Andrew Clark’s Post

Superannuation funds are on the rise as APRA intensifies regulatory oversight. Chairperson John Lonsdale highlights the sector's rapid growth at a recent banking forum. https://lnkd.in/g_vqRAdM #fsonews #SuperannuationFunds #APRA #InvestmentStrategies

Superannuation funds are facing APRA stress testing as the regulator says they are fast growing to overtake banks in the financial system. https://lnkd.in/gds664Hd #apra #banking #stresstesting #superannuation

The Australian finance sector is undergoing a significant shift with the 𝐫𝐢𝐬𝐞 𝐨𝐟 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐜𝐫𝐞𝐝𝐢𝐭 𝐟𝐮𝐧𝐝𝐬, which are emerging as a formidable competitor to traditional banks. These funds offer more flexible and higher-yielding financing options, capturing a growing share of the market. Regulatory bodies like the Australian Prudential Regulation Authority (APRA) are closely monitoring this rapid growth and considering new measures to maintain financial stability. ⚖️ Investor interest in private credit is soaring, driven by its attractive returns in a low-interest-rate environment. This surge is intensifying competition for banks, prompting them to rethink their strategies. In response, banks are enhancing their credit offerings and seeking partnerships with private credit funds to stay ahead. Meanwhile, private credit funds continue to innovate, introducing new financial products and solutions to address gaps left by traditional banks. This shift underscores the necessity for banks to innovate and adapt to sustain their competitive edge in an evolving market. 𝐑𝐞𝐚𝐝 𝐌𝐨𝐫𝐞 > https://lnkd.in/eeRiNHEt https://lnkd.in/g_97UYCb

NBFIs now manage more assets than banks, but lighter regulation increases systemic risk. Non-banking financial institutions (NBFIs), such as investment funds, pension funds and private equity firms, control a staggering 41% of total EU financial assets. 📉 Why it matters - Recent events have shown how risks in NBFIs spill over and impact everyone: 🏦 The UK pension fund crisis (2022): Rising interest rates triggered a mass sell-off of government bonds (gilts), imposing huge losses on the leveraged pension funds and bringing the gilt market to the brink of collapse. 💸 The “dash for cash” during COVID-19: Investment funds rushed to sell assets, worsening market chaos and liquidity shortages. These incidents highlight how risks in the NBFI sector can create domino effects, impacting everyone, from small businesses to individual savers. ⚠️ The lesson - Differences between bank and non-bank regulation must be levelled up where risks are the same. That’s why Finance Watch recently responded to the European Commission’s consultation on NBFIs, calling for: 🔍 Enhanced transparency on the risks of NBFIs and their interconnectedness with banks. 📑Oversight for unregulated entities like family offices and sovereign wealth funds, where they pose risks to the stability of the financial system. 💪 System-wide stress tests to uncover hidden risks. 🌍 Better climate risk rules to stop vulnerabilities from migrating to unregulated areas. Finance Watch’s recommendations aim to reduce risks and ensure a safer, fairer financial system for all. 📖 Read our full response for more insights: https://lnkd.in/ewZinVKu #NoMoreCrises  #FinanceWatch #FinancialStability #Regulation #SustainableFinance #NBFI

SMSFs should consider diversification into private credit, which offers an attractive income stream and capital protection through stringent loan assessment processes, says an investment specialist. https://bit.ly/3BKDsyY

Rhizome Advisory Group's latest risk insights article on the hot topic of private credit. We will explore this asset class in more detail in a series of articles. Please see below our first article which provides an overview of the asset class and outlines the imminent threats on the horizon. Many private credit fund managers are pointing to past records as evidence of superior credit analysis and investment skill, however conditions of the past (since the GFC) have changed and past performance should not be used to predict future success. It will be those managers with strong credit analysis and investment disciplines that will be able to take advantage of the opportunities that will appear on the horizon. Look forward to your comments, insights and opinions. #riskmanagement #superannuation #australia #creditrisk https://lnkd.in/g-gRYMDp

Rhizome Advisory Group’s credit risk specialists will be publishing a series of risk insight articles exploring the risks and opportunities for private credit investing as it relates to the superannuation industry. In this first article we provide an overview of the asset class and the imminent risks. Later articles will explore what Responsible Superannuation Entity Licensee directors and executives should be asking to ensure that they are challenging and testing their approaches to credit assessment and investment. We look forward to your thoughts, opinions and questions as we explore this asset class in our series of articles. #riskmanagement #creditrisk #investments #superannuation #australia https://lnkd.in/gNHJWgNR

Earlier this year the Labour party published their plans for financial services and are currently drafting further proposals. Hidden within the noise is exploration of alternative models for increased financial resilience including longer-term fixed rate mortgages. On the surface this is sensible and would avoid affordability challenges customers have faced re-mortgaging at higher rates over the past 18 months. However, this systemic change will no doubt pose a headache for bank treasuries navigating the complex IRRBB and funding implications. Policy makers need to promote a thriving and competitive sector so it is essential to ensure that mid and small tier banks can accommodate what is likely to be alterations in market preference. ALMIS International will be looking at this over the next year and we plan to offer a series of webinars/roundtables to discuss this with the industry. Please reach out if you would be interested in partaking in the discussion. 🤚 Another key point to note is "pursing a more joined up approach to regulation and supervision.. and building a more collaborative relationship with the EU". #ALM #Treausry #IRRBB #Banking

Financial statements are a critical tool for understanding a company's financial health and making informed business decisions. My project topic during my undergraduate days at the prestigious Delta State University, Abraka in 2005, was "The impact of effective interprepation of financial statements on profitability of commercial banķs in Nigeria using Zenith bank published financial statement as my case study at the time and the conclusion from findings was, the impact of its effective interpretation, cannot be overemphazied, it is important as other crucial factors to her business growth. Interestingly, Heritage bank Plc financial statement for the year ended 31st December 2018, showed that Bank had a persistent problem of negative net assets, implying that the bank had a negative debt to equity ratio, indicating that the banks weak operation had wiped out shareholder's funds. It imdicated that the bank had a debt/equity ratio of -16.8% as against the +54.5% ratio of Stanbic IBTC. An infusion of fresh equity to improve the debt/equity ratio should have been explored in 2018. This would have meant that net assets and liquidity would have improved substantially thereby reducing the bank's operating cost/operating income ratio. Heritage bank's financials for 2018 were so far gone in respect of weak loan assets, equity- eroding losses, high leverage and falling liquidity that it would take a rare optimist to have been convinced of the bank's soundness even with series of complaints and inefficiencies in 2024. Against this backdrop indications emerged that attendant issues like questionable acquisition deals, poor or absence of corporate governance,recession,bad loans,operating inefficiency, competitive subsitutes like Fintech companies,it was obvious that no investor was willing to take the plunge to revive the ailing bank, hence the winding up of Heritage bank became imperative as the last option. It was expected that AMCON would have taken over by adopting the Polaris bank model appointed a receiver/manager while it works at restoring balance sheet stability by warehousing her bad debts and pursuing recovery. This would have been a better deal for staff and depositors as opposed to outright liquidation. From the Heritage bank experience, it is hoped that other Regulatory bodies and banks consider and pay more attenrion to key indicators in their financial statements and follow timely cues to take better practical steps in curbing future issues of this nature, so as to avert possible bank run and other possible threats of the banking industry.

We are today announcing financial guarantees that will see Barclays Corporate Banking and Lloyds Banking Group deliver £1 billion of funding to accelerate the #retrofit of social housing in the UK.   Barclays UK Corporate Bank and Lloyds Banking Group will each deliver £500 million of lending to the market that has been enabled by financial guarantees of up to £750m provided by the #NWF. The guarantees will support both shorter duration loans to be provided by Lloyds Banking Group and mid-to-long duration loans to be provided by Barclays UK Corporate Bank, ensuring that financing will cater to every aspect of the social housing market.   We will help create a stable investment environment by mobilising private capital around the Government’s strategic priorities, enabling the market to invest with confidence in clean energy and growth industries. These deals showcase how innovative public and private expertise can come together to deploy private capital to deliver warmer, greener homes for social tenants.   The development of these guarantees with Barclays UK Corporate Bank and Lloyds Banking Group forms part of ongoing efforts by the NWF to improve financing to the social housing sector, a fundamental pillar of the Government’s Warm Homes Plan. An agreement in principle has also been made between the NWF and The Housing Finance Corp. Ltd., a mutual funder to the sector, for a further £150m to help more registered providers gain access to longer term bond markets, which is expected to be announced in due course.   John Flint, CEO of the #NationalWealthFund, said: “We know there are significant barriers to investment in the heat and buildings sector, despite it being a critical element of the UK’s net zero transition. By working with Lloyds Banking Group and Barclays to bring competitive offers to the market, we are helping registered providers access the attractive financing that they need to implement critical retrofit measures, reducing bills and improving comfort for social housing residents across the UK.”   Read more about the deal: https://lnkd.in/e6G7wkHn