Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Yesterday APRA published their quarterly ADI performance statistics to June 2014. So today we look at some of the detail contained in this mammoth release, with a focus on the four major banks, which makes up the bulk of the industry. APRA reported that the net profit after tax for all ADIs was $8.4 billion … Continue reading “Bank Profits Up To $8.4 Billion In June Quarter – APRA”
We know that first time buyers are sitting on the sidelines, as shown in our recent surveys. The biggest barrier is price. Many are desperate to enter the market and would jump at any additional incentive. No surprise then to see proposals popping up from time to time to try and assist first time buyers. … Continue reading “Why Enticing First Time Buyers With Super Is A Bad Idea”
The Treasury today announced a review seeking feedback on the types of products which would be appropriate for people approaching or in retirement with a focus on ensuring they do not out live their savings. The Government’s superannuation election commitments include reviewing: the regulatory barriers restricting the availability of relevant and appropriate income stream products … Continue reading “Government To Review Retirement Income Rules”
Having summarised the main observations from the 460 page Financial System Inquiry (FSI) interim report yesterday, today we start to delve more deeply into some of most important issues raised. In a number of areas, we believe the work to date could be sharpened. Lender’s Mortgage Insurance. The report rightly highlights that for banks with … Continue reading “Reflections On The FSI Interim Report – Part 1”
The draft report was released today. In a layered document, it sets out a series of 28 observations, and possible options for ongoing consideration. The main observations are set out below: • The banking sector is competitive, albeit concentrated. The application of capital requirements is not competitively neutral. Banks that use internal ratings-based (IRB) risk … Continue reading “Financial System Inquiry – Interim Report”
The ABC TV News and The Business featured a piece in Lenders Mortgage Insurance (LMI). The segment included data from the DFA household survey, data which can be found in our post Is Lenders Mortgage Insurance a Good Thing? We concluded: “Overall, whilst LMI may allow some to access the property markets sooner, and protects … Continue reading “Focus On Lenders Mortgage Insurance”
The RBA today published a discussion paper entitled Is Housing Overvalued? This is an important question, given The Economist (2013) and the OECD (2013) report that Australian house prices are 24 per cent and 21 per cent ‘overvalued’, respectively. The report makes the point cost to income ratios are meaningless unless you know the cost … Continue reading “No Housing Bubble In Australia – RBA”
The ABS today published their data series on Lending Finance in Australia to May 2014. The seasonably adjusted value for owner occupation fell 0.7% compared with April, whilst overall commercial lending fell 6.0% month on month. There were increases in personal finance and leasing, but overall lending fell. We start with a chart showing the … Continue reading “Lending Finance Slips In May – ABS”
ASIC today released a report into fee disclosure practices for super and managed investments. The intention of the fee and cost disclosure requirements is to promote comparability of products. However, ASIC’s review of industry practices indicates that there is significant variation in the disclosure of fees and costs. A key driver of this variation is … Continue reading “ASIC Warns On Super And Managed Investment Fees”
The UK Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have today published a review of the changes introduced last year which were put in place to reduce the barriers to entry for new financial institutions. The purpose of the measures was to enable increased competition in the banking industry, to the benefit of customers. … Continue reading “Increasing Competition In Banking – Lessons From The UK”