Big Aussie Bank for sale – going cheap. AMP has refused to comment on speculation it is selling its retail banking arm – AMP Bank. Last month, AMP’s deal to sell its life insurance business collapsed. The Australian reported that AMP has hired advisers for a possible sale but has not taken a final decision to sell. AMP Bank is one of only a few banking institutions to expand its retail deposit base in June, according to data from APRA. The Australian reports that AMP wants $2 billion for AMP Bank. RBA stays on sidelines in August. The Reserve Bank of Australia has left the official cash interest rate unchanged for August at 1.0 per cent. The RBA board noted increasing uncertainty in the global economy due to trade and technology disputes and lower than expected economic growth in Australia in 2019. Aussie households are “weighed down” by low income growth and declining housing prices said the RBA board. Compo impacts Commonwealth Bank profits. Australia’s biggest bank, the Commonwealth Bank has reported an 8.1 per cent fall in profits to $8.6 billion for the financial year ending June 2019, from $9.4billion in 2018. Commonwealth Bank paid $2.2 billion during the year in remediation costs, up from $1 billion in 2018. Commonwealth Bank CEO Matt Comyn said: “This year’s headline results were impacted by customer remediation costs, revenue forgone for the benefit of customers and elevated risk and compliance expenses.” “Our core business continued to perform well,” said Mr Comyn, “underpinned by growth in home lending, business lending and deposits.” Look out Afterpay – CommBank Klarna is coming. Australia’s biggest bank, the Commonwealth Bank announced it has invested $147.9 million to buy into Buy Now, Pay Later app Klarna. Klarna has 60 million customers in Europe. Commonwealth Bank will assist Klarna to launch in Australia to compete with other Buy Now, Pay Later services like Afterpay, Openpay, Zip and Humm. “We will become Klarna’s exclusive partner in Australia,” said CBA in a statement. RBA tells Aussies – Low rates are here to stay. Unemployment is up slightly to 5.2 per cent in July and inflation edged higher to 1.6 per cent in the June quarter according to data released by the ABS. Yesterday the monthly monetary policy statement from the Reserve Bank signalled that rates will stay low for the foreseeable future. In short, Australians should expect a long period of low interest rates. The RBA board said: “It is reasonable to expect that an extended period of low interest rates will be required … to … reduce unemployment and [make] progress towards the inflation target.” The Australian National University’s ‘RBA Shadow Board’ of nine respected economists says there is a 33 per cent probability of more rate cuts and 38 per cent probability of rate increases over the remainder of 2019. Savers need to get active. The Reserve Bank board has clearly signalled that low interest rates are here for an extended period of time. Savings account rates have come down significantly in the last three months. “Savers need to actively manage their cash deposits in order to stay ahead of inflation,” said Vadim Taube, chief executive of InfoChoice. “Inflation is now 1.6 per cent so that is the break-even point for savers. “If you not getting 1.6 per cent on your savings, your cash is losing value,” said Mr Taube. “Savings rates are under pressure but good deals can still be found on at-call savings accounts and term deposits. “Don’t let your savings get stuck on a low base rate after the introductory bonus rate has expired, because you are probably getting a lower return than inflation,” said Mr Taube.