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Speaker 1: Welcome to Fear and Greed business news you can use today.

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Speaker 1: A and Z emerges as the favored bank stock post results,

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Speaker 1: even though it's earnings tumbled fourteen percent. The Reserve Bank

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Speaker 1: plays down the prospect of further rate cuts, and the

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Speaker 1: Competition Watchdog warns retailers to not over promote their Black

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Speaker 1: Friday sales. Plus, sales of hybrid and plug in electric

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Speaker 1: vehicles surge, and the US government shutdown is coming to

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Speaker 1: an end. It is Tuesday, the eleventh of November twenty

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Speaker 1: twenty five. I'm Michael Thompson, and good morning Sean Aylmer.

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Speaker 2: Morning.

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Speaker 1: Michael saw on the main story this morning. A and

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Speaker 1: Z's cash profit tumbled fourteen percent for the last year,

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Speaker 1: dragged down by redundancy costs and legal penalties and new

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Speaker 1: CEO Nunomatos. So the results weren't good enough.

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Speaker 2: The cash profit was five point eight billion dollars and

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Speaker 2: apart from one off cost, profit was actually flat on

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Speaker 2: the prior year. Now we did know that these redunds

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Speaker 2: and see costs and legal penalties. We're coming through. The

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Speaker 2: institutional and New Zealand businesses are doing well. While the

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Speaker 2: Australian retail business the Stonian retail bank, business banking and

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Speaker 2: private banking divisions underperformed, deposits were higher and home loans rose.

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Speaker 2: The bank, like its peers, wants to shift away from

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Speaker 2: broker channels towards ain Z's staff selling home loans. Ain

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Speaker 2: zied share price jump three percent yesterday, and of the

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Speaker 2: three banks to report over the past eight days, the other,

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Speaker 2: of course, others being National Australian Bank in Westpac, ain

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Speaker 2: Z probably has been best received, at least in share

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Speaker 2: price terms.

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Speaker 1: Sure k, you, of course were a banking reporter, so

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Speaker 1: you I was at some point, Michael, Yes, many many

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Speaker 1: moons ago, minutes ago, and so you know this stuff.

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Speaker 1: So well wrap up the full year such confidence. I

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Speaker 1: was trying to still avoid using the term veteran. I

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Speaker 1: know that that does.

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Speaker 2: We've used it now, haven't you have done it? Yeah?

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Speaker 1: I can't take a back. Just wrap up the full

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Speaker 1: year results broadly, and noting, of course Commonwealth Bank reports

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Speaker 1: it's quarterly earnings today. Just get little asterisk on that one.

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Speaker 2: There's growth in costs, in fact, a lot of growth

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Speaker 2: in costs, not a huge amount of revenue growth. That

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Speaker 2: doesn't sound very good. Pressure on profit margins that ain't

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Speaker 2: so good either. In fact, the expense to income ratio

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Speaker 2: across the big banks, so this includes Commonwealth banks half

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Speaker 2: a year to the end of June is fifth expense

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Speaker 2: expense to income over fifty percent, the highest level in

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Speaker 2: fifteen years. Lots of costs in there. Basically staff is

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Speaker 2: a big one. Technology is another really big one. If

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Speaker 2: you think of the last couple of years inflation and

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Speaker 2: so you've really had that coming through. Certainly tech spending

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Speaker 2: is a big one there. What I think is interesting

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Speaker 2: is that the head count is as big, as high

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Speaker 2: as it's ever been. Notwithstanding we've seen these headlines recently

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Speaker 2: about As in particular saying we're going to lose three

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Speaker 2: and a half thousand jobs. They haven't done it yet.

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Speaker 1: Yeah, okay, so that's that all the banks.

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Speaker 2: Want to shift away from mortgage brokers. I think that's

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Speaker 2: really interesting. It'll be quite the ass because three quarters

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Speaker 2: of all home loans are done through mortgage brokers nowadays.

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Speaker 2: If I go through them a and zed basically that

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Speaker 2: result clearing the decks. The new boss taking the medicine

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Speaker 2: of poor governance in recent years Westpac, it's probably all

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Speaker 2: about building the business as it pushes to unite a

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Speaker 2: bunch of legacy technology systems. National Australian Bank is all

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Speaker 2: about protecting its business lending franchise, which one to investors

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Speaker 2: like well A and ZED got the biggest share price bump,

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Speaker 2: though it is also cheaper than the other three banks.

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Speaker 2: So purely on that basis, you have to say A

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Speaker 2: and ZED got the tick of approval.

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Speaker 1: This shift away from mortgage brokers. Is this just because

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Speaker 1: they can do it cheaper in house They don't need

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Speaker 1: to pay mortgage brokers because obviously the mortgage brokers are

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Speaker 1: paid by the lender. Is that just?

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Speaker 2: Is that?

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Speaker 1: Is it as simple as that?

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Speaker 2: To bring it in house you own the customer better

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Speaker 2: as well, okay, and the data around the customer you

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Speaker 2: own better.

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Speaker 1: Right.

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Speaker 2: Having said that, I think it's really to all of

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Speaker 2: them are now saying, well, we are going to bring

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Speaker 2: our sort of use our own channels to sell home

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Speaker 2: loans rather than mortgage brokers. But mortgage brokers is and

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Speaker 2: so much part of the establishment. Yeah, I think it's

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Speaker 2: going to be very hard. Now I'm saying this, but

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Speaker 2: the last time I refinanced was directly with the bank.

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Speaker 2: The time before the two or three times before that,

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Speaker 2: was with the mortgage broker.

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Speaker 1: Really yeah, okay, Now there is something that we must

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Speaker 1: note that feeling the pain at A and Z. The

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Speaker 1: bank's former leadership team, including former CEO Shane Elliott, who

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Speaker 1: will lose. They're going to this is staggering, lose a

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Speaker 1: combined thirty two million dollars in bonuses over corporate governance failures.

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Speaker 1: That's a that's a solid whack.

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Speaker 2: Massive. Eliot's the main one. Also Marley Canegie before head

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Speaker 2: of retail bank, the former technology executive, Gerard Florian, a

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Speaker 2: former head of Strategy and Transformation, Anthony Strong. They'll all

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Speaker 2: lose their twenty twenty four to twenty twenty five bonuses.

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Speaker 2: Elliott himself thirteen and a half million dollars ouch now.

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Speaker 2: In September, ASEK settled the case for two hundred and

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Speaker 2: forty million dollars against ain Z after the bank admitted

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Speaker 2: to incorrectly reporting bond trading data to the federal government,

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Speaker 2: as well as widespread misconduct at its retail division that

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Speaker 2: affected tens of thousands of customers. Yesterday, the board of

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Speaker 2: ain Z said the former execs had ultimate responsibility over

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Speaker 2: the failings and they lost their bonuses just as an

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Speaker 2: assign on that new bossno Mattos said he won't take

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Speaker 2: his short term bonus of just undred million dollars, which

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Speaker 2: won a few friends as well.

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Speaker 1: Along these lines, we are staying on topic today Sean

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Speaker 1: for Fear and Greed, Q and A. You're speaking with

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Speaker 1: Noel Williams from PwC.

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Speaker 2: SO. P WC and Noell specifically do a great job

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Speaker 2: pulling together all the data on banks on costs and

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Speaker 2: cost w income ratios and profit margins, and we talked

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Speaker 2: to her all about all those things.

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Speaker 1: Yeah, it's good chaps coming up after the show. The

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Speaker 1: Reserve Bank Sean could be boxed in when it comes

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Speaker 1: to interest rates, and its Deputy Governor Andrew Houser has

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Speaker 1: called on business to invest to help boost lagging productivity

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Speaker 1: and grow the supply side of the economy.

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Speaker 2: Howser said the Reserve Bank's interest rate cutting cycle began

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Speaker 2: at the strongest starting point of economic of any economic

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Speaker 2: recovery in forty five years, meaning getting inflation under control

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Speaker 2: is harder. Also means central bank has limited capacity to

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Speaker 2: cut rates further. In a beautiful example of Reserve Bank speak,

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Speaker 2: Houses said it wasn't mad to think future rate cuts

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Speaker 2: are coming, but it was more plausible to worry if

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Speaker 2: there was room to cut rates.

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Speaker 1: I'm sorry, what yeah?

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Speaker 2: Moving on, The reason increase in inflation, according to the

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Speaker 2: Deputy Governor, was two thirds from temporary price spikes across

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Speaker 2: items like travel and fuel, and one third from demand pressures.

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Speaker 1: You worked at the Reserve Bank. Did as part of

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Speaker 1: your onboarding process? Did they teach you to speak indirectly?

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Speaker 2: Both yes and no.

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Speaker 1: Yes. I can't possibly give you a definitive answer to

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Speaker 1: that one. We'll have to wait for more data. Local

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Speaker 1: share market, How did it go? Yesterday?

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Speaker 2: S and PISX two hundred closed up nearly one percent,

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Speaker 2: zero eight percent and thirty six points. Strong day for

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Speaker 2: the miners, with iron ore, uranium, and critical minerals companies

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Speaker 2: doing pretty well. So too did the tech stocks and

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Speaker 2: energy companies. Consumer staples and properly stocks fell back. Among

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Speaker 2: the large caps, the big banks were mixed, as were

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Speaker 2: the three big miners. A few companies that haven't had

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Speaker 2: a great week or two did pretty well yesterday, Telstra, Transurban, Aristocrat, Leisure.

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Speaker 2: The market benefited from the apparent end of the federal

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Speaker 2: government shut down in the US, which we'll talk about

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Speaker 2: in a moment.

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Speaker 1: Indeed, we will. We'll be back in a moment with

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Speaker 1: the rest of the day's business news, Shawn. Sales of

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Speaker 1: hybrids and plug in hybrid vehicles surged last month as

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Speaker 1: the shift to electrification picks up speed or it accelerates.

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Speaker 2: Accelerate, I was going to say accelerates pick out speed.

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Speaker 1: Just missed opportunity.

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Speaker 2: Yeah, sorry, last month. Last month, the we're just under

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Speaker 2: one hundred thousand vehicles sold across the country, taking the

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Speaker 2: full year figure to date to one million. Hybrids and

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Speaker 2: plug in hybrids accounted for nearly one quarter of all

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Speaker 2: sales in October. As petrol only vehicles continued to lose

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Speaker 2: market share, SUVs again dominated the market sixty two percent

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Speaker 2: of TATO sales. Chinese built vehicles strengthened their position as

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Speaker 2: the third largest source market, with sales from China rising

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Speaker 2: forty percent year on year. In fact, four Chinese brands

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Speaker 2: again featured in the top ten brands for the month.

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Speaker 2: One vehicle, the Cherry Tigo four Pro, and I apologize

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Speaker 2: if I've spilled if I pronounced it incorrectly. Cheery Cherry

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Speaker 2: Tigo four Pro had a four hundred and fifty percent

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Speaker 2: sales growth compared to a year ago. Now, I went

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Speaker 2: and looked up a few reviews of it, and everyone

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Speaker 2: said it's fantastic value for money. That's what the experts

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Speaker 2: are saying. It's got cons as well as pros, but

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Speaker 2: like just value for money. The experts like it. Okay,

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Speaker 2: four hundred and fifty percent rise. I think it was

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Speaker 2: like number seven or eight or something. Top seller Toyota Highlights,

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Speaker 2: followed by the Ford Ranger and Toyota rap Fall.

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Speaker 1: Now the Agable Sea has worn that retailers found to

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Speaker 1: be using deceptive tactics or misleading shoppers about Black Friday

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Speaker 1: discounts could be issued with penalties.

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Speaker 2: So there is a list. How I like this story

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Speaker 2: because these things irritate me as I get older and grouchier.

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Speaker 1: But there's a long list, isn't it When it says.

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Speaker 2: Three days only Friday, Saturday, Sunday, you get there on

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Speaker 2: a Monday morning.

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Speaker 1: Still there, that's a fourth day and you have hustled

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Speaker 1: to get in there.

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Speaker 2: I have atred will see doesn't like that one claims

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Speaker 2: of store wide sales when in fact the sales involve exclusions.

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Speaker 1: Oh yeah, that bugs me.

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Speaker 2: The big scigns everything on sale. You're going these aren't

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Speaker 2: on sale.

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Speaker 1: Yeah, and obviously you're unable to see that fine print

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Speaker 1: because it's so small.

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Speaker 2: Yeah. Well, fine print is another one. I'll disclaimers that

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Speaker 2: seek to limit headline claims about the sale. So you know,

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Speaker 2: you say fifth percent off and then tiny writing it

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Speaker 2: says members only deal or doesn't include red sweaters, something

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Speaker 2: like that.

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Speaker 1: Something very very specific. Yeah, super niche.

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Speaker 2: Yeah. And the other one is, you know, up to ten,

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Speaker 2: twenty thirty percent off where the up to text is

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Speaker 2: not prominently displayed. So I've been caught out a lot.

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Speaker 2: Oh yeah, and the vast fifty percent off you go

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Speaker 2: in up.

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Speaker 1: To the vast majority of stuff's like ten percent off.

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Speaker 2: Then do you have go through? I mean I literally

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Speaker 2: do this, go through and try and find the one

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Speaker 2: that's fifty percent off?

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Speaker 1: No, I don't think I do. You may have inspired

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Speaker 1: me and others as do that you should. There are

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Speaker 1: a few bits and bits and pieces around yesterday. Let's

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Speaker 1: run through a quick rap of something that's right. Yes,

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Speaker 1: AGL Energy has agreed to divert nineteen point nine percent

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Speaker 1: of its twenty percent equity stake in Tilt Renewables.

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Speaker 2: So it's getting out of there except for point one percent.

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Speaker 2: A bit, A little bit I researched after launching a

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Speaker 2: business efficiency program aimed at permanently lifting.

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Speaker 1: Margins explosives Group Dino. I'm assuming this is no bell, right,

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Speaker 1: no bell there you go jumped after announcing a smaller

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Speaker 1: than expected net loss for the last year that having

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Speaker 1: a blast.

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Speaker 2: Mona Delpha's groups saw it close to ten percent as

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Speaker 2: the engineering contractor reported a stronger than expected trading update.

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Speaker 1: From one more from me. AUB Group Group GROP, Yes,

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Speaker 1: that is a that is a bad mistake to make.

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Speaker 1: AUB Group rose one point six percent as it granted

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Speaker 1: private equity Giant EQT a two week extension to its

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Speaker 1: exclusivity period and cleared it to former consortium a CBC

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Speaker 1: Asia Pacific as the power pursue a forty five dollars

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Speaker 1: a shared takeover of the assurance broken.

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Speaker 2: Well done, you know so much about this stuff. You're

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Speaker 2: doing so well. The other one main farmer tumbleland news

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Speaker 2: at former suitor US Healthcare Group Cosette, is appealing in

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Speaker 2: the New South Wales Supreme Court decision that it cannot

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Speaker 2: terminate it's six hundred and seventy two million dollar takeover

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Speaker 2: of the group. So in this one Becausette offered the

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Speaker 2: money and then they wanted to withdraw. It had gone

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Speaker 2: too far down the track. It went to the new

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Speaker 2: South Wee while Supreme Court they said, you got to

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Speaker 2: keep going. So now it's appealing. That just doesn't look

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Speaker 2: very good for main farmer.

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Speaker 1: Oh, you brought us home strong La Sean interesting but

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Speaker 1: disastrous at the same time. Just then turning to international news.

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Speaker 1: Now and the US federal shutdown almost over after renegade,

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Speaker 1: Democrats broke ranks with their party and voted to support

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Speaker 1: a deal to end the record breaking shutdown forty days.

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Speaker 2: Well it's actually forty days in counting because it's not

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Speaker 2: quite avy yet, but certainly the longest on record. The

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Speaker 2: Senate voted sixty to forty on a procedural measure to

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Speaker 2: advance the bill, and then adjourned until Monday US time.

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Speaker 2: It's tonight. There is not a scheduled vote on the

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Speaker 2: final passage, but it will pass at this point. The

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Speaker 2: House also needs to approve of the measure before it

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Speaker 2: goes to Donald Trump's for his signature. Under the agreement,

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Speaker 2: Congress would pass full year funding for the departments of Agriculture,

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Speaker 2: veteran affairs in Congress itself, funding other agencies through to

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Speaker 2: January thirty. The bill provides pay for furloughed government workers.

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Speaker 2: All those people who haven't been paid. They actually get

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Speaker 2: back pay, which I was wondering about, and get back

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Speaker 2: to work. There's also recall agency employees those who have

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Speaker 2: been laid off. They'll actually be recalled back as well.

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Speaker 1: And I think it was interesting that some of those

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Speaker 1: Democrats who did go against their party to do it

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Speaker 1: basically said that the food stamp situation is what drove

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Speaker 1: them to do it. That they said it is a

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Speaker 1: very real crisis for a lot of people. Yeah, makes sense. Now.

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Speaker 1: The US September quarter earning season has shown Wall Street

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Speaker 1: companies are growing at their fastest pace in four years,

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Speaker 1: defying predictions that the Trump administration will trigger a slow

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Speaker 1: down in corporate America.

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Speaker 2: Median earnings year on year across the Russell three thousand index,

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Speaker 2: basically a benchmark from the entire US stock market, hit

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Speaker 2: eleven percent in the third quarter, up from six percent

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Speaker 2: in the gym quarter. According to Morgan Stanley, that's the

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Speaker 2: fastest growth rate since the third quarter of twenty twenty one.

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Speaker 2: The US is on a tear. Six of the eleven

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Speaker 2: sectors that make up the blue chip S and P

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Speaker 2: five hundred of reported positive average earnings growth in the

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Speaker 2: three months two September, up from just two previously. Those

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Speaker 2: two were financials in tech stocks. They did again during

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Speaker 2: the September quarter. Overall, the top five hundred companies have

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Speaker 2: reported above expectations. Basically, people have a job. The tariff

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Speaker 2: impact thus far has been minimal. However, Ennalys said, if

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Speaker 2: you look at the earning season, some warnings, particularly from

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Speaker 2: consumer facing businesses so craft Times for example McDonald's, they

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Speaker 2: all warned about the consumer slowing down.

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Speaker 1: All right. Coming up next is Fearing Q and A today.

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Speaker 1: As we mentioned before, you were speaking with Noel Williams

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Speaker 1: from PwC all about banks. It is coming up in

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Speaker 1: the Fear and Greed playlist on your podcast platform or

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Speaker 1: at Fearandgreed dot com dot au, which has when you

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Speaker 1: sign up for the free daily newsletter. Thank you Sean,

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Speaker 1: Thank you Michael. It's Tuesday, the eleventh of November twenty

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Speaker 1: twenty five. Make sure you're following the podcast and please

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Speaker 1: join us online on LinkedIn, Instagram, ex TikTok and Facebook,

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Speaker 1: I'm Michael Thompson. That was fear and greed. Have a

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Speaker 1: great day.