Financial Services Talking Points | 13/04/17

In today’s talking points: Mortgages drove new loan growth in 2016 at China’s four largest commercial banks; Australia’s jobs report for March has smashed expectations

China’s Big Four Banks Binge on Mortgages

 Mortgages drove new loan growth in 2016 at China’s four largest commercial banks, highlighting the scale of money tied up in the frothy property sector. The Industrial and Commercial Bank of China Ltd., Agricultural Bank of China Ltd., Bank of China and China Construction Bank Corp. saw between 64% and 82% of their new loans last year go toward mortgages, totaling 2.7 trillion yuan ($391 billion). Such high levels of private-sector debt run against the government’s push for consumption-driven growth, as borrowers will need to pay off mortgages with money that could be spent to help the larger economy. The percentage increase in new loans was derived from calculations made from the banks’ annual reports, released at the end of March.

 Read more at Caixin Global


Australia’s jobs report smashes expectations

 Australia’s jobs report for March has smashed expectations. According to the ABS, employment increased by a massive 60,900 in seasonally adjusted terms, easily surpassing the 20,000 increase that had been expected by economists. February’s decline, previously reported as a drop of 6,400, was also revised higher to show an increase of 2,800. The lift in employment was the largest since September 2015, and was the sixth consecutive month where an increase was recorded. The ABS said that an increase in employment was observed across the survey’s eight sample groups, including the incoming rotation group. Total employment now stands at 12.06 million, the highest level on record.

Read more at Business Insider


Australian Supermarket Giant, Steers Away From 5c Piece

Woolies have flipped the coin as it transitions its prices to round numbers, whether it be up or down it plans to move all its 20,000 plus products across. In a bid to focus on customer experience, convenience and ease Woolworths head of buying and merchandising Steve Donohue, confirms this incentive has seen customers responding well. Coles also strives to provide simple price points for its customers to help manage their weekly budgets with their introduction of $2 milk and $1 bread through they still have many remaining staggered price endings in 99c, 95c,45c or 50c. Supermarket retailers such as Aldi and IGA are yet to join the rounded prices movement, with food manufacturers voicing concern with changing their package sizes, and possibly having to increase their prices to adjust leaving them in no-man’s land. With Australian’s smallest coin now actually costing 6c to produce, Mint chief executive Ross MacDiamid says it has lost its utility. It will lose interest from the public with the decline of cash and rise on contactless payments, retailers could soon be forced to round up their prices.



Aussie Start-Up Success, Hind Technology Drives Without Investors

After only two years from being founded, electronics design builder Hind Technology is struggling to keep up with the demand of their robot control software. Founder Jatinder Grewal states that their projection is to ship 1,000 controllers a month with a revenue of $700,000. The control boards named Masso, are reliable and cheaper with this new technology set to generate Australian jobs as the company grows rapidly. Grewal has also discovered that the American market is driving the sales with huge growth opportunities for expansion and commercialisation in Asia. Mathew Benjamin from AsiaRecon believes Australia is a rich source of start-up talent, especially in the tangible talent capacity. There are a lot of strength for Australian companies to stay on home soil, however if your market and customer are overseas that is where you need to be, confirms James Alexander, University of Sydney Union. Alexander also states once established these companies are highly likely to bring these networks to Australia and enrich business on home soil.