Trending Financial News 3 September 2019

New Aussie bank taking deposits from tomorrow

Australia’s newest business bank, Judo Bank, is opening for deposits with a line of competitively priced term products from Wednesday 4 September 2019.

“We’re focusing on the term deposit market and will be offering a complement of term products this week aimed at personal customers,” Judo chief executive Joseph Healy told Banking Day.

“Our term deposits will be available online from Wednesday and the pricing will be at or near the top of the industry rates tables.”

Judo Bank attracting business from government

New Aussie business bank, Judo Bank has already collected $144 million in deposits according to the latest edition of APRA’s monthly banking statistics.

Most of the deposits come from government and community organisations with local government depositing $50 million and $28 million coming from community groups and charities.

Judo has attracted $16 million in deposits from business customers. Judo has lent out $314 million to business.

Scott Morrison warns economy is ‘very difficult’

The Prime Minister Scott Morrison has warned Australians that the economy is in ‘very difficult’ times. June quarter national accounts are due tomorrow and are expected to show that economic growth is slowing.

A bad result would raise pressure on the Reserve Bank and the federal government to inject stimulus into the economy with lower rates, higher government spending or more tax cuts.

Cash Converters records 90% increase in bad debts

Payday lender and pawn broker Cash Converters is reviewing and tightening credit procedures after reporting that bad debts almost doubled in the last year.

Cash Converters lent $220.5 million in 2018/19, mainly in very small personal loans and car loans. That was up 27.9 per cent over the previous year largely due to growth in car loans through its vehicle finance business, Green Light Auto.

Despite the growth in lending, Cash Converters reported a loss of $1.7 million (down from a profit of $22.5 million last year) after paying $16.4 million settlement following a class action lawsuit.

Bad and doubtful debts grew 90.5 per cent prompting Cash Converters to invest in a review to determine “deeper insights into the propensity of customers to repay.”

WARNING: NAB SCAM

NSW Police and Scamwatch are warning NAB customers that a sophisticated new scam is now hitting email inboxes and fooling NAB customers into giving up their account details and other personal information.

The email purports to come from “NAB Online” and claims that “a hold has been placed on your card because ‘usage in a different location’ has been detected,” said NSW Police.

Recipients are then invited to visit a branch or click on a link to “get verified within minutes.”

Police say delete the email immediately and definitely do not click on links.

Fixed Rates: Home buyers can now lock in sub-three per cent mortgage repayments until 2023.

There are now 22 three-year fixed rate home loan products for owner-occupiers with advertised rates under three per cent listed by InfoChoice. The lowest comparison rate for a three-year fixed rate mortgage is 3.04 per cent pa.

There are now four 4-year fixed rate home loan products for owner-occupiers with advertised rates under three per cent listed by InfoChoice. The lowest comparison rate for a four-year fixed rate mortgage is 3.76 per cent pa.

“It really is amazing to think that a young couple buying their first home can lock in these extraordinary low rates for up to four years, until mid-2023,” said Vadim Taube, CEO of leading Australian financial comparison site, InfoChoice.

“And for anyone with a home loan around 4 or 5 per cent, the incentives to compare and refinance to a cheaper rate are now all but irresistible.

RBA expected to sit on sidelines

The Reserve Bank is not expected to change official interest rates in September.

The RBA’s official rate is 1.0 per cent following rate cuts in June and July.

“We think the RBA will resist further rate cuts as long as possible – to wait for more evidence of the effect of previous cuts in June and July before moving again,” said Vadim Taube.

“However, the RBA has been very clear with his messaging that more rate cuts will come if necessary.

Most borrowers sticking with variable rates

“Most borrowers are sticking with variable rates, despite the long and low fixed rates on offer, according to search trends on InfoChoice,” said CEO of InfoChoice Vadim Taube.

“So Aussies are listening to the governor of the Reserve Bank and they expect rates to stay low or go even lower.”

The lowest variable rate home loan listed by InfoChoice is 2.89 per cent p.a. (comparison rate 2.89 per cent p.a.) from Reduce Home Loan’s Low Rider Variable loan.

“Home buyers can give themselves a massive rate cut themselves by comparing their loan with the most competitive rates in the market, and switching to a cheaper deal,” said Vadim Taube.

Borrowers can lock in low rates for four years

There are now 22 three-year fixed rate home loan products for owner-occupiers with advertised rates under three per cent listed by InfoChoice. The lowest comparison rate for a three-year fixed rate mortgage is 3.04 per cent pa.

There are now four 4-year fixed rate home loan products for owner-occupiers with advertised rates under three per cent listed by InfoChoice. The lowest comparison rate for a four-year fixed rate mortgage is 3.76 per cent pa.

“It really is amazing to think that a young couple buying their first home can lock in these extraordinary low rates for up to four years, until mid-2023,” said Vadim Taube, CEO of leading Australian financial comparison site, InfoChoice.

Reduce Home Loans’ Home Owners Dream 3 Year Fixed is currently charging 2.79 per cent pa (comparison rate: 3.04 per cent pa). St George Bank and Bank of Melbourne’s Owner Occupier P&I with Advantage Package (LVR<60%) is charging 2.94 per cent pa (Comparison rate 3.76 per cent pa).