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Record profit for ANZ

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ANZ New Zealand posted a 27 percent gain in first-half cash profit, recording the biggest gain among the four operating divisions of Australia’s third-largest lender after growing its home loan book and cutting costs.

Cash profit, which excludes non-core items, rose to $887 million in the six months ended March 31, from $697 million a year earlier, the Auckland-based lender said in a statement. Statutory profit rose 31 percent to $853 million. Operating income rose 8 percent to $1.9 billion and operating expenses fell 5 percent to $725 million.

ANZ New Zealand is the nation’s biggest lender, having merged its operations with National Bank last year and phased out that brand. Its commercial operations were the biggest contributor to statutory profit, rising 14 percent to $377 million, while retail banking profit rose 25 percent to $222 million.

Its ANZ Wealth unit, which accounts for 25.8 percent of New Zealand KiwiSavers, lifted earnings to $121 million from $38 million, while earnings from its institutional arm slipped 2 percent to $163 million.

Cash profit for Melbourne-based parent Australia & New Zealand Banking Group rose 11 percent to A$3.52 billion, beating estimates in a Bloomberg survey. Net income climbed 15 percent to A$3.38 billion.

The parent’s results record a 38 percent gain to A$546 million in cash profit from New Zealand, the biggest quarterly growth among its divisions. That was driven by “above system growth in mortgages, a reduction in credit impairment charges (reflecting strong improvements in credit quality across the lending book), a 6 percent decrease in operating expenses and favourable foreign exchange translation.”

Cash profit from Australia rose 5 percent to A$1.48 billion and earnings from international and institutional banking rose 14 percent to A$1.37 billion. Global wealth earnings climbed 11 percent to $226 million.

The company will pay a first-half dividend of 83 Australian cents, or a total of A$2.3 billion, up 14 percent from a year earlier.

BusinessDesk

[…]

ANZ New Zealand records biggest first-half profit gain among units of Australian lender


ANZ New Zealand records biggest first-half profit gain among units of Australian lender

Thursday 1st May 2014

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ANZ New Zealand posted a 27 percent gain in first-half cash profit, recording the biggest gain among the four operating divisions of Australia’s third-largest lender after growing its home loan book and cutting costs.

Cash profit, which excludes non-core items, rose to $887 million in the six months ended March 31, from $697 million a year earlier, the Auckland-based lender said in a statement. Statutory profit rose 31 percent to $853 million. Operating income rose 8 percent to $1.9 billion and operating expenses fell 5 percent to $725 million.

ANZ New Zealand is the nation’s biggest lender, having merged its operations with National Bank last year and phased out that brand. Its commercial operations were the biggest contributor to statutory profit, rising 14 percent to $377 million, while retail banking profit rose 25 percent to $222 million.

Its ANZ Wealth unit, which accounts for 25.8 percent of New Zealand KiwiSavers, lifted earnings to $121 million from $38 million, while earnings from its institutional arm slipped 2 percent to $163 million.

Cash profit for Melbourne-based parent Australia & New Zealand Banking Group rose 11 percent to A$3.52 billion, beating estimates in a Bloomberg survey. Net income climbed 15 percent to A$3.38 billion.

The parent’s results record a 38 percent gain to A$546 million in cash profit from New Zealand, the biggest quarterly growth among its divisions. That was driven by “above system growth in mortgages, a reduction in credit impairment charges (reflecting strong improvements in credit quality across the lending book), a 6 percent decrease in operating expenses and favourable foreign exchange translation.”

Cash profit from Australia rose 5 percent to A$1.48 billion and earnings from international and institutional banking rose 14 percent to A$1.37 billion. Global wealth earnings climbed 11 percent to $226 million.

The company will pay a first-half dividend of 83 Australian cents, or a total of A$2.3 billion, up 14 percent from a year earlier.

(BusinessDesk)

BusinessDesk.co.nz




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[…]

IMF board approves $17 billion for Ukraine

WASHINGTON (AP) — The International Monetary Fund board on Wednesday approved a two-year, $17 billion loan package for cash-strapped Ukraine as it seeks to regain stability following Russia’s annexation of Crimea.

The IMF assistance pledged in March was hinged on economic reforms in Ukraine, including raising taxes, freezing the minimum wage and raising energy prices — all steps that could hit households hard and strain the interim government’s tenuous hold on power.

“Urgent actions were necessary. Urgent decisions were taken by Ukraine and decisions now have just been taken by the IMF,” IMF Managing Director Christine Lagarde told reporters at the monetary fund’s headquarters.

Ukraine’s interim government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.

The IMF’s decision to approve the $17 billion loan paves the way for Ukraine to receive $15 billion in additional assistance pledged by the World Bank, the European Union, Canada, Japan and other European entities, and $1 billion in loan guarantees from the U.S. that Congress recently approved. As part of the deal, Ukraine will be required to use some of the $17 billion loan to repay money it already owes the monetary fund.

Ukraine, a nation of 46 million, is in turmoil after Russia annexed Crimea. Russian President Vladimir Putin has massed 40,000 troops on Russia’s border with Ukraine in what many fear is the first step to an invasion. Russia’s actions have created a standoff with the United States and many European nations.

“Today’s final approval for the $17 billion IMF program marks a crucial milestone for Ukraine,” Treasury Secretary Jacob Lew said in a statement. “The IMF program, in conjunction with bilateral assistance from the United States and other nations, will enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth.”

Lagarde said there were risks to the IMF loan but that Ukraine had demonstrated during the past few weeks that it can undertake reforms, such as ones addressing its exchange rate and the price of natural gas. “We believe that Ukraine has an opportunity to seize the moment,” she said.

Asked about recent sanctions that the U.S. and European Union have imposed on Russia, Lagarde said only that the IMF was not designing sanctions, but was trying to improve the situation in Ukraine so that stability can be restored.

“We very strongly encourage the parties to negotiate to come to terms, and whether it’s a question of the future price of gas, the payment of arrears — we very much hope the partners will find an agreement,” she said.

Politics & GovernmentBudget, Tax & EconomyUkraineChristine Lagarde […]

IMF board approves $17 billion in assistance for Ukraine

WASHINGTON — The International Monetary Fund board on Wednesday approved a two-year, $17 billion loan package for cash-strapped Ukraine as it seeks to regain stability following Russia’s annexation of Crimea.

The IMF assistance pledged in March was hinged on economic reforms in Ukraine, including raising taxes, freezing the minimum wage and raising energy prices — all steps that could hit households hard and strain the interim government’s tenuous hold on power.

“Urgent actions were necessary. Urgent decisions were taken by Ukraine and decisions now have just been taken by the IMF,” IMF Managing Director Christine Lagarde told reporters at the monetary fund’s headquarters.

Ukraine’s interim government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.

The IMF’s decision to approve the $17 billion loan paves the way for Ukraine to receive $15 billion in additional assistance pledged by the World Bank, the European Union, Canada, Japan and other European entities, and $1 billion in loan guarantees from the U.S. that Congress recently approved. As part of the deal, Ukraine will be required to use some of the $17 billion loan to repay money it already owes the monetary fund.

Ukraine, a nation of 46 million, is in turmoil after Russia annexed Crimea. Russian President Vladimir Putin has massed 40,000 troops on Russia’s border with Ukraine in what many fear is the first step to an invasion. Russia’s actions have created a standoff with the United States and many European nations.

“Today’s final approval for the $17 billion IMF program marks a crucial milestone for Ukraine,” Treasury Secretary Jacob Lew said in a statement. “The IMF program, in conjunction with bilateral assistance from the United States and other nations, will enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth.”

Lagarde said there were risks to the IMF loan but that Ukraine had demonstrated during the past few weeks that it can undertake reforms, such as ones addressing its exchange rate and the price of natural gas. “We believe that Ukraine has an opportunity to seize the moment,” she said.

Asked about recent sanctions that the U.S. and European Union have imposed on Russia, Lagarde said only that the IMF was not designing sanctions, but was trying to improve the situation in Ukraine so that stability can be restored.

“We very strongly encourage the parties to negotiate to come to terms, and whether it’s a question of the future price of gas, the payment of arrears — we very much hope the partners will find an agreement,” she said.

[…]

Fitch Rates Nelnet Student Loan Trust 2014-3


Malaysia to open new budget airport in MH370 shadow

Sepang (Malaysia) (AFP) – Malaysia this week opens what it calls the world’s largest airport built specifically for low-cost airlines, a project driven by budget travel’s phenomenal growth but which debuts under the shadow of missing flight MH370. The $1.2 billion facility near the main Kuala Lumpur International Airport (KLIA) was originally targeted to open three years ago but has been hit by repeated delays, amid concerns over safety and subpar construction, even as costs have doubled. But the new KLIA2 budget terminal will begin operations Friday with an initial 56 flights, increasing the load as airlines move full operations over from a nearby existing facility in coming days. Its modern design features soaring ceilings, natural lighting, people-mover belts and improved connectivity with access to an existing express airport train to Kuala Lumpur 50 kilometres (31 miles) away.

[…]

LendUp opens up its API to spread safer payday lending across the …

More: LendUp opens up its API to spread safer payday lending across the …

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Low Cash-Out Share, Shorter Terms Point to Equity Build-Up

MCLEAN, VA–(Marketwired – Apr 30, 2014) – Freddie Mac (OTCQB: FMCC) today released the results of its first quarter 2014 quarterly refinance analysis, showing that borrowers will save on net more than $1 billion in interest payments over the coming year as they continue to shorten their payment terms and build equity in their homes.

News Facts

Of borrowers who refinanced during the first quarter of 2014, 39 percent shortened their loan term, up slightly from the previous quarter and the highest since 1992. In the first quarter, an estimated $6.5 billion in net home equity was cashed out during a refinance of conventional prime-credit home mortgages, largely unchanged from the previous quarter and $2 billion less than the same time one year ago. The peak in cash-out refinance volume was $84 billion during the second quarter of 2006. In aggregate, U.S. home equity grew by an estimated $2.1 trillion during 2013, according to the Federal Reserve Board’s Flow of Funds data. Much of this gain was attributable to home value gains. The average mortgage interest rate reduction in the first quarter was about 1.4 percentage points — or a savings of about 24 percent. On a $200,000 loan, that translates into interest savings of about $2,800 during the next 12 months. Homeowners who refinanced through HARP during the first quarter of 2014 benefited from an average mortgage interest rate reduction of 1.6 percentage points and will save an average of $3,200 in interest payments during the first 12 months, or about $260 every month. About 83 percent of those who refinanced their first-lien home mortgage maintained approximately the same loan amount or lowered their principal balance by paying in additional money at the closing table. The peak was 88 percent during the second quarter of 2012. The median age of the original loan outstanding before refinance increased to 7.3 years during the first quarter, the most since the analysis began in 1985.

Quotes
Attributed to Frank Nothaft, Freddie Mac vice president and chief economist:

“Roughly 17 percent of borrowers who refinanced in the first quarter chose to extract home equity versus 14 percent from the same time last year. This is well below the peak cash-out share of 89 percent the market experienced in the third quarter of 2006. However, even with the slight increase in the cash-out share, it’s still $2 billion less compared to first quarter of last year simply because the refinance share of originations continues to plummet.”

About the Quarterly Refinance Report
These estimates come from a sample of properties on which Freddie Mac has funded two successive conventional, first-mortgage loans, and the latest loan is for refinance rather than for purchase. The analysis does not track the use of funds made available from these refinances. The analysis also does not track loans paid off in entirety, with no new loan placed. Some loan products, such as 1-year ARMs and balloons, are based on a small number of transactions.

With the report for the first quarter of 2013, the calculation of the principal balance at payoff of the previous loan has been modified. Previously, the payoff balance was calculated as the amount due based on the loan’s amortization schedule, and “cash-in” was defined as a new loan amount that was less than the scheduled amortization amount. Data for 1994 to current have been recalculated using the actual payoff amount of the old loan, with an allowance for rounding down the principal at refinance; thus, from 1994 to present, “cash-in” is defined as a new loan amount that is at least $1,000 less than the payoff principal balance of the old loan. Data are presented under both methods for 1994 for comparison purposes.

First Quarter 2014 Refinance Statistics

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

LoansInvesting EducationFreddie Mac […]

Stagnant puddle

are wasting the Federal Reserve’s largesse. The central bank has swollen the cash balances at financial institutions with quantitative easing, but has not even kept pace with nominal .

The numbers are stark. Since March 2008, the has increased its holdings of Treasury and federally backed mortgage securities from $700 billion to $4 trillion. To pay for these, it mostly printed money. More technically, it provided banks with $2.7 trillion of new reserves, according to St. Louis Fed data.

The banks didn’t use the funds to stimulate the economy. Commercial and industrial loans, the principal driver of sustainable expansion, have increased by about 12 per cent, to $1.7 trillion. Consumer debt has jumped 44 per cent, but accounts for a smaller piece of the pie. The banks could have afforded such slow paces of loan growth, well below the 16 per cent increase in nominal GDP, without any help from .

Rather, the Fed’s money-printing accounts for the extra cash on banks’ balance sheets. Their holdings of cash, according to Fed data, have increased by 779 per cent to $2.8 trillion over the past six years. For banks, that does not mean piles of crisp new bills, but the balances at the Fed do pay a 0.25 per cent interest rate. Meanwhile, banks now lend out just three-quarters of their deposits, compared with more than 100 percent in March 2008.

The central bank’s purchases may not have contributed directly to economic growth. Still, they have been good for bank profits, because the cash at the Fed earns a little interest income without needing any equity backing, according to the Basel technique of calculating capital strength. QE has also helped keep up financial asset prices, as the ample supply of ready cash probably encouraged banks to increase their investments in longer-term government and so-called agency securities by 63 per cent, to $1.8 trillion.

On the other hand, the Fed’s intervention has not been the inflationary disaster feared by monetarist economists. Funds kept in the central bank’s isolation ward do not infect the economy with wage and price increases.

If the Fed wants banks to push money out into the real economy, it should stop paying them for cash deposits. Instead, it could start charging. A negative 0.5 per cent interest rate on reserves might encourage lending. It might also stimulate higher inflation.

[…]

Indiana Business Bancorp Reports First Quarter Results and Cash Dividend


Malaysia to open new budget airport in MH370 shadow

Sepang (Malaysia) (AFP) – Malaysia this week opens what it calls the world’s largest airport built specifically for low-cost airlines, a project driven by budget travel’s phenomenal growth but which debuts under the shadow of missing flight MH370. The $1.2 billion facility near the main Kuala Lumpur International Airport (KLIA) was originally targeted to open three years ago but has been hit by repeated delays, amid concerns over safety and subpar construction, even as costs have doubled. But the new KLIA2 budget terminal will begin operations Friday with an initial 56 flights, increasing the load as airlines move full operations over from a nearby existing facility in coming days. Its modern design features soaring ceilings, natural lighting, people-mover belts and improved connectivity with access to an existing express airport train to Kuala Lumpur 50 kilometres (31 miles) away.

[…]

Fitch Affirms SLM Student Loan Trust 2003-10 Notes; Outlook Remains Stable

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings affirms both the senior and subordinate student loan notes at ‘AAAsf’ issued by SLM Student Loan Trust 2003-10. The Rating Outlook remains Stable for both classes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch’s opinion, based on the guarantees provided by the transaction’s eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. On March 24, 2014, Fitch affirmed the U.S. sovereign rating at ‘AAA’ and assigned a Stable Outlook.

Sufficient Credit Enhancement (CE): The trust has relatively high expenses due to the notes being either auction rate or reset rate notes. While both the senior and subordinate notes will benefit from future excess spread, the senior notes also benefit from subordination provided by the class B note. As of February 2014, total parity is 100.00% and senior parity is 104.11% (3.94% CE). Cash is being released from the trust given that the 100% total parity is maintained.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.25% of the pool balance, and $3,012,925.

Acceptable Servicing Capabilities: Sallie Mae Inc., as servicer, is responsible for servicing the trust. Fitch believes Sallie Mae is an acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, ‘AAAsf’ FFELP ABS ratings will likely move in tandem with the ‘AAA’ U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch’s published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch takes the following rating actions as indicated:

SLM Student Loan Trust 2003-10:

–Class A-1A affirmed at ‘AAAsf’; Outlook Stable;

–Class A-1B affirmed at ‘AAAsf’; Outlook Stable;

–Class A-1C affirmed at ‘AAAsf’; Outlook Stable;

–Class A-1D affirmed at ‘AAAsf’; Outlook Stable;

–Class A-1E affirmed at ‘AAAsf’; Outlook Stable;

–Class A-1F affirmed at ‘AAAsf’; Outlook Stable;

–Class A-1G affirmed at ‘AAAsf’; Outlook Stable;

–Class A-1H affirmed at ‘AAAsf’; Outlook Stable;

–Class A-2 affirmed at ‘AAAsf’; Outlook Stable;

–Class A-3 affirmed at ‘AAAsf’; Outlook Stable;

–Class A-4 affirmed at ‘AAAsf’; Outlook Stable;

–Class B affirmed at ‘BBsf’; Outlook Stable.

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (May 24, 2013);

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’ (May 17, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria — Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

Additional Disclosure

Solicitation Status

null/gws/en/disclosure/solicitation?pr_id=828096

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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sandro.scenga@fitchratings.com […]