Financial Services Talking Points 28-09-2015


Date: Monday, 28th September 2015


The “Capital Conundrum” (English)

Source: Macquarie Group, 22 September 2015

Bankers should pay attention to the impacts of recent changes by the APRA on the large Australian banks, including an increase in the risk weighting of mortgages from 16% to 25%, and global benchmarking. The impact is likely to see bank’s ROE fall from about 15% to 12%. Whilst APRA’s idea of increasing capital and slowing lending growth to help protect has merit, it can lead to significant downward spiral in economic growth and ultimately bank security, like Capital Conundrum.


From offshore: Australia is “toast” (English)

Source: NAB, 21 September 2015

Analysts believed that the outlook for the Australian economy and AUD have never experienced overwhelming negativity as they do now. The unanimity of this view suggests investors are short AUD and highlights the risk of a short-term squeeze, even if the medium-term outlook is still for a weaker AUD. Although one investor did say that they were not that negative on Australia, another described the Australian economy as “toast”.


Financial literacy a major challenge with credit card interest rates (English)

Source: ANZ, 25 September 2015

Whether the RBA move the cash rate up or down, credit card interest rates could not be more than X per cent higher than the cash rate. Superficially there is already plenty of competition in the Australian credit card market with over 240 different cards on offer. But surveys show low awareness by consumers of their credit card interest rate and of which cards offer the lowest card rates.


Swisse bought by Hong Kong company Biostime for $1.67 billion (English)

Source: KIAMA independent, 17 September 2015

Swisse, the country’s largest wellness company, and has just been sold to overseas buyers for an astonishing $1.67 billion. Hong Kong-listed company Biostime International Holdings on Thursday won the auction to buy Swisse, beating out two Chinese companies, Hony Capital and manufacturer Shanghai Pharma. Swisse will remain based in Melbourne, with a head office in Collingwood, but 83 per cent of the company is now in the hands of Biostime.


Other Financial Services Working Group Members’ market updates:

Australian Markets Weekly by National Australia Bank

Australian Economic Perspective by Commonwealth Bank

Australian Economic Reports by Westpac Banking Corporation

ANZ Bluenotes by ANZ Bank

Market Insights by Macquarie Group


This brief summarises a range of publicly available news articles in both Chinese and English and AustCham takes no responsibility for the accuracy of the information in these articles. In addition, the views and opinions reflected in these articles are not necessarily representative of AustCham.


AustCham Beijing’s Financial Services Working Group is chaired by Zhongmin Zha (Westpac Banking Corporation). For more details on how to get involved in the AustCham Beijing Financial Services Working Group, please contact Andrew Britz.


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