Australian top banks may gain from Swan’s reforms
SYDNEY: Wayne Swan, Australia's treasurer, plans to ban exit fees on new home loans from July 2011 and empower the Australian Competition & Consumer Commission to pursue banks that signal interest-rate changes to rivals.
Australia's four largest lenders, led by Commonwealth Bank of Australia and Westpac Banking Corp., may emerge as victors from Treasurer Wayne Swan's package to promote banking competition, analysts said.
Commonwealth Bank, Westpac, National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd. rose in Sydney trading as Swan's 13-point plan stopped short of investors' most pessimistic expectations.
A proposal to let financialservices providers issue covered bonds and broaden access to funds will help the top lenders the most and makes them the "long-term winners" from the package, according to Credit Suisse AG.
"The treasurer's bark was far worse than his bite," said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management Ltd. in Sydney.
"The measures will have no adverse impact on the major banks at all." Swan yesterday announced plans to help customers switch lenders, strengthen Australia's smaller banks, and develop the domestic bond market to allow banks to raise cheaper funds. The package was a response to public anger at record profits from the biggest banks, which control more than 80 percent of the home-loan market, and mortgage-rate advances that outpaced increases to benchmark borrowing costs at the central bank. Commonwealth Bank, Australia's largest, added 1.2 percent to A$51.20 at the 4:10 p.m. local time close, trimming this year's decline to 6.7 percent. Westpac rose 1.5 percent to A$22.90, taking the year's drop to 9.5 percent. National Australia Bank climbed 1.5 percent to A$24.57 and ANZ Bank gained 1.1 percent to A$24.10.
In a parliament where no party has an outright majority, there's a "tangible" risk some of the treasurer's plans will fail, Credit Suisse analysts led by Jarrod Martin in Sydney said in a note to clients dated today. Swan's minority Labor government needs support from other lawmakers in the lower house of parliament to pass legislation. -PB News