Melbourne developer Spacious Group has completed Voyage Altona, one of the closest new apartment developments to Altona Beach.

Off the plan purchasers have started moving into the 49-apartment project on Pier Street, with the remaining move-in-ready one-, two- and three-bedroom apartments starting from just over $500,000.

Display apartments have now been fitted out, allowing prospective buyers to inspect the completed residences by appointment.

[smartcode_project:default project_id=112195 project_image_fid=372638]

The completed apartments feature open-plan living and dining areas which extend onto private balconies and terraces, while full-height glazing maximises natural light throughout the interiors.&nbsp;

Hybrid timber-look flooring, stone benchtops, Miele appliances, porcelain-tiled bathrooms and generous storage feature throughout the building which also features landscaped communal areas, expansive shared terraces, lift access and secure on-grade parking.

Drawing inspiration from its bayside setting, Voyage adopts a restrained palette of warm neutral tones and textured finishes. Many of the apartments take advantage of views across Port Phillip Bay, while the indoor-outdoor living spaces have been designed to make the most of the coastal outlook.

[smartcode_project:default project_id=112195 project_image_fid=3286]

Voyage was developed to address what Spacious Group identified as an undersupply of higher-quality apartment product in Altona, with a focus on owner-occupiers looking to remain within the bayside community.

"Voyage responds to very strong local buyer demand for quality, owner-occupier-focused product," says Barry Plant Projects Director Jarrod Farey, who has handled sales since the project's launch.

"The project delivers an elevated lifestyle proposition, with its design and quality of finish far exceeding anything previously produced in the area, as well as its proximity to Pier Street Village and the beach."

The majority of purchasers have been local downsizers and owner-occupiers looking to stay within the Altona community but who previously had limited opportunities to buy a brand-new apartment.

[smartcode_project_cta:default project_id=112195]

Joel Robinson

Spacious Group completes Voyage Altona in Altona's beachside precinct

Homecorp has secured approval for a $360 million apartment development at Budds Beach, paving the way for one of the Gold Coast's most amenity-rich residential projects to launch later this year.

Gold Coast City Council has approved Lýon Residences, a 32-level tower that will deliver 178 two and three-bedroom apartments across a prominent corner site at 8-10 Acacia Avenue and 25-27 Oak Avenue.

The approval comes as developers continue to invest in premium lifestyle-driven apartment projects on the Gold Coast, where owner occupiers are increasingly prioritising amenity as much as apartment size and location.

<a href="https://www.apartments.com.au/new-apartments/l-on-residences-25-27-oak-avenue-surfers-paradise-qld-4217">Lýon Residences</a> has been designed around a resort-style wellness offering, headlined by a Moroccan-inspired spa precinct featuring treatment rooms, a Nordic sauna and steam room, hot and cold plunge pools, a soaking pool and a residents-only juice bar.

The rooftop will include a heated infinity pool and spa, residents' lounge with private kitchen and bar, gymnasium, yoga and Pilates studio, outdoor entertaining areas and barbecue facilities overlooking the Surfers Paradise skyline.

<img alt="Lyon" data-entity-type="file" data-entity-uuid="2d3e29af-8793-486e-a684-52cef862241f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-15%20at%204.32.26%E2%80%AFPM.png?VersionId=ayG2zpLf3SS6Zy8XmKDcQods4kVWb0gm" />

Homecorp Founder and CEO Ron Bakir said Budds Beach provided the ideal location for the company's latest luxury apartment project.

"Budds Beach represents one of the most unique and sought-after pockets of the Gold Coast, and Lýon Residences has been designed to reflect that sense of rarity and refinement," Bakir said.

The project arrives as wellness continues to become a defining feature of new residential developments both in Australia and internationally.

The latest Global Wellness Institute figures show wellness real estate remains the fastest-growing segment of the global wellness economy and is forecast to exceed $1.8 trillion by 2030. Australia continues to rank among the world's 15 largest wellness real estate markets, with developers increasingly integrating health, recreation and community facilities into apartment projects.

Queensland is also experiencing strong population growth, with the Gold Coast continuing to outperform many other Australian cities as demand for new housing remains elevated ahead of the 2032 Olympic and Paralympic Games.

Bakir said the project had been designed to respond to that shift in buyer expectations.

"Strong population growth and sustained demand across the Gold Coast continue to highlight the need for well-designed new housing supply. Lýon Residences responds directly to this demand while setting a new benchmark for residential living," he said.

Each apartment has been designed to maximise views across the coastline, the Nerang River and the Gold Coast hinterland.

Located just minutes from Surfers Paradise beach and the Broadwater, the development also offers easy access to the light rail network, Broadbeach and Burleigh Heads.

Early site works are underway, with construction expected to commence later this year.

Homecorp approved for Budds Beach apartment tower, Lýon Residences

New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.

Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.

Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.

[smartcode_project:default project_id=28384 project_image_fid=3823]

Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.

The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.

"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.

"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."

[smartcode_project:default project_id=28384 project_image_fid=3826]

The rarity of the development hasn't been lost on prospective buyers, McSweeney says.

For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.

"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."

The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/N_FowNW0wu8?si=vb25XFq1wZ-iufAW" title="YouTube video player" width="560"></iframe>

A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.

The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.

At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.

[smartcode_project:default project_id=28384 project_image_fid=372542]

The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.

Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.

Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.

"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."

Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.

[smartcode_project_cta:default project_id=28384]

North-facing Swan River views drive demand at Rivière Residences in Applecross

Nearly 60 per cent of apartments at McNab Group's $220 million The Tannery development in Brisbane's West End have sold ahead of the project's public launch, including a suburb-record $2.57 million sale for a two-bedroom apartment.

The early sales campaign has secured buyers for 50 of the project's 87 apartments, highlighting continued demand for larger owner-occupier apartments that combine generous floorplans with premium lifestyle amenities in one of Brisbane's most tightly held inner-city suburbs.

[smartcode_project:default project_id=143337 project_image_fid=374768]

McNab Group Executive Chairman Michael McNab said selling more than half the project before launch reflected changing buyer expectations.

"Selling more than half the project before public sales open tells us buyers are actively seeking apartments that offer something genuinely different," McNab said.

"Today's buyers are looking beyond four walls. They want homes that genuinely enhance the way they live, with spaces that support health, connection and everyday wellbeing."

[smartcode_project:default project_id=143337 project_image_fid=374767]

A key point of difference for the project is the adaptive reuse of the heritage-listed Dixon's Tannery building, which will become The Retreat, a residents-only wellness precinct rather than being redeveloped into additional apartments.

The Retreat will feature a sauna and steam room, hot and cold plunge pools, a commercial-grade gym, Pilates studio, cinema, library, co-working spaces and private dining room. Rooftop amenities will include a swimming pool, landscaped gardens, outdoor entertaining areas and dog-friendly spaces.

[smartcode_project:default project_id=143337 project_image_fid=374760]

Designed by Cottee Parker Architects with interiors by Tom Mark Henry and landscape architecture by Aspect Studios, The Tannery comprises 87 two, three and four-bedroom apartments across 11 levels overlooking the Brisbane River.

Cottee Parker principal Dee Passenger said preserving the original tannery building had been central to the project's design.

"The easy option would have been to maximise the site's development potential with additional apartments. Instead, McNab has chosen to preserve the original tannery as a shared wellness retreat, ensuring this important piece of Brisbane's history remains at the heart of the community."

Passenger said sustainability also played a key role in the design, with materials from the original industrial site salvaged and repurposed throughout the development.

[smartcode_project:default project_id=143337 project_image_fid=374761]

Motiv CEO Carly Cottam said buyers had responded strongly to the combination of larger apartments, wellness facilities and the West End lifestyle.

"We are seeing more buyers looking for homes in the sky that provide the space and functionality of a traditional home, while benefiting from the convenience and lifestyle that apartment living brings," Cottam said.

She said purchasers included both owner occupiers and investors, with demand coming from local buyers as well as interstate purchasers.

Coinciding with the public launch, McNab also announced a partnership with Queensland Ballet, whose neighbouring Thomas Dixon Centre shares historical ties with the original Dixon family.

Located on a 4,465 sqm site at 439 Montague Road, The Tannery overlooks the Brisbane River and is around 10 minutes from the CBD.

Construction is underway, with completion expected in the second half of 2027.

[smartcode_project_cta:default project_id=143337]

More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

McNab's The Tannery nears 60 per cent sold before public release, sets two-bedroom West End record

Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.

The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.

"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.

"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”

He said the declaration reflected the rapid progress achieved since acquiring control of the site.

"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."

When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.

"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.

"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."

The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a>

The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.

Takada previously said the design was driven by a philosophy of integrating nature into the built environment.

"The concept for this development is born from our design approach to naturalising architecture," Takada said.

"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."

Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.

"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.

The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;

The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.

Iwan Sunito secures approval for $1.9 billion Five Dock mixed-use precinct

Banking

<html><body>
Bank Australia’s 2016 financial results released today show strong profitable growth with a net profit after tax of $22.6 million.
It came with overall asset growth of 13 percent taking the bank’s assets to more than $4 billion with a trend toward younger customers.
“We’ve also had significant growth in new customers, particularly from our target market of socially aware consumers and we have decreased the average age of customers by attracting younger customers to the bank,” the managing director Damien Walsh said.
He advised the bank’s decision to forgo a portion of profit this year to focus on investing in the bank’s brand and technology had delivered strong business growth.
“We achieved deposit and loan growth both well above system which is pleasing in the current low interest rate and competitive environment,” Walsh said.
Customer deposits grew by 12 percent and customer loans by 21 percent.
“Our profit sees the bank grow customer owned reserves by $24 million to $435.9 million; and with a very strong capital adequacy ratio of 18.66 percent we are well positioned to grow and provide customers with highly competitive prices, products and services in the years to come.
“The result represents a return on assets of 0.59 percent, which is healthy particularly given that we’ve made some significant investments in our technology, people and brand over the past year,” Walsh said.
Each year Bank Australia commissions CANSTAR to compare its pricing (rates and fees) on deposit and loan products with the average advertised rates of the four major banks. Over and above the $22.6 million of after tax profit, the bank returned pricing benefits in the amount of $33.2 million to customers.
Highlights of Bank Australia’s 2015-16 financial performance
<ul>
<li>Full year net profit after tax of $22.6 million is a strong result given the pressure on net interest margin and the ongoing investment in the bank’s brand, service delivery and technology.</li>
<li>Net interest margin declined due to competitive pressures across the market.</li>
<li>Customer owned reserves grew to $435.9 million strengthening our overall capital position.</li>
<li>Capital adequacy at 18.66% remains very strong.</li>
<li>Loan funding of $1,084 million (21% annual growth) was 46% greater than 2015. Importantly, a large proportion of growth continues to come via online and broker channels delivering customer convenience and extending the geographic presence of the bank.</li>
<li>Responsible credit assessment criteria were maintained while achieving growth.</li>
<li>Deposits grew by 12% reflecting confidence in the bank’s responsible approach to banking and price competitiveness.</li>
<li>The bank’s investment grade credit rating with Standard &amp; Poor’s remains BBB+/Stable/A-2.</li>
</ul>
Summary of Bank Australia’s 2015-16 financial performance:
<table class="x_MsoTableGrid8" style="width: 100%;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" nowrap width="34%">
 
</td>
<td valign="top" nowrap width="8%">
 
</td>
<td valign="top" width="14%">
Jun-15
</td>
<td valign="top" width="14%">
Jun-16
</td>
<td valign="top" nowrap width="14%">
Change
</td>
<td valign="top" nowrap width="14%">
% Change*
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Net Profit After Tax
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
23.96
</td>
<td valign="top" width="14%">
22.59
</td>
<td valign="top" nowrap width="14%">
(1.37)
</td>
<td valign="top" nowrap width="14%">
(5.72%)
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Net Interest Revenue
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
75.61
</td>
<td valign="top" width="14%">
80.48
</td>
<td valign="top" nowrap width="14%">
4.87
</td>
<td valign="top" nowrap width="14%">
6.44%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Net Interest Margin
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
2.22%
</td>
<td valign="top" width="14%">
2.11%
</td>
<td valign="top" nowrap width="14%">
(0.11%)
</td>
<td valign="top" nowrap width="14%">
(4.95%)
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Cost to Income
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
64.30%
</td>
<td valign="top" width="14%">
66.95%
</td>
<td valign="top" nowrap width="14%">
2.65%
</td>
<td valign="top" nowrap width="14%">
4.12%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Return on Assets
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
0.70%
</td>
<td valign="top" width="14%">
0.59%
</td>
<td valign="top" nowrap width="14%">
(0.11%)
</td>
<td valign="top" nowrap width="14%">
(15.71%)
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Assets
</td>
<td valign="top" nowrap width="8%">
$b
</td>
<td valign="top" width="14%">
3.58
</td>
<td valign="top" width="14%">
4.04
</td>
<td valign="top" nowrap width="14%">
0.46
</td>
<td valign="top" nowrap width="14%">
12.85%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Customer Deposits
</td>
<td valign="top" nowrap width="8%">
$b
</td>
<td valign="top" width="14%">
3.03
</td>
<td valign="top" width="14%">
3.40
</td>
<td valign="top" nowrap width="14%">
0.37
</td>
<td valign="top" nowrap width="14%">
12.46%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Gross Loans
</td>
<td valign="top" nowrap width="8%">
$b
</td>
<td valign="top" width="14%">
2.66
</td>
<td valign="top" width="14%">
3.22
</td>
<td valign="top" nowrap width="14%">
0.56
</td>
<td valign="top" nowrap width="14%">
20.98%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Loans Funded
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
742.87
</td>
<td valign="top" width="14%">
1,084.08
</td>
<td valign="top" nowrap width="14%">
341.21
</td>
<td valign="top" nowrap width="14%">
45.93%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Reserves
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
412.00
</td>
<td valign="top" width="14%">
435.95
</td>
<td valign="top" nowrap width="14%">
23.95
</td>
<td valign="top" nowrap width="14%">
5.81%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Capital Adequacy
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
19.74%
</td>
<td valign="top" width="14%">
18.66%
</td>
<td valign="top" nowrap width="14%">
(1.08%)
</td>
<td valign="top" nowrap width="14%">
(5.47%)
</td>
</tr>
</tbody></table>
* The % change calculation is based on the actual full figure
</body></html>

jonathanchancellor-7SQnKwU6yx

Bank Australia's success in securing younger customers

<html><body>
<img src="https://counter.theconversation.edu.au/content/65885/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The US$185 million fine levied on US bank Wells Fargo for unauthorised accounts opened by employees seeking bonuses appears to have become a tipping point for industry action in Australia.
Reacting to sales targets and bonus incentives, Wells Fargo employees artificially inflated their sales by secretly opening accounts. They then transferred funds using these accounts, triggering overdraft fees and other charges. Staff also falsely opened credit card and debit card accounts, causing credit card holders to incur annual fees. Debit cards were issued with PINs, again without the customer’s knowledge. More than two million such fake accounts were created.
This week Westpac chief Brian Hartzer said the bank would remove all product-related incentives across its 2,000 branch tellers and instead base their incentives on customer feedback about service quality.
The move comes after a long history of sales-driven banking cultures. Wells Fargo confirmed it had fired over 5,300 employees for such behaviour, between January 2011 and March 2016.
Employees of Wells Fargo had been vocal about the high-pressure culture that existed in the bank in an LA Times article in 2013. They spoke of being regularly humiliated by managers in front of their colleagues and threatened with the sack for failing to meet targets. Some begged family members to sign up and open unneeded accounts. The root cause of this pressure on Wells Fargo employees was the bank’s corporate culture, and a cross-selling target of at least eight financial products per customer.
US regulators say the record fine levied on Wells Fargo should “Serve notice to the entire industry that such initiatives need to be carefully monitored as a basic element in any company’s compliance program, to make sure that incentives for employees are aligned with the welfare of customers”.
Such misdemeanour’s by financial services providers are not unusual. Earlier in 2016 Santander Bank was fined US$10 million for allegedly enrolling customers in overdraft protection services that they had never authorised.
Regulators in Australia have also become concerned that sales incentives are harming the financial industry’s integrity. The Australian Bankers Association is conducting a review of “product sales commissions and product based payments that could lead to poor customer outcomes”.
In its submission to the review, the Finance Sector Union of Australia (FSU) has focused on these poor customer outcomes. It puts much of the blame on the “conflicted remuneration” that causes “the systematic application of remuneration and work systems that drive employees to sell and/or push products and services” to bank customers.
The FSU submission is based on a survey of 1,298 bank employees undertaken in August 2016. Based on feedback from members, it says bank staff employment is often dependent on “their ability to gain referrals, sell the product of the week or reach a volume based target”. The FSU concludes that “existing remuneration systems are having a detrimental effect on the lives of bank employees” and that the Australian banking industry’s remuneration systems is “causing the industry harm”.
This week Reserve Bank Governor Philip Lowe also weighed in, saying remuneration structures within financial institutions should promote behaviour that benefits not just an institution, but its client.
Australian banks are some of the most profitable in the world and are in a strong position to lead by example in gaining and then sustaining the trust of their customers. Cross selling of products and services can be achieved by a rigorous focus on customer service that produces not just customer satisfaction, but customer delight.
Achieving this means confronting the dilemmas created by “conflicted remuneration,” whereby bank executive rewards are directly related to sales and subsequent profitability. If sales targets continue to lead to customer harm, banks will lose the vital ingredient of trust that banking relies on. And those calling for a banking royal commission will be granted their wish.
Steve Worthington is adjunct professor, Swinburne University of Technology and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/steve-worthington-138" target="_blank">here</a>.
</body></html>

jchancellor-FAypfDUnLy

Banks can target service before sales to avoid a banking royal commission

<html><body>
Commonwealth Bank of Australia's former head of private banking Adrian Hondros is understood to be taking up the post of chief executive at the homebuilder, Porter Davis. 
Hondros will start at the nation's 11th-largest home builder in the new role in October, sources told the Australian Financial Review's Street Talk column.
The Melbourne-based company was founded by Anthony Roberts, David Shergold, and Daniel Stutterd around two decades ago. 
Roberts will remain managing director of Porter Davis when Hondros takes the reins.
The company delivers about 1,500 homes annually and in 2016 entered the Queensland market. 
Hondros had been with CBA for more than seven years after stints as chief of the HBOS St Andrew's insurance business and at the National Australia Bank. 
</body></html>

Hondros off to homebuilder Porter Davis

<html><body>
<img src="https://counter.theconversation.edu.au/content/63396/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The biggest Australian banks are fairing well in a year of increased pressure to reform from politicians, international events like the Britain’s exit from the European Union and more regulation from the Australian Prudential Regulation Authority (APRA).
A number of interrelated factors have contributed to the relatively strong performance of the Australian banks. For instance, the banks have limited exposure to the types of securities which led to massive losses for their counterparts in other countries. The banks also heavily rely on domestic loans, particularly the low risk household sector, so better lending standards and a proactive approach to prudential supervision by APRA may have contributed.
The Basel III regulatory requirements, brought in after the 2008 financial crisis, emphasise holding an increased amount of subordinated debt, as a measure of market discipline. However all the big four banks are holding less and less subordinated borrowings. More specifically, it declined by more than 50% from 2007 to 2014, according to our calculations.
APRA limits banks’ holdings of higher risk securitised assets, these are loans packaged into securities, to a maximum of 25% of the banks' loan portfolio. These are high risk if not properly understood or defined, as happened with United States home loans, blamed for the start of the global financial crisis.
When Australian banks calculate bank capital requirements, they need to fully account for securitised assets. This is a rule from APRA that goes beyond international standards, to reflect the risk inherent in these products.
Inter-bank liquidity tightened significantly with all banks increasing their holdings of Exchange Settlements Accounts at the Reserve Bank, this a form of low risk liquidity. Australian banks have lower interbank deposits compared to their Europe and USA counterparts and are also heavily involved in long term wholesale funding and are required to hold more liquid assets including government debt to deal with liquidity. All of this makes Australian banks less risky in times of crisis because spillover effects from other banks are less likely.
<h2>There has been a significant increase in concentration in the Australian banking industry since the global financial crisis. For example with Westpac and the Commonwealth Bank of Australia taking over St. George Bank and Bank West, respectively.</h2>
Following mergers, the big four account for 88 percent of the Australian banking system assets. This reinforces the idea that the banks are “too big to fail”.
The banks have also moved to more fee generating activities, which increases risk, but to a lesser extent in Australian banks. Data shows between 1998 and 2014, on average, 1.2 percent greater interest income was generated relative to non-interest income for Australian banks, according to our analysis. However, there is also similar evidence for the top eight publicly-listed Canadian banks. They exhibit on an average, a 2.5 percent increase in net interest revenue relative to non-interest income over the same time period.
This reinforces that Australian and Canadian banks demonstrated extra ordinary resilience during the credit turmoil in the global financial crisis. The World Economic Forum in 2008 reported that Australia and Canada were among the top four safest banking systems in the world.
Large banks in Australia are active in international markets through direct ownership of foreign based banks and having offshore operations as a source of capital. Deregulation of banking in countries such as the USA, Canada, Australia and many developing countries has opened up new markets for foreign banks. Australian banks' largest international exposure is to New Zealand, where all big four banks retain sizeable operations.
Although the growing interdependence among international economies and financial markets is certain to continue, the impact of Brexit on Australian banks remains minimal. It remains to be seen in the long-run how Australian banks will weather the international banking/economic developments.
As a last measure of the bank health, we can measure the domestic systemic risk with a methodology based on one used by the official Basel Committee on Banking Supervision. Based on July 2016 monthly data, the big four banks account for 80.38 percent of the systemic risk in the financial system and the riskiest, from highest to lowest, are the National Australia Bank, the Commonwealth Bank of Australia, Westpac and ANZ.
Mamiza Haq is lecturer in Finance, The University of Queensland, and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/mamiza-haq-143872" target="_blank">here</a>.
Necmi K Avkiran is associate professor in Banking and Finance, The University of Queensland and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/necmi-k-avkiran-298084" target="_blank">here</a>.
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Company results wrap: weighing up the risks behind the profits of Australia’s big four banks

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Bank Australia has been named as the Canstar Customer Owned Bank of the Year.
Canstar evaluated the product offerings of over 50 customer owned banks in Australia.
Mitchell Watson, Canstar group manager, research, said Bank Australia not only offered outstanding value products within the lending space, but also offered its customers value for money when it comes to its savings and transaction accounts.
They researched 266 deposit accounts, 1,211 home loans, 63 credit cards and 200 personal loans.
Damien Walsh, Bank Australia’s managing director said the award was an endorsement of the organisation’s unique mutual prosperity proposition – offering great value to the customer while also operating in an ethical and socially responsible manner.
 
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Bank Australia named Canstar Customer Owned Bank of the Year

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GUEST OBSERVER
We are not convinced that giving the largest banks in Australia $7.4 billion over the next ten years is good for the budget. – Opposition Leader Bill Shorten, leaders’ debate speech, May 29, 2016.
Opposition Leader Bill Shorten’s line of attack during the leaders’ debate focused squarely on the Coalition’s long-term plan to cut the company tax rate from 30 percent to 25 percent.
Twice during the debate Shorten said the proposed tax cuts equated to giving A$7.4 billion over ten years to Australia’s big four banks (National Australia Bank, the Commonwealth Bank, ANZ and Westpac).
Is that right?
Checking the source
When asked for a source to support that assertion, a Labor spokeswoman referred The Conversation to modelling conducted by think-tank The Australia Institute.
The Labor spokeswoman said:
"Bill was emphasising the clear point of contrast in this election campaign, which is that Malcolm Turnbull wants to spend $50 billion giving huge companies a tax cut while Labor wants to invest in schools, Medicare and growing good jobs."
The Australia Institute modelling
In a press release, The Australia Institute said that for their economic modelling:
"The value of company tax provisions was derived from 2015 full year annual reports for the big four banks. That figure summed to $11,123 million. That figure was projected forward to 2026-27 to give the no-change scenario."
To arrive at the figure of $7.4 billion, The Australia Institute modelling assumed bank profit would increase in line with nominal Gross Domestic Product. Under this assumption, the amount of tax payable would also increase in line with nominal GDP. This would give nominal increases of:
<ul>
<li>2.5 percent in 2015-16;</li>
<li>4.25 percent in 2016-17; and</li>
<li>5 percent in 2017-18 and subsequent years.</li>
</ul>
As the think tank noted in its press release, the company tax cuts would not affect the big banks until 2024-25. That’s when the 30 percent company tax rate will fall to 27 percent for all companies with further reductions of 1 percent per year, hitting 25% in 2026-27.
The Australia Institute calculated the following results:
<a href="/images/2016/05/31/image-20160530-7713-8cr5ue.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/31/image-20160530-7713-8cr5ue.png" alt="">
A reasonable guesstimate – but not a fact
On these calculations, the “$7.4 billion over the next ten years” claim is not a fact. But it’s also not an unreasonable guesstimate – although it is, of course, really over the three years from 2024-25 through 2026-27. There is no advantage to the big banks over the first seven of the next ten years.
According to the Australian Taxation Office, the four big banks paid a total of $9.5 billion in company tax in the 2013-14 financial year.
The government has proposed increasing the turnover threshold below which the rate of company tax payable is 27.5 percent, from $10 million in 2016-17 to $1 billion in 2022-23.
The government’s proposed policy says that the company tax rate for all companies (including the four big banks) with turnover exceeding $1 billion will fall from 30 percent to 27 percent in 2024-25, and then by a further one percentage point in 2025-26 and another percentage point (to 25 percent) in 2026-27.
So, on that basis, The Australia Institute’s maths checks out.
A grain of salt
As with all economic modelling, this modelling and any claims based on it should be taken with a large grain of salt.
Any assumption about the banks’ profit growth over the next ten years is entirely arbitrary, and I have no idea whether it is at all justified. Only time will tell.
If the banks' profits grew by only 2 percent per annum over this period, then the benefit to them from the cut in the company tax rate proposed by the Coalition would be “only” $4.8 billion; if they grew by 10% per annum the benefit to them would be $12 billion (over the three years from 2024-25 to 2026-27).
Verdict
Shorten’s statement relies on modelling assumptions made by The Australia Institute think-tank about bank profit growth. It is not a statement of fact but rather a guesstimate. It is not an unreasonable guesstimate, but depends entirely on whether the think tank’s assumptions about bank profit growth come true or not.  
 <a href="https://theconversation.com/profiles/saul-eslake-665" rel="author">Saul Eslake</a> is vice-chancellor’s fellow, University of Tasmania and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/saul-eslake-665" target="_blank">here</a>.
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Will Australia's largest banks get a $7.4 billion benefit from tax cuts over next decade? Saul Eslake 

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The Australian Property Institute has called for the establishment of a Royal Commission into banking. 
API Chief Executive Mike Zissler said he is seeing significant changes within the industry which are not in the best interests of the banks and financiers, the valuation profession and the community as a whole.
According to him industry must change if the valuation profession is to continue to remain an independent, objective and authoritative provider of valuation services to the Australian banking and financing industry. 
“We need a reset in which banks and valuers can come into a room and be pragmatic about what is happening," he said.
“Why is there so much distrust and enmity between the parties and why is it that members of the API cannot speak openly with the banks without implied threats and withdrawal of contracts as a punishment for speaking out?
“My members are more than unhappy and feel trapped. They must be able to speak with the lenders, whom they contract with, without fear of reprisal. 
“Companies have been pitted off against each other over pricing, and prices have been forced back to 1980’s rates. Yet so much more work and prescription is now required. Many companies would need to cut their margins to sub-cost pricing in order to be competitive in a tender process. Companies will be forced out of business which will inevitably lead to a monopoly and potential market failure. Moreover, some of the firms that have taken on the new work simply won’t have the capacity to service it particularly in areas they don’t have a presence,” he said. 
“As the CEO of a members-based organisation it greatly concerns me that my members are intimidated by the banking industry, which apparently has failed to recognise the harm it is doing in the long run to itself, the industry and the community.”
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mick.cee-iDmgDDAmu8

Banks bully valuers to accept below-cost fees: Australia Property Institute

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Is a royal commission into banking required? I think not. There have been many problematic incidents adversely affecting customers in the banking and financial sector in Australia – although whether they are more frequent and more substantive than elsewhere is open to question.
Moreover, examining those incidents, determining whether there are systemic causes, and identifying possible solutions can be done in simpler and potentially more effective ways. Indeed, even to the extent that the objective is to pinpoint responsibility for past wrongdoings, it is not clear that a royal commission has advantages over investigations by well-resourced and empowered financial regulators.
Royal commissions are likely to work best when there is one specific major issue to be addressed or where there is some substantive matter of policy formulation on which a primarily legal, inquisitorial, analysis can shed light. The current and recent concerns involve a wide range of different types of problems resulting in financial consumer detriment.
They involve actions of individuals within various types of financial organisations as well as how the objectives, culture, ethics and governance of the organisations themselves encourage, induce or incentivise particular types of behaviour.
These are not topics that are best addressed from a primarily legal perspective, or analysis of which requires the trappings and powers, and costs, of a royal commission. Rather, there is a need for analysis of what gives rise to these perceived problems and what policy (legislative or regulatory) changes might be made to reduce such problems.
And ultimately, some form of (at least implicit) cost-benefit analysis is warranted since the bad behaviour of concern is a byproduct of institutional arrangements and structures for providing financial services and products to meet the needs of consumers. Designing policy to balance efficiency and fairness in provision with mitigation of adverse effects is not a simple task.
Identifying problems and designing policy solutions can be done either via existing financial regulators with their existing (or enhanced) powers or through some other form of less costly and disruptive method of inquiry.
The recent David Murray-led Australian Financial System Inquiry (of which I was a member) examined the financial sector from a very broad perspective. Its terms of reference included reference to corporate governance and implications for outcomes for consumers of financial products and services consumers. But this was only one item on a long list of issues required to be investigated within a very short time frame.
The Murray Inquiry made a number of recommendations related to improving outcomes for consumers of financial products. One could argue that it would make sense to see whether the recommendations of the Murray Inquiry (once fully implemented), together with ongoing changes in global financial regulatory standards, improve the performance of the financial sector in this regard before undertaking another major review.
On the other hand it might be argued that the Murray Inquiry did not, reflecting the constraints of its terms of reference and short time frame, delve far enough into issues of ethics, culture, and governance. While these were front of mind in its deliberations, its approach was to design policy recommendations which would induce better outcomes.
These included addressing incentives created by conflicted remuneration arrangements, introducing manufacturer and distributor responsibilities for appropriate design and marketing of financial products and services, and improved resourcing and powers of financial regulators. That approach reflected a view that “good” ethics and culture cannot be created by regulation, that they are the responsibility of the leadership of financial institutions, but that policy settings can influence incentives to create and maintain good ethical standards and culture.
If it is believed that the problems are more deep seated, then perhaps further inquiry is warranted – but on topics which hardly warrant or need a royal commission. A number of issues come readily to mind. One is whether enforced structural separation of financial institutions would facilitate improved governance, risk-taking, staff-customer interrelationships, and remuneration and incentive structures.
Another is whether requiring directors of banks to put interests of depositors ahead of shareholders (much as occurs in insurance where policy holders interests are legally accorded priority). Yet another would be what increase in penalties for wrongdoing and increased resourcing for investigation by regulators would appropriately limit wrongdoing while not unduly harming efficient and innovative supply of financial services.
These types of issues require “research” more than “inquiry”. They are not the sorts of questions that a royal commission process is suited to answer. Calling for a royal commission looks to have been a smart political move. But like the Abbott Government’s Royal Commission into Trade Unions it would be tainted by political overtones associated with the inquisitorial nature of the process.
Far better to find an approach that will be seen to reflect the more explicit analytical approach necessary to answer the very complex questions involving the interplay between ethics, culture, incentives, governance and behaviour.
Kevin Davis is research director of Australian Centre for FInancial Studies and professor of Finance at Melbourne and Monash Universities, Australian Centre for Financial Studies and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/kevin-davis-3497" target="_blank">here</a>.
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Why Australia doesn't need a banking industry royal commission

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Westpac consumer banking boss George Frazis says the Australian housing fundamentals remained strong.
Westpac has a $363 billion exposure to mortgages, with the bank having strengthened lending standards by lifting serviceability buffers and writing fewer loans with large leverage, he advised this week.
He dismissaed the US research house Variant Perception report last month that claimed Australia had “one of the biggest housing bubbles in history” and prices would fall 50 per cent in parts of Sydney and Melbourne.
“Hedge funds have been making those allegations for 20 years,” he told The Australian, claiming offshore funds “don’t understand the Australian mortgage market”.
“Basically we’ve got an environment where we’ve got responsible lending obligations (and) the incentives are aligned between the borrower and the bank to ensure effectively we do whatever we can to make sure people stay in their homes.
“We’ve got ... one million-plus customers; at the moment we have in the order of about 250 houses in repossession, so an extremely low number."
He said 74 percent of Westpac customers are ahead on their repayments.
“We’re actually breathing down the neck of Commonwealth Bank, we’re closing the gap on mortgages and we’ve stopped the gap growing in deposits, which I’m really pleased about,” he said.
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Westpac narrows gap on Commbank while dismissing housing bubble claims

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Contrary to what you might think, and despite recent upward pressures, bank funding costs fell in 2015.  The Reserve Bank of Australia (RBA) took a detailed look at this in its ever-enlightening Bulletin this week. The funding composition of Aussie banks is made up of liabilities, comprised predominantly of domestic deposits which today make up a greater share of total funding than was the case prior to the financial crisis. 
</div>
<div> </div>
<div>The remainder of banks' funding composition comprises short term debt, long term debt, equity, plus now a small amount of securitisation. </div>
<div> </div>
<div>Domestic deposits, which are a more stable form of funding, made up close to a 60 per cent share of the total by 2014, but this allocation has declined a little lately as the cost of wholesale debt became cheaper, and as banks raised equity in response to forthcoming changes to prudential regulation. </div>
<div> </div>
<div>Here's that composition in a chart provided by the RBA:</div>
<div> </div>
<div><a href="/images/2016/03/21/f2.jpg" target="_blank">Click to enlarge</a></div>
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<div> </div>
<div>
Debt funding costs While the official cash rate acts as an important "anchor" for bank funding costs, changes in the returns or compensation demanded by investors to hold debt can also influence banks' funding costs appreciably.
</div>
<div> </div>
<div>Debt funding costs for major banks fell materially by 70 basis points ("bps") in 2015, in part driven by 25bps interest rate cuts delivered in February and May respectively. </div>
<div> </div>
<div>
Most of the decline in funding costs relative to the cash rate took place in the first half of the last calendar year, with costs reasonably stable in the second half of 2015. From yonder Bulletin, a chart of said debt funding costs once more, depicting the large decline in debt funding costs since 2008. 
</div>
<div> </div>
<div class="x_separator"><a href="/images/2016/03/21/f3.jpg" target="_blank">Click to enlarge</a></div>
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<div> </div>
<div>Notably markets are pricing a relatively higher weighted average debt funding cost for the non-major Aussie banks, a dynamic which did not exist so clearly before the financial crisis.</div>
<div> </div>
<div>
Wholesale funding In respect of wholesale funding, the volume of bank bond issuance in the last calendar year was pretty much in line with the year which preceded it, though banks issued a bit less in covered bonds and residential mortgage-backed securities (RMBS). 
</div>
<div> </div>
<div>In terms of the actual mix of wholesale funding, that didn't change all that much either through last year, though a bit of shift from offshore long term to short term debt did see a slight reduction in funding costs for the majors, according to the RBA:</div>
<div> </div>
<div>"Through 2015 declines in wholesale funding rates and the rolling over of existing higher-rate funding lowered the funding costs of major banks by 8 basis points more than the reductions in the cash rate".</div>
<div> </div>
<div>
Overall, then, the cost to banks of issuing new wholesale debt fell significantly at the beginning of 2015, and this lower level was sustained through most of the year.  This gradually flowed through to outstanding wholesale funding costs as the new cheaper debt replaced higher cost funding reaching maturity.
</div>
<div> </div>
<div>Towards the end of 2015, the cost of issuing new debt increased, which is angle that all the "bank funding costs are soaring" articles are coming from, although seen in context, funding costs remain a good deal lower than they have been over the years. </div>
<div> </div>
<div>Summarily, yields on new short term debt increased a bit to be higher than those on outstanding short term debt, but the cost of new long term debt was a little below the cost of corresponding outstanding debt.</div>
<a href="/images/2016/03/21/Funding.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/21/Funding.jpg" alt="">
<div>Although equity tends to be a relatively small share of banks’ aggregate balance sheets (at about 6 to 7 per cent), equity is generally speaking more expensive than debt, thus relatively small shifts in equity funding can have proportionately large effects on total funding costs.</div>
<div> </div>
<div>The major banks raised a significant amount of equity in 2015, in anticipation of upcoming changes to prudential regulation, about $21 billion worth in total, according to the RBA.</div>
<div> </div>
<div>Lending rates</div>
<div> </div>
<div>As for mortgage rates? Housing rates generally declined in line with the cash rate in the first half of last year, with the average outstanding interest rate on mortgages falling by about 50bps.</div>
<div> </div>
<div>As has been well covered in the financial media, in the second half of the year banks tweaked their lending rates such that the average outstanding housing interest rate for investor loans was only moderately lower over 2015, while rates for owner-occupiers declined by about 30bps. over the year. </div>
<div> </div>
<div><a href="/images/2016/03/21/F4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/03/21/F4.jpg" alt=""></div>
<div> </div>
<div> </div>
<div>
The implied spread of major banks - that being the difference between average lending rates and debt funding costs - increased by around 20bps over 2015, this change driven by a combination of the decline in average funding costs relative to the cash rate and an increase in the average lending rate. 
</div>
<div> </div>
<div>
However, the Reserve Bank noted that lending rates and debt funding costs do tend to move in line with each other in the longer run. The wrap Despite a moderate increase in debt funding costs recently and a range of equity raisings, funding costs are still lower than they were. With global interest rates so low, futures markets still expect the cash rate in Australia to be cut again by November this year, although banks may elect to retain a portion of any 25bps cut delivered in order to shore up their balance sheets further.  Alternatively banks may looking at increasing mortgage rates a little via out of cycle hikes.
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<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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