Briefs: Pacific infrabank, AMP sub debt and more

Banking Day staff Briefs
  • Australia is ramping up its commitment to the Pacific, with Prime Minister Scott Morrison promising to set up a A$2 billion infrastructure bank to issue grants and long-term loans for "high priority" projects including telecommunications, energy, transport and water. To complement the new fund, the Government plans to give Australia's export financing agency access to an extra $1 billion to invest in projects which have a “broad national benefit for Australia", the ABC has reported. The move has been seen as one response to growing concerns among Federal politicians over China's rising influence in the region.
  • AMP Ltd is to issue A$250 million 10-year subordinated notes, which will qualify as Tier 2 capital. S&P Global Ratings said it has assigned its BBB+ long-term issue credit rating to the proposed notes. This is two notches below the issuer's credit rating of A, which reflects the notes' subordination to higher ranking securities and the inclusion of a nonviability contingent capital clause. If triggered, AMP would be required to convert the notes to common equity or write them off. S&P assessed the likelihood of this occurring as "unlikely", and said the notes have "minimal, or no, equity content".
  • Local Appliance Rentals has paid A$257,500 after ASIC identified concerns over its responsible lending obligations and its supervision of franchisees during the period between April 2011 and August 2018. LAR provides consumer leases nationally through a franchise model, including in remote areas of Australia with a high Indigenous population and limited options for purchasing household goods. LAR mainly leases household goods to low-income consumers, including those who receive payments from Centrelink. LAR has agreed to provide remediation to affected consumers, including those who made excess payments or were charged excessive late fees.
  • A debit card glitch saw Kiwibank Visa debit card users in New Zealand charged multiple times. About 20 per cent were affected by yesterday’s glitch, which resulted in their transactions initially showing as being declined before they were charged at least twice. Kiwibank said its call centre was “under a little bit of pressure” but customers would get their money back “as soon as possible”.
  • New Zealand Peer to peer lender Harmoney says it has facilitated $1 billion in loans. The company, which extended into Australia early last year, said three-quarters of that lending was in New Zealand. It said the most common reason borrowers were seeking a loan was for debt consolidation (35 per cent) followed by home improvements (13 per cent). Although a P2P lender, 75 per cent of Harmoney’s funding actually comes from banks and institutional lenders, particularly local Kiwi banks Heartland and TSB.