Trending Financial News 26 June

Which bank has more system outages than any other?

There were more than 300 service disruptions at Australian banks and other financial institutions in the 12 months to the end of December 2018, up from about 200 incidents in 2017 according to the Reserve Bank of Australia.

The outages tracking website www.downdetector.com reports there were more than 50 separate service disruptions at ANZ in 2018 and 33 incidents at Commonwealth Bank. There were 25 incidents at the National Australia Bank and 17 at Westpac. There were fewer computer system outages in 2018 at ME Bank and Suncorp.

Banks told to fix their computer systems

Australian bank customers are having to deal with more system outages and they are taking longer to resolve. Total downtime of retail banking outages in 2018 more than doubled to around 1800 hours. There were more than 300 service disruptions at Australian banks and other financial institutions in the 12 months to the end of December – up from about 200 incidents in the previous year, according to official data from the Reserve Bank of Australia.

The average duration of outage events blew out to six hours from four hours, with around half of all service disruptions paralysing mobile and online banking channels.

The RBA’s Michelle Bullock said banks need to “ensure that their systems are resilient.”

A new mutual super bank is taking shape

G&C Mutual Bank and Unity Bank have announced plans to merge by around September 2020 creating “one of Australia's largest nationally-operating mutual banks” with assets of around $2.5 billion and 35 branches.

G&C Mutual Bank started 60 years ago as the Public Works Department Credit Union. Unity Bank started in 1970 as the Waterside Workers’ of Australia Credit Union. The new bank will eventually be known as Unity Bank.

“Continued consolidation within the mutual banking sector is inevitable,” said Lisa Barrett, credit analyst at S&P Global Ratings, “Larger, well-managed Australian mutuals will prevail.”

Another rate cut is coming next Tuesday

The Reserve Bank will cut interest rates again next week according to senior Westpac economist Bill Evans. Mr Evans said the RBA would usually wait for a few months to monitor the impact of the June rate cut.

However, the RBA Governor Phillip Lowe signalled a strong bias toward further rate cuts in a speech last week, leading to many economists to bring their rate cut expectations forward.

Mr Evans is also predicting a third rate cut this year, taking official interest rates to 0.75 per cent and says the RBA’s official cash rate could fall as low as 0.5 per cent.

Aussies are world champions – at debt, Oi Oi Oi !

The average levels of debt held by Australian households is rising and approaching levels that pose a risk to the economy according to analysis from Moody’s Analytics.

“Australia’s households are amongst the highest leveraged in the developed world,” reads a Moody’s research note issued this week. The lion’s share of Aussie debt is tied to property said Moody’s .

UBS economist George Tharenou told ABC that household debt-to-income ratio has lifted to a record high of 199 per cent.

Moody’s analysts said another RBA rate cut could encourage households to take on more debt.

“This is an undesirable position to be in,” said Moody’s “Particularly given the questions around sustainability of the potentially rising debt load.”

MoneyPlace targets homebuyers for personal loans

Personal loan provider MoneyPlace is growing loan sales by 250 per cent per year.

MonayPlace’s Alf Vasta said many borrowers were homebuyers looking to make specific purchases or sort out their debts and finances before, or after, making a home purchase.

Mr Vasta said a personal loan is not just good for financing a specific asset, “but as a tool to face challenges pre-, mid-, or post-mortgage.”

Mr Vasta told Mortgage Business that personal loans are great for debt consolidation for people preparing to apply for a home loan, especially after APRA’s recent changes to credit card debt.

MoneyPlace offers 3, 5 and 7 year unsecured personal loans from $5,000 to $45,000. MoneyPlace charges interest rates bases a personalised interest rate based on a borrower’s credit history, between 7.65 per cent and 26.99 per cent.

Compare MoneyPlace’s personal loan rates with personal loans from Australian banks, credit unions and other lenders at InfoChoice.

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