A move by major banks to lift their interest rates higher than the central bank’s rises may mean official rates are left on hold in early 2010, Commonwealth Bank of Australia (CBA) chief executive Ralph Norris says.

The Reserve Bank’s 25 basis point rate rise to an official cash rate (OCR) of 3.75 per cent in December was followed by Westpac’s controversial 45 basis point rate hike for home loan borrowers.

CBA lifted its standard variable rate on home loans by 37 basis points, ANZ lifted its rate by 35 basis points while National Australia Bank (NAB) matched the Reserve.

Mr Norris said the banks’ controversial moves may result in the Reserve leaving rates on hold when it next meets.

“I think given the fact that there have been interest rate increases over and above the (official cash rate) then I think it is a possibility that we might not see an increase in February,” he told Sky Business.
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Commonwealth Bank of Australia (CBA) has warned that it may increase interest rates because of additional costs associated with proposed rules that require a greater proportion of liquid assets to be held on bank balance sheets.

CBA chief executive Ralph Norris told AAP the introduction of new liquidity rules by the prudential regulator will force the bank to hike interest rates by up to seven basis points.

“I think at this stage we’d be in the category of four to seven (basis points),” Mr Norris said when asked for CBA’s estimate on the additional costs required.

CBA’s estimate is in line with analysts’ expectations but tilts higher than the five basis points estimated by the Australian Prudential Regulation Authority (APRA), whose proposed tightening of the Australian bank liquidity regime has drawn uniform criticism from bank chiefs.
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Commonwealth Bank of Australia Ltd (CBA) chief executive Ralph Norris says the country’s biggest lender is well placed to improve its financial performance in 2010.

However, he warned that the current financial year would present challenges and in response CBA would maintain its conservative settings.

“We recognise that we are well placed to continue to strengthen our business franchise and improve our financial performance and returns,” Mr Norris told the company’s annual general meeting in Perth, according to a filed transcript.

“However, the 2010 year will present challenges for your group and its customers and the outlook is by no means clear.
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Commonwealth Bank of Australia Ltd chief executive Sir Ralph Norris says he would be surprised if banks raise home loan rates faster than increases to the official overnight cash rate.

“If you look at interest rates, the governor of the Reserve Bank has made it very clear that the emergency setting of three per cent for the official cash rate is unlikely to stay and there will be an upward move in rates over time,” Sir Ralph told journalists on Wednesday.

“I would be surprised if that were the case” he said, when asked whether mortgage rates would rise faster than the cash rate.

Australia’s big four banks were criticised earlier this year because their cuts to mortgage rates weren’t as low as the Reserve Bank of Australia’s (RBA) cuts to the official cash rate.
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Commonwealth Bank of Australia Ltd (CBA) chief executive Ralph Norris pay package increased by six per cent last financial year even though the bank reported a slight decline in net profit and cut dividends.

However, Mr Norris, his executive team and the directors of the bank will have their salary and fees cut this financial year, in a move CBA announced in April, in light of the global financial crisis.

CBA on Wednesday said Mr Norris’s pay package rose by six per cent to $9.21 million in 2008/09 as his long-term share-based payments were increased.

Mr Norris’ fixed cash salary rose four per cent to $3.25 million, from $3.12 million in the previous financial year, the Sydney-based bank said in its annual report.
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Commonwealth Bank chief Ralph Norris says expenses from bad debts are likely to stabilise or improve during the year ahead, and his company will look for acquisitions.

In an interview on ABC television on Sunday, Mr Norris was cautiously optimistic that the bank had put the worst of its bad debt woes behind it.

Last week the Commonwealth Bank announced its earnings results, with a $2.93 billion expense related to bad debts.

Mr Norris said in the 2009-10 financial year the bad debt level should be about the same, although the bank retained a slightly lower bias on the figures.
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Commonwealth Bank of Australia Ltd (CBA) has acknowledged that some of the bank’s lending practices contributed to the hardship faced by clients of collapsed financial adviser Storm Financial Ltd.

Australia’s biggest lender will suspend all repayment obligations until August 31 for all loans in relation to Storm Financial, Sydney-based CBA said in a statement on Wednesday.

“We are not proud of our involvement in some of these issues and we are working toward a fair and equitable outcome for our affected customers,” chief executive Ralph Norris said.

“Our customers can be assured that where we have done wrong, we will put it right.
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The sharply contracting economy is responsible for the loss of 400 jobs at BankWest says the Commonwealth Bank, following its takeover of the Perth-based entity.

Bankwest’s owner - the Commonwealth Bank of Australia (CBA) - has announced 250 jobs will be axed in WA and 150 in other states, citing the economic crisis and BankWest’s “high cost base”.

The decision comes after four years of rapid expansion for the former WA bank, including an increase in its workforce from 3,340 to 5,100.
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Commonwealth Bank of Australia Ltd (CBA) chief executive Ralph Norris’ cast iron commitment to preserve BankWest jobs evaporated on Monday after the wholly-owned subsidiary cut 400 jobs due to the economic downturn.

Five months after CBA acquired BankWest together with St Andrew’s Australia for a total $2.1 billion, BankWest said around 250 Perth-based employees in back-office roles will be notified of redundancy in coming weeks.

Another 150 employees across Sydney, Melbourne and Brisbane will also lose their jobs, capping the end of four years of rapid expansion by BankWest that promised to bring fresh competition to retail banking on the eastern seaboard.
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The loss of 400 jobs at BankWest will “stabilise” the bank, West Australian Premier Colin Barnett says.

The Commonwealth Bank of Australia (CBA), which owns Perth-based BankWest, has announced plans to axe 250 jobs in Perth and 150 on the east coast.

It said the cuts were necessary amid the tough economic climate.

But the Finance Sector Union has attacked bank executives for reneging on a promise made last year, as CBA’s acquisition of the bank went ahead, that no jobs would be lost in the west.
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Australia is better prepared than most countries to weather the global economic slowdown, helped by the biggest boost in disposable income in the nation’s history, says Commonwealth Bank chief executive Ralph Norris.

Mr Norris said CBA economists estimated that the combination of tax cuts, lower fuel prices and interest rate reductions had resulted in an 11 per cent boost to the average Australian’s disposable income over the past six months.

“That is equivalent to almost three annual wage increases and is by far and away the biggest increase in disposable income, on average, in the history of Australia,” he said.
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Commonwealth Bank of Australia Ltd chief executive officer Ralph Norris says loan losses and provisions will increase significantly in the first half of fiscal 2009 because of company failures and the economic slowdown.

“We remain cautious about the outlook for at least the next 18 months,” Mr Norris will tell the bank’s annual general meeting in Melbourne today.
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Commonwealth Bank of Australia Ltd (CBA) will buy a 33 per cent interest in mortgage broker Aussie Home Loans.

CBA chief executive Ralph Norris says the minority stake was a strategic investment and will give the country’s largest home loan lender a stronger foothold in the mortgage market.

“As Australia’s largest home loan provider, it makes good strategic sense to look at alternative investments in this industry that will continue to bring benefits to shareholders and consumers,” Mr Norris said.
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Commonwealth Bank of Australia Ltd (CBA) will spend $580 million over the next four years modernising its existing banking legacy systems.

CBA has selected global business software company SAP to upgrade its banking solutions, based on SAP’s technology platform NetWeaver.
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