Three more banks could face investor concern over flawed mortgage outsourcing deals with Perpetual Ltd that give rise to confusion over who has the legal authority to complete the transactions.

An analyst says that Perpetual could lose as much as 10 per cent of its revenue if all three banks, National Australia Bank, AMP Bank Ltd and Bendigo and Adelaide Bank - in addition to ANZ Banking Group Ltd - drop their business with the fund manager over the flawed contracts.

Perpetual on Monday confirmed that National Australia Bank’s (NAB) HomeSide mortgage lending unit, AMP Bank and Bendigo and Adelaide Bank Bank outsourced the processing of mortgage applications to its mortgage services business.

Credit Suisse analyst Arjan Van Veen said in the unlikely event the banks broke their outsourcing contracts with Perpetual over the issue, Perpetual’s total revenue would drop by 10 per cent.
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Australia’s fourth largest lender ANZ Banking Group Ltd has reiterated that it is not interested in selling ING to AMP Ltd, saying it’s focusing on organic growth.

ANZ chief executive Mike Smith said rumours the bank would sell ING to AMP in return for 30 per cent of the wealth manager were false.

Mr Smith said ANZ was focusing on growing its wealth management organically and was not considering any takeovers at the moment.

“That’s exactly what I’d call it - speculation,” Mr Smith told ABC television on Sunday.
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AMP Ltd will increase its standard variable mortgage rate rate by 30 basis points following last week’s rate rise by the Reserve Bank of Australia.

AMP Banking’s standard variable home loan rate will rise to 6.69 per cent, effective Wednesday for new customers and Friday for existing customers, the wealth manager said on Tuesday.

The RBA increased the official cash rate by 25 basis points on Tuesday last week.

Westpac since has increased its standard variable mortgage rate by 45 basis points, Commonwealth Bank raised their standard variable rate by 37 basis points and ANZ Banking Group (ANZ) raised their standard variable rate by 35 basis points respectively.
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The biggest quarterly fall in inflation for more than a decade opens the way for another big interest rate cut to help kick-start the struggling economy, economists say.

Headline inflation, as measured by the consumer price index (CPI), fell 0.3 per cent in the December quarter, the Australian Bureau of Statistics said on Wednesday.

This was the biggest quarterly fall since the September quarter of 1997, and followed the previous quarter’s 1.2 per cent rise.
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Australia could face a rough ride over the next few months after the financial meltdown in the US, with local banks less likely to pass on in full any cuts to official interest rates and those nearing retirement age facing a devaluation of their nest eggs.

The local share market closed 4.3 per cent lower today, after falling to its worst level in almost three years and losing about $55 billion in value, as investors fled most sectors.

“For investors generally I think it is going to remain a fairly rough ride for some time to come,” AMP Capital Investors chief economist Shane Oliver said.
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Mortgage broker Aussie Home Loans, today announced that it has entered into a distribution agreement with AMP to provide its 220,000 customers with mortgage protection insurance.

The strategic alliance between the two companies, following a tender process contested by several major financial institutions, is another major third party agreement that Aussie has entered into to deliver the best financial products to the Australian public.
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Interest rates might be at the peak of the cycle after the Reserve Bank of Australia (RBA) talked up the prospects of a slowing economy, while leaving rates on hold.

The RBA today kept interest rates unchanged for the fourth consecutive month, leaving the official cash rate at a 12-year high of 7.25 per cent, after its board meeting today. Full Story