To refinance is pay off one or more old debts by getting a new loan from a new or existing lender. Refinancing is a common way for homeowners to take advantage of lowered interest rates or improved credit scores. It is sometimes an appropriate way to resolve financial problems, but often tends to make matters worse. As with any financial decision, it pays to do research and read the small print.
NRW Bank issued their first annual green bond report on their 2014 EUR500m green bond issuance. The report includes disclosure on the full use of proceeds (74% for renewable energy and energy efficiency and 26% for water), and it offers environmental impact assessment on about 2/3 of the use of proceeds. In total, they estimate that total emission reductions triggered by the underlying projects accumulate to more than 800,000 tons during the life time of the bond, which translates to 400 tons of CO2 saved per EUR 1 million of investment. The share currently not included in the impact reporting includes construction and administration buildings, which are reported to have a positive climate impact, as the buildings adhere to the EU Energy efficiency Directive 2016. Great level of detail provided by NRW!
So far, only the preliminary stage of the ABS deal is completed: a portfolio of $125m of energy efficiency receivables suitable for bond issuance have been financed. To achieve this, the IDB has offered a $50m warehousing credit line used to purchase energy efficiency receivables from two Mexican Energy Service Companies (ESCOs), ECON Soluciones Energéticas Integrales, S.A.P.I de C.V. (ECON) and Veolus Energía y Gestión Técnica S.A. de C.V. (VEOLUS). Importantly, the receivables included in the portfolio are standardised, which is crucial to facilitate subsequent bundling into sizeable asset-backed securities.
Aside from its excellent finance programs and packages, ANZ Bank is also committed to helping out the Australian community through special finance programs and environment-friendly initiatives. For families with low incomes, ANZ Bank has developed the Saver Plus program. This program aims to assist low-income families in developing proper money management habits by building financial assets and savings accounts. These finance assets can then be used by the low-income families as educational funds.
One of the bank’s excellent personal finance programs is the ANZ Personal Loans. This personal lending program is meant for you if you simply can’t wait to acquire a brand-new home accessory or you prefer to combine other balances and loans into a single payment. The Personal Loan Program comes with easy and flexible credit terms and a variety of repayment options. Moreover, you can sign your ANZ personal loan account for a reliable insurance program that is backed up by QBE Insurance Australia and ING Life. As for the formal requirements when applying for an ANZ Personal Loan, the bank’s official website offers a comprehensive guideline regarding the application process and contact information for further inquiries.
Experienced senior executive with 20+ years in financial services, particularly consumer credit cards and personal loans. Full P&L drive and ownership of complex, large scale businesses in highly dynamic, sophisticated and challenging markets. Considerable new product development success, and management of full product suites across credit cards, prepaid cards and personal loans. Led large teams across critical functions including product management, portfolio management, projects and new product development.
Our overall position with the banks remains unchanged. However, in hindsight the changes being made by APRA (and global regulators) have been improving the outlook for the banks over the past few years and with default and arrears rates low (and falling) the majors should have been on positive outlook. The situation today is slightly different where the economic environment does not seem to match the provisioning strategy of the banks. This is partially mitigated by the new capital requirements set out under APRA’s D-SIB buffer and the position on a new floor for residential mortgage RWA requirements.
ANZ has reported strong results for the first half of FY2015 , better (in a relative sense) than some of its its peers. The reported statutory net profit of A$3.5 bn (cash earnings of A$3,676m) was up 3% on the year primarily driven by loan growth from retail and commercial operations (ANZ has been investing to grow its relatively underweight share of the New South Wales market and has hired 600 staff to achieve this target). The key points of interest were the net interest margin dropping 0.08% to 2.04 (driven by competition), trading and wealth management income bucked the market trend and legacy IT upgrades and increased staff numbers weighed on the bottom line.
Although capital was not the focus of the earnings announcement, ANZ has made clear its intention of assets sales (i.e Esanda, minority stakes in Indonesia’s Panin Bank, Malaysia’s AMMB, and China’s Shanghai Rural and Commercial Bank and Bank of Tianjin) in previous weeks. ANZ’s capital ratios are adequate based on current regulatory requirements. The common equity tier 1 ratio (CET1) crept lower over the half to 8.72% (down from 8.79%). This was a result of an increase in risk weighted assets (and movements in currency) rather than any lack of organic capital generation.
ANZ has significantly increased its holdings of high quality liquid assets (HQLA) over the half and this is evident in the liquidity coverage ratio (LCR) at 119% (111% at September 2014). As with the other banks this is the new normal and with contingent liquidity available from the Reserve Banks’s committed liquidity fund (CLF) we see no reason why liquidity will become an issue over the coming year. The funding composition remained fairly stable over the period with the exception of a 3% swing away from deposits to term funding. During the six months $11 billion of term funding was issued which represents between 40-60% of the full year target depending on loan growth and funding composition.
We expect the next six months will be a less favorable period for ANZ as operating conditions are currently optimised for the banks and we expect regulatory changes (on capital and loan growth limits), increased costs and a deteriorating economic environment to impact performance. However, the change will be subtle and provided the regulatory changes can be implemented without major disruption we believe the credit profile will benefit in the long term. Asset quality will remain benign as low interest rates and an appreciating US Dollar support borrowers. The biggest risk to ANZ remains its Asian exposure during a period of capital outflows and economic volatility. ANZ has committed to its long term super regional strategy and we would expect that they will closely monitor any deteriorating performance.
Liquidity and funding conditions have improved significantly since the introduction of the Liquidity Coverage Ratio (LCR) implemented on 1 January 2015. WBC has reported an LCR of 114% based liquid assets of A$123 billion (we note that WBC has ~50% of its liquid assets derived from the RBA’s committed liquidity facility). From a funding perspective customer deposits increased by 3% on the half (8% on the year) which meant the deposit to loan ratio decreased to 69.5%, however the reported Stable Funding Ratio (internal ratio) was maintained at 83.2%. During the six months ~$16 billion of term funding was issued which represents between 40-60% of the full year target depending on loan growth and funding composition.
The current operating conditions for WBC are strong with wholesale debt markets open and asset quality remaining strong. However, we expect over the next six months WBC will be focused on changes to regulation around its residential mortgage book (both owner occupier and investor) as the potential new requirements will constrain loan growth while increasing minimum capital requirements. WBC’s larger market share in the residential mortgage market means it is sensitive to macroeconomic changes (i.e unemployment) and we will carefully monitor arrears rates on unsecured lending for signs of deterioration. However, given the low interest rate environment and quality of the loan book we do not expect a significant deterioration in the asset quality over the next 6 months.