day quote.32.58%
All news about AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
01:18aNew Zealand passes climate change disclosure laws for financial firms in world first
RE
10/20JOLLIBEE FOODS : Unit to Buy Back $203 Million of Perpetual Securities
MT
10/19S&P/ASX 200 : Australia's Central Bank Stays Dovish, Sees Limited Spillover From Global In..
MT
10/18AUSTRALIA AND NEW ZEALAND BANKING : Consumer Confidence 6 weeks of gains
PU
10/14SHANGHAI STOCK EXCHANGE B SHARES IND : China's Factory Inflation Surges to Record High on ..
MT
10/14SHANGHAI STOCK EXCHANGE B SHARES IND : Chinese Shares End Muted; Kidswant Soars 304% in Sh..
MT
10/13SHANGHAI STOCK EXCHANGE B SHARES IND : China's Factory-Gate Prices Surge at Record Pace in..
MT
10/13China’s Producer Inflation to Hit Record 12% in Q4 on Power Supply Crunch, ANZ Sa..
MT
10/13ANZ Announces Executive Changes
CI
10/11AUSTRALIA AND NEW ZEALAND BANKING : Consumer Confidence keeps edging higher
PU
More news
Analyst Recommendations on AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
More recommendations
Financials
Sales 2021 17 359 M 13 006 M 13 006 M
Net income 2021 6 130 M 4 593 M 4 593 M
Net Debt 2021 - - -
P/E ratio 2021 13,7x
Yield 2021 4,91%
Capitalization 79 259 M 59 549 M 59 383 M
Capi. / Sales 2021 4,57x
Capi. / Sales 2022 4,38x
Nbr of Employees 37 844
Free-Float -
Chart AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Duration : Period :
Australia and New Zealand Banking Group Limited Technical Analysis Chart | ANZ | AU000000ANZ3 | MarketScreener
Technical analysis trends AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 15
Last Close Price 28,39 AUD
Average target price 29,70 AUD
Spread / Average Target 4,61%
EPS Revisions
Managers and Directors
Shayne Cary Elliott Chief Executive Officer & Executive Director
Farhan Faruqui Chief Financial Officer
Paul Dominic O'Sullivan Chairman
Gerard Florian Group Executive-Technology
Michael Liarakos Chief Compliance Officer