Trending Financial News 8 November
Which bank gets the most complaints?
Commonwealth Bank is the biggest financial institution in Australia by numbers of customers and recorded the most complaints against it from customers in the 8 months to 30 September 2019, according to data released yesterday by the Australian Financial Complaints Authority.
3890 complaints were lodged against CBA with ANZ Bank second with 2,746 complaints.
Suncorp, NAB, Westpac, IAG, Citigroup, finance company Multipli, QBE, American Express, Latitude and PayPal were also among the most complained about institutions over the last 8 months.
AFCA said there was a large number of complaints about responsible lending relating to credit cards, personal loans and home loans.
3,000 Aussies complain about scammers in their bank account
Almost 3,000 Australians have complained about how their bank or credit union dealt with unauthorised transactions on their bank account or credit card in the last 8 months, according to data released yesterday by the Australian Financial Complaints Authority.
There were 2,927 complaints about unauthorised transactions said AFCA. Unauthorised transactions typically involve scams, where the scammer gets access to an account with permission or tricks the bank customer into transferring funds.
“The methods used by scammers have become increasingly sophisticated,” said AFCA in a statement, “And are designed to overcome a financial firm’s unauthorized transaction procedures.”
Commonwealth Bank eases loan assessments
Commonwealth Bank has lowered its floor rate for assessing mortgage serviceability from 5.75 per cent to 5.40 per cent. The 2.5 per cent interest rate buffer remains unchanged.
That means that home loan applicants will be assessed on their ability to repay the loan if rates were to increase 2.5 per cent above where they are now, or 5.40 per cent, whichever is higher.
The cut to the floor rate means more applicants could potentially get approved for loans with CBA.
Bank complaints revealed by Datacube
Consumers can now see how many complaints have been lodged with the financial ombudsman about their own bank or any other financial institution. The Australian Financial Complaints Authority’s new online ‘visual and comparative report about financial complaints’ is called the AFCA Datacube.
Users can easily see the numbers of complaints made against any banking institution and the resolution rate. The Datacube also lets people compare institutions and their rate of resolution of complaints.
Complaining customers share in $112M compo
44,988 Australians complained about their banking institution in eight months ending 30 June 2019. 19,245 of the complaints were resolved early, at the registration and referral stage. $112.1 million was paid in compensation by banks and other institutions to complainants during the 8 month period.
14.4 per cent of complaints related to credit cards, 12 per cent to consumer loans, 11.9 per cent to home loans.
5 per cent of all complaints to AFCA were not resolved by the financial firm involved and required a determination by the financial ombudsman service. 68 per cent of determinations were made in favour of the complainant with the remaining 32 per cent of determinations in favour of the financial firm.
Big banks are losing mortgage market share
More home buyers are looking beyond the big four banks and moving their loans to smaller lenders. The combined home loan market share of the four big banks contracted by 0.92 percentage points to 81.2 per cent over the year to September 2019, according to new data released yesterday by KPMG.
The average margin between big bank loan rates and deposit rates has fallen 0.08 percentage points to 1.94 per cent. Westpac’s net interest margin is the highest of the big four banks at 2.12 per cent while Commonwealth Bank’s NIM is 2.10 per cent.
Compare the big bank’s home loan offers with other lenders at InfoChoice.
NAB reports a very difficult year
National Australia Bank yesterday reported a 14 per cent fall in net profit for the year to September to $4.8 billion. NAB reported that it has set aside $1.2 billion for customer remediation costs.
NAB’s market share in home lending fell from 15.4 per cent in September 2018 to 15.1 per cent now. NAB has a 22.1 per cent share of Australian business lending. NAB’s market share of all household deposits fell from 14.1 per cent to 13.6 per cent.
What is NAB’s share dividend in 2019?
NAB’s dividend payout in 2019 will be lower than 2018.
National Australia Bank yesterday reported a big fall in profit in 2019 as it budgets for more customer compensation.
Operating expenses rose, bad debt expenses were up, the bank’s net interest margin was down to just 1.78 per cent and earnings per share crashed 32.7 per cent as a result of new equity raised during the year.
NAB declared a final dividend of 83 cents a share, on top of the first half dividend of 83 cents taking total NAB dividend payout for the year to $1.66, down 32 cents from 2018.
NAB chief executive Phil Chronican said the lower NAB dividend in 2019 would allow the bank to add to its capital position.