Revelations at the Banking Royal Commission are prompting calls for tighter regulations...

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are prompting calls for tighter regulations in the funeral insurance sector.

1 THU 05 JULY 2018 Mediaportal Report Revelations at the Banking Royal Commission are prompting calls for tighter regulations... 2GB, Sydney, 06:30 News, Newsreader 6:32 AM Duration: 0 min 37 secs ASR AUD 2,314 NSW Australia Industry Super Australia - Radio & TV ID: X Revelations at the Banking Royal Commission are prompting calls for tighter regulations in the funeral insurance sector. One woman told the hearing she didn't know what she was signing up for including how her policy covered her children and grandchildren and herself. Merinda Dutton, Legal Aid NSW, says they want companies to be more open about costs. 200,000 All, 105,000 MALE 16+, 90,000 FEMALE 16+ Interviewees Merinda Dutton, Legal Aid NSW Also broadcast from the following 12 stations 2BS (Bathurst), 2EC (Bega), 2GN (Goulburn), 2LT (Lithgow), 2MAX (Narrabri), 2QN (Deniliquin), 2XL (Cooma), 2YOU FM (Tamworth), Coast FM (Gosford), Great Lakes FM (Taree), Macquarie Sports Radio (Sydney), Magic 2CH (Sydney) Tighter regulations on funeral service is being pushed after a woman told the Banking... 2CC, Canberra, 06:30 News, Newsreader 6:31 AM Duration: 0 min 31 secs ASR AUD 110 ACT Australia Industry Super Australia - Radio & TV ID: X Tighter regulations on funeral service is being pushed after a woman told the Banking royal commission she didn t know she was ensuring her children and grandchildren when she signed up. Legal Aid s Merinda Dutton says people often don t understand what they re agreeing to. 8,000 All, 4,000 MALE 16+, 3,000 FEMALE 16+ Interviewees Merinda Dutton, Legal Aid Also broadcast from the following 1 station 2CA (Canberra) COPYRIGHT This report and its contents are for the internal research use of Mediaportal subscribers only and must not be provided to any third party by any means for any purpose without the express permission of Isentia and/or the relevant copyright owner. For more information contact copyright@isentia.com DISCLAIMER Isentia makes no representations and, to the extent permitted by law, excludes all warranties in relation to the information contained in the report and is not liable for any losses, costs or expenses, resulting from any use or misuse of the report.

2 There's a push for tighter regulations on funeral insurance following revelations from the... 2GB, Sydney, 05:30 News, Newsreader 5:31 AM Duration: 0 min 33 secs ASR AUD 1,525 NSW Australia Industry Super Australia - Radio & TV ID: X There's a push for tighter regulations on funeral insurance following revelations from the banking royal commission. One woman told the commission she didn't know that by signing up she was also insuring her children and grandchildren. NSW Legal Aide Merinda Dutton says people don't often understand what they're agreeing to. 116,000 All, 63,000 MALE 16+, 53,000 FEMALE 16+ Interviewees Merinda Dutton, NSW Legal Aide Also broadcast from the following 13 stations 2BS (Bathurst), 2CC (Canberra), 2EC (Bega), 2GN (Goulburn), 2LT (Lithgow), 2MAX (Narrabri), 2QN (Deniliquin), 2XL (Cooma), 2YOU FM (Tamworth), Coast FM (Gosford), Great Lakes FM (Taree), Macquarie Sports Radio (Sydney), Magic 2CH (Sydney) FUND WARNS ON SHARE RISK Herald Sun, Melbourne, Business News, Jeff Whalley Page words ASR AUD 6,830 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 307 word(s), ~1 min 303,140 CIRCULATION NAB chief: Bonuses led to 'excessive' risk Herald Sun, Melbourne, Business News, Jeff Whalley Page words ASR AUD 11,549 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 392 word(s), ~1 min 303,140 CIRCULATION Forecast mostly bright but beware clouds on the horizon Herald Sun, Melbourne, Business News, George Boubouras Page words ASR AUD 14,326 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 541 word(s), ~2 mins 303,140 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

3 NAB BONUSES WERE RISKY BUSINESS Daily Telegraph, Sydney, Business News, Jeff Whalley Page words ASR AUD 19,799 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 280 word(s), ~1 min 232,067 CIRCULATION NAB boss vows to end 'risky' bonus behaviour Courier Mail, Brisbane, Business News Page words ASR AUD 1,510 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 190 word(s), <1 min 135,007 CIRCULATION Fund plan to reduce market exposure Courier Mail, Brisbane, Business News, Jeff Whalley Page words ASR AUD 3,161 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 333 word(s), ~1 min 135,007 CIRCULATION Inquiry fallout to hit AMP profits The Australian, Australia, Business News, Cliona O'Dowd Page words ASR AUD 3,880 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 487 word(s), ~1 min 94,448 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

4 Royal commission adds to funding costs: NAB The Australian, Australia, Business News, Richard Gluyas Page words ASR AUD 10,306 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 575 word(s), ~2 mins 94,448 CIRCULATION Aqualand flags ambition with heavyweight board The Australian, Australia, Business News, Turi Condon Page words ASR AUD 3,213 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 369 word(s), ~1 min 94,448 CIRCULATION End of a good run: AusSuper cuts equities as market faces headwind The Australian, Australia, Business News, John Durie Page words ASR AUD 13,722 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 760 word(s), ~3 mins 94,448 CIRCULATION Banks jockey for AMP sales work The Australian, Australia, Business News, Bridget Carter Scott Murdoch Page words ASR AUD 7,316 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 510 word(s), ~2 mins 94,448 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

5 Word on the street The Australian, Australia, Business News, Richard Gluyas Page words ASR AUD 3,920 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 502 word(s), ~2 mins 94,448 CIRCULATION AusSuper gets ready to batten down hatches The Australian, Australia, Business News, Richard Gluyas Page words ASR AUD 11,802 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 526 word(s), ~2 mins 94,448 CIRCULATION Fund keeps faith in banks, downplays housing, credit crunch risks The Australian, Australia, Business News, Richard Gluyas Page words ASR AUD 4,143 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 384 word(s), ~1 min 94,448 CIRCULATION Slow period for super likely Adelaide Advertiser, Adelaide, Business News Page words ASR AUD 684 Photo: No Type: News Item Size: cm² SA Australia Industry Super Australia - Press ID: View original - Full text: 105 word(s), <1 min 112,097 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

6 Incentives encouraged risks, NAB boss admits Adelaide Advertiser, Adelaide, Business News, Jeff Whalley Page words ASR AUD 7,229 Photo: Yes Type: News Item Size: cm² SA Australia Industry Super Australia - Press ID: View original - Full text: 398 word(s), ~1 min 112,097 CIRCULATION Tape shows dodgy funeral insurance sales Courier Mail, Brisbane, General News Page words ASR AUD 1,001 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 127 word(s), <1 min 135,007 CIRCULATION REITs in position to perform The Australian, Australia, Business News, Frank Gelber Page words ASR AUD 16,793 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1158 word(s), ~4 mins 94,448 CIRCULATION Viva on track for biggest equity capital markets deal in last four years The Australian, Australia, Business News, Bridget Carter Scott Murdoch Page words ASR AUD 15,823 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 435 word(s), ~1 min 94,448 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

7 Silk not so smooth The Australian, Australia, Business News, Christine Lacy Page words ASR AUD 4,385 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 243 word(s), <1 min 94,448 CIRCULATION No more low-doc lending, CBA says The Australian, Australia, General News, Anthony Klan Page words ASR AUD 4,769 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 506 word(s), ~2 mins 94,448 CIRCULATION Insurer's leader had no training Northern Territory News, Darwin, General News, Greg Roberts Page words ASR AUD 1,067 Photo: No Type: News Item Size: cm² NT Australia Industry Super Australia - Press ID: View original - Full text: 278 word(s), ~1 min 11,279 CIRCULATION Super giant shuns more stock pickers Sydney Morning Herald, Sydney, Business News, John Collett Page words ASR AUD 30,254 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 598 word(s), ~2 mins 88,634 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

8 NAB boss says incentives 'overrated' Sydney Morning Herald, Sydney, Business News, Mathew Dunckley Page words ASR AUD 8,644 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 224 word(s), <1 min 88,634 CIRCULATION Conformity not high on AMP chairman Murray's priority list Sydney Morning Herald, Sydney, Business News, Stephen Bartholomeusz Page words ASR AUD 28,013 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 713 word(s), ~2 mins 88,634 CIRCULATION Super giant shuns more stock pickers Age, Melbourne, Business News, John Collett Page words ASR AUD 24,504 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 638 word(s), ~2 mins 83,229 CIRCULATION Conformity not high on AMP chairman Murray's priority list Age, Melbourne, Business News, Stephen Bartholomeusz Page words ASR AUD 19,580 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 713 word(s), ~2 mins 83,229 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

9 NAB boss says incentives 'overrated' Age, Melbourne, Business News, Mathew Dunckley Page words ASR AUD 6,042 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 224 word(s), <1 min 83,229 CIRCULATION Super giant shuns more stock pickers Canberra Times, Canberra, Business News, John Collett Page words ASR AUD 9,656 Photo: Yes Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 598 word(s), ~2 mins 17,579 CIRCULATION NAB boss says incentives 'overrated' Canberra Times, Canberra, Business News, Mathew Dunckley Page words ASR AUD 2,766 Photo: No Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 224 word(s), <1 min 17,579 CIRCULATION Glass Steagall crucial Canberra Times, Canberra, Letters Page words ASR AUD 2,946 Photo: No Type: Letter Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 287 word(s), ~1 min 17,579 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

10 Conformity not high on AMP chairman Murray's priority list Canberra Times, Canberra, Business News, Stephen Bartholomeusz Page words ASR AUD 8,965 Photo: No Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 713 word(s), ~2 mins 17,579 CIRCULATION NAB boss says bonuses overrated Hobart Mercury, Hobart, Business News, Jeff Whalley Page words ASR AUD 918 Photo: Yes Type: News Item Size: cm² TAS Australia Industry Super Australia - Press ID: View original - Full text: 203 word(s), <1 min 28,265 CIRCULATION Fund cuts on shares Hobart Mercury, Hobart, Business News, Jeff Whalley Page words ASR AUD 723 Photo: No Type: News Item Size: cm² TAS Australia Industry Super Australia - Press ID: View original - Full text: 246 word(s), <1 min 28,265 CIRCULATION Bonus plan was wrong: NAB West Australian, Perth, Business News, Jeff Whalley Page words ASR AUD 3,945 Photo: No Type: News Item Size: cm² WA Australia Industry Super Australia - Press ID: View original - Full text: 344 word(s), ~1 min 147,676 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

11 Funeral insurer had no expertise Geelong Advertiser, Geelong VIC, General News Page words ASR AUD 333 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 219 word(s), <1 min 16,687 CIRCULATION Hypocrisy on executive pay Australian Financial Review, Australia, Letters Page words ASR AUD 2,488 Photo: No Type: Letter Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 289 word(s), ~1 min 44,635 CIRCULATION Diversity discounted Australian Financial Review, Australia, Letters Page words ASR AUD 1,456 Photo: Yes Type: Letter Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 114 word(s), <1 min 44,635 CIRCULATION IFM mulled $4b Healthscope tilt Australian Financial Review, Australia, General News Page words ASR AUD 9,082 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 798 word(s), ~3 mins 44,635 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

12 AusSuper to slash equity risks Australian Financial Review, Australia, General News Page words ASR AUD 5,866 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 754 word(s), ~3 mins 44,635 CIRCULATION Warnings over advice on 'one-stop property shops' Newcastle Herald, Newcastle NSW, General News, John Collett Page words ASR AUD 2,556 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 457 word(s), ~1 min 23,625 CIRCULATION Insurer hired 'no experience' CEO Warrnambool Standard, Warrnambool VIC, General News Page words ASR AUD 451 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 302 word(s), ~1 min 8,274 CIRCULATION Bendigo Bank papers inflame exec tensions Australian Financial Review, Australia, Companies and Markets, james frost Page words ASR AUD 7,120 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 755 word(s), ~3 mins 44,635 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

13 'Pure play' coal just doesn't make the cut for UniSuper Australian Financial Review, Australia, Companies and Markets, Ben Potter Page words ASR AUD 6,533 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 721 word(s), ~2 mins 44,635 CIRCULATION Macfarlane hits out at 'unrealistic' investment ethos Australian Financial Review, Australia, Companies and Markets, Brad Thompson Page words ASR AUD 7,019 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 564 word(s), ~2 mins 44,635 CIRCULATION Bonuses fuelled risks in NAB staff Townsville Bulletin, Townsville QLD, General News Page words ASR AUD 340 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 124 word(s), <1 min 16,484 CIRCULATION AustralianSuper exits Yarra mandate for in-house strategy Australian Financial Review, Australia, Companies and Markets Page words ASR AUD 2,326 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 281 word(s), ~1 min 44,635 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

14 Bonuses 'overrated' and need overhaul Australian Financial Review, Australia, General News, Patrick Durkin Page words ASR AUD 5,360 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 646 word(s), ~2 mins 44,635 CIRCULATION Tear of loss' used to sell life insurance Australian Financial Review, Australia, General News, Misa Han Page words ASR AUD 7,261 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 665 word(s), ~2 mins 44,635 CIRCULATION Insurer hired 'no experience' CEO Illawarra Mercury, Wollongong NSW, General News Page words ASR AUD 1,016 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 302 word(s), ~1 min 10,806 CIRCULATION IOOF, ANZ stick with commissions Australian Financial Review, Australia, Companies and Markets, Alice Uribe Page words ASR AUD 7,706 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 687 word(s), ~2 mins 44,635 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

15 AUSTRAC late to party, says expert Australian Financial Review, Australia, Companies and Markets, Joyce Moullakis Page words ASR AUD 10,174 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 867 word(s), ~3 mins 44,635 CIRCULATION Chip Eng Seng in Adelaide Australian Financial Review, Australia, Property, Nick Lenaghan Page words ASR AUD 3,074 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 316 word(s), ~1 min 44,635 CIRCULATION Fund seeks reduced exposure Gold Coast Bulletin, Gold Coast QLD, General News Page words ASR AUD 370 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 132 word(s), <1 min 21,468 CIRCULATION Incentives encouraged risks, NAB chief admits Gold Coast Bulletin, Gold Coast QLD, General News, Jeff Whalley Page words ASR AUD 1,046 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 320 word(s), ~1 min 21,468 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

16 Can central Melbourne absorb a $7.4b development boom? Australian Financial Review, Australia, Property, Nick Lenaghan Page words ASR AUD 17,496 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1472 word(s), ~5 mins 44,635 CIRCULATION Bank bonuses cop flak Cairns Post, Cairns, General News, Jeff Whalley Page words ASR AUD 1,143 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 329 word(s), ~1 min 13,896 CIRCULATION Banks failing remote clients Cairns Post, Cairns, General News, Daniel Bateman Page words ASR AUD 1,068 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 350 word(s), ~1 min 13,896 CIRCULATION COPYRIGHT This report and its contents are for the internal research use of Mediaportal subscribers only and must not be provided to any third party by any means for any purpose without the express permission of Isentia and/or the relevant copyright owner. For more information contact copyright@isentia.com DISCLAIMER Isentia makes no representations and, to the extent permitted by law, excludes all warranties in relation to the information contained in the report and is not liable for any losses, costs or expenses, resulting from any use or misuse of the report.

Herald Sun, Melbourne Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 27 Printed Size: 123.

17 Herald Sun, Melbourne Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 27 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 6,830 Words: 307 Item ID: Page 1 of 1 FUND WARNS ON SHARE RISK SUPER AUSTRALIA S biggest superannuation fund, AustralianSuper, will reduce its exposure to the share market amid expectations rate hikes overseas will bring an end to the equities boom. Chief investment officer Mark Delaney says that after taking advantage of a period of sustained growth in global equities, the $140 billion fund is now preparing for the end of that cycle. Mr Delaney was speaking yesterday as AustralianSuper revealed its balanced option fund where 90 per cent of members have their retirement savings chalked up a return of per cent for the financial year to June. That was down slightly from per cent the previous year but above the 8.3 per cent rise in the ASX 200 index. The balanced option has averaged a per cent annual return over the past five years and 9.3 per cent over the past three years. Discussing the outlook, Mr Delaney said: We know that at some point in the future markets will be more subdued. AustralianSuper had about 62 per cent of its cash in listed equities, he said, but expected to reduce that to the mid 50s within a year. That is our plan at this stage things can change, he said. Of that cash it has invested in shares, about 37 per cent is in offshore equities and 25 per cent is in companies listed in Australia. Mr Delaney said he would be keeping an eye on key policy makers particularly the US Federal Reserve in relation to interest rates over the year ahead while also monitoring any action around tariffs or other measures that might affect global trade. We think we are getting closer to the end of the cycle, he said. It is typically generated by a Fed tightening and it looks like we are on a path to that. JEFF WHALLEY

Thorburn has conceded bonuses that were on offer to staff led to excessive risk taking and the wrong behaviour.

18 Herald Sun, Melbourne Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 27 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 11,549 Words: 392 Item ID: Page 1 of 1 NAB chief: Bonuses led to excessive risk JEFF WHALLEY BANKING NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk taking and the wrong behaviour. But Mr Thorburn says he believes the role of big bonuses in motivating staff has widely been overstated. Speaking at a business lunch in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference, he said. So money is part of it but it is much deeper. His comments come as the financial services royal commission continues to expose cases of banks and other finance companies selling products and services inappropriately. In a market system we need incentives, (but) they can be seriously overrated in terms of their motivational capability Andrew Thorburn for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff due to bonus schemes. I think some of the incentive systems we ve had have encouraged the wrong behaviour they have encouraged excess and excessive risk taking and we have not had good enough controls to prevent that, he said. We have to fix that. Many of the misconduct cases dissected at the royal commission involved staff cross-selling products and services touting them to people who were coming into branches or calling service centres for other reasons. Australian lenders have routinely been cross-selling services such as financial advice to customers under a model known as vertical integration. That model is now coming under pressure following the misconduct scandals that have engulfed the industry in recent years, culminating in the royal commission. NAB late last month changed the criteria for bonuses available to more than 4000 branch and call-centre staff, reducing the emphasis on financial targets. Yesterday, Mr Thorburn sought to defend his 30,000- strong workforce, saying it was a minority of people who did the wrong thing. Even when we had the wrong incentives, most people did not abuse them, he said. A stick was also needed alongside the carrot of remuneration, he said. When people do the wrong thing (the stick) should be bought down hard. Because our reputation relies on trust, people who break that by breaking the law or things like that that (deserves the) stick.

Herald Sun, Melbourne Author: George Boubouras Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 28 Printed Size: 258.

past financial year were solid, with an 8.6 per cent return for the ASX 200. When you include dividends, the total return was in the low double digits impressive.

19 Herald Sun, Melbourne Author: George Boubouras Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 28 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 14,326 Words: 541 Item ID: Page 1 of 1 y g THE SHORT CUT with GEORGE BOUBOURAS DESPITE higher volatility, returns in the equity market for the past financial year were solid, with an 8.6 per cent return for the ASX 200. When you include dividends, the total return was in the low double digits impressive. Investors head into the new financial year with strong returns and a good earnings momentum. The continued improvement in earnings over the past year was driven predominantly from the resources and commodity sectors, benefiting from solid global growth. Not all sectors contributed. Clearly the telco (Telstra) and bank sectors were not good performers and unfortunately they will continue to face some challenges in the year ahead. The only positive will be their payout ratios as they will continue to deliver dividends for the yield-hungry selfmanaged superannuation fund investors. The forecast for the ASX 200 is to hit 6550 points over the year ahead. As with all forecasts, context is important as there are many moving parts. The target implies a 5.75 per cent capital return before dividends, which would be a little lower compared with the long-run expected return of equities as an asset class. Company earnings will need to continue to grow over the next year, requiring continuing strong contributions from the resources, commodities, energy, diversified financials and healthcare sectors. The interest rate environment is a very important factor. While profits are improving in specific sectors, there is a clear slowdown in housing-related activity. Further, there is a clear tightening in credit conditions as loan-to-value ratios will continue to fall and borrowing rates for investors and homeowners will continue to rise. Therefore, the official cash rate will need to remain at the historic low of 1.5 per cent well into the second half of next year. The Australian dollar will also need to remain under the US75c level and preferably lower over the next year. It is an over simplification, however: a lower Aussie tends to lead to an improved performance for local companies that receive earnings in US dollars. Business confidence and conditions will also need to remain solid. Various business surveys show conditions have improved, reflecting (naturally) improved confidence levels, which are a good leading indicator. Global growth momentum, strong domestic immigration and the lower Australian dollar have all helped corporate Australia. Further, Canberra has been able to deliver some reform since the Federal Budget was unveiled in May. This is a positive development despite the ongoing noise that is a function of the adversarial nature of politics. Steady global growth, cash rates remaining at historic lows, a low Australian dollar, improving business conditions and continuing support from Canberra are all required to help drive earnings momentum and the Australian Securities Exchange higher this financial year. If all these various conditions are delivered, the ASX 200 target of 6550 will be comfortably met. On the risk side, there are many to consider in the year ahead. Equity markets reflect future earnings and therefore are volatile by nature. The fallout from trade tensions, the China corporate debt surge and higher US interest rates are just some of the risks being priced in to some degree. This will ensure volatility will be a constant reminder as you search for growth. GEORGE BOUBOURAS IS DIRECTOR OF SALTER BROTHERS ASSET MANAGEMENT

Daily Telegraph, Sydney Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 232,067 Page: 24 Printed Size: 419.

conceded bonuses on offer to staff led to excessive risk taking and the wrong behaviour.

Speaking at a business event in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression.

20 Daily Telegraph, Sydney Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 232,067 Page: 24 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 19,799 Words: 280 Item ID: Page 1 of 1 NAB BONUSES WERE RISKY BUSINESS JEFF WHALLEY BANKING NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses on offer to staff led to excessive risk taking and the wrong behaviour. But Mr Thorburn (pictured) says he believes the role of big bonuses in motivating staff has been widely overstated. Speaking at a business event in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference, he said. So money is part of it but it is much deeper. His comments come as the financial services royal commission continues to expose cases of banks and other finance companies selling products and services inappropriately. In a market system we need incentives, (but) they can be seriously overrated in terms of their motivational capability for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff due to bonus schemes. I think some of the incentive systems we ve had have encouraged the wrong behaviour they have encouraged excess and excessive risk-taking and we have not had good enough controls to prevent that, Mr Thorburn said. We have to fix that. Many of the misconduct cases dissected at the royal commission involved staff cross-selling products and services to people coming into branches or calling service centres for other reasons. Australian lenders have been routinely cross-selling services such as financial advice to customers under a model known as vertical integration. NAB last month changed the criteria for bonuses available to branch and call-centre staff, reducing the emphasis on financial targets.

21 Courier Mail, Brisbane Section: Business News Article type : News Item Classification : Capital City Daily : 135,007 Page: 42 Printed Size: 86.00cm² Market: QLD Country: Australia ASR: AUD 1,510 Words: 190 Item ID: Page 1 of 1 NAB boss vows to end risky bonus behaviour NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk-taking and the wrong behaviour. But Mr Thorburn says he believes the role of big bonuses in motivating staff has widely been overstated. Mr Thorburn told a business event in Melbourne yesterday that workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference, he said. So money is part of it but it is much deeper. His comments come as the financial services royal commission continues to expose cases of banks and finance companies selling products and services inappropriately. In a market system we need incentives, (but) they can be seriously overrated in terms of their motivational capability for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff due to bonus schemes. I think some of the incentive systems we ve had have encouraged the wrong behaviour they have encouraged excess and excessive risk-taking, he said. We have to fix that.

Courier Mail, Brisbane Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 135,007 Page: 43 Printed Size: 180.

22 Courier Mail, Brisbane Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 135,007 Page: 43 Printed Size: cm² Market: QLD Country: Australia ASR: AUD 3,161 Words: 333 Item ID: Page 1 of 1 Fund plan to reduce market exposure JEFF WHALLEY AUSTRALIA S biggest superannuation fund, AustralianSuper, will reduce its exposure to the sharemarket amid expectations rate hikes overseas will bring an end to the equities boom. Chief investment officer Mark Delaney says that after taking advantage of a period of sustained growth in global equities, the $140 billion fund is now preparing for the end of that cycle. Mr Delaney was speaking yesterday as AustralianSuper revealed its balanced option fund where 90 per cent of members have their retirement savings chalked up a return of per cent for the financial year to June. That was down slightly from per cent the previous year but above the 8.3 per cent rise in the ASX 200 index. The balanced option has averaged a per cent annual return over the past five years and 9.3 per cent over the past three years. Discussing the outlook, Mr Delaney said: We know that at some point in the future markets will be more subdued. AustralianSuper had about 62 per cent of its cash in listed equities, he said, but expected to reduce that to the mid 50s within a year. That is our plan at this stage things can change, he said. Of that cash it has invested in shares, about 37 per cent is in offshore equities and 25 per cent is in companies listed in Australia. Mr Delaney said he would be keeping an eye on key policy makers, particularly the US Federal Reserve, in relation to interest rates over the year ahead while also monitoring any action around tariffs or other measures that might affect global trade. We think we are getting closer to the end of the cycle, he said. It is typically generated by a Fed tightening and it looks like we are on a path to that. The end of a cycle is inevitable but the timing as to when it occurs is it 2019, or is it 2022 is where the uncertainty lies.

The Australian, Australia Author: Cliona O'Dowd Section: Business News Article type : News Item Classification : National : 94,448 Page: 28 Printed Size: 192.

23 The Australian, Australia Author: Cliona O'Dowd Section: Business News Article type : News Item Classification : National : 94,448 Page: 28 Printed Size: cm² Market: National Country: Australia ASR: AUD 3,880 Words: 487 Item ID: Page 1 of 1 Inquiry fallout to hit AMP profits CLIONA O DOWD FINANCIAL SERVICES The worst is yet to come for AMP, as it faces increasing pressure to ditch trailing commissions while dealing with repercussions from the banking royal commission, brokerage Shaw and Partners has warned. Shaw and Partners senior analyst Brett Le Mesurier also said the wealth giant may have to cut dividends to fund the buyer of last resort (BOLR) agreements it has with its financial planners, which have a potential liability of $1.5 billion. Westpac last month announced an end to grandfathered commissions for its sales force, while Macquarie followed suit this week. This was done not just to get ahead of potential regulatory change but also to pressure competitors, Mr Le Mesurier says. We estimate that the cost of such action for AMP could be a $250 million pre-tax reduction in profit. This potential profit reduction reflects a reduction in revenue due to likely switching to lower margin products, he said in a research note. There is an additional potential effect which is greater cash outflows which would reduce the assets to which the lower revenue margin applies. The BOLR agreements AMP has with its financial planners are another pressure point for the wealth manager. These legacy agreements hold that AMP is the buyer of last resort if a financial planner wants to retire. The pricing arrangements are set at four times the revenue of that practice. If the average payment per planner is $1m then the potential liability for AMP is $1.5bn, Mr Le Mesurier warned. Our analysis indicates that AMP has no material excess capital so should such obligations prove to be material then they would probably be satisfied by lower dividends or the issue of new shares. What s more, the negative publicity AMP has received in the wake of the royal commission would hinder its ability to attract new financial planners, to retain existing ones and to attract cash inflows. Alongside the troubles AMP faces with its financial planners is a dark cloud in the form of civil action launched by ASIC and class actions over its fee-for-noservice scandal. This may result in a significant fine to AMP and ASIC may be considering what the implications are for the future of its licence, the analyst said. Charges of $400m after tax have been included for 2018 and 2019 relating to potential ASIC fines, restructuring charges and settlement of class actions, he added, while revenue is also forecast to decline on weakness in Australian wealth management. Shaw and Partners cut its target price for AMP from $3.56 to $3 and has an underperform rating on the stock. AMP shares dropped more than 3 per cent after the note was released and ended the session down 3 per cent at $3.56. AMP has no material excess capital BRETT LE MESURIER We estimate that the cost of such action for AMP could be a $250 million pre-tax reduction in profit. BRETT LE MESURIER, SHAW AND PARTNERS

24 The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 19 Printed Size: cm² Market: National Country: Australia ASR: AUD 10,306 Words: 575 Item ID: Page 1 of 2 Royal commission adds to funding costs: NAB RICHARD GLUYAS BANKING The unremitting stream of bad news from the financial services royal commission had contributed to the recent spike in bank funding costs, National Australia Bank chief executive Andrew Thorburn said yesterday. While debt markets remain open and the nation s highly rated banks have no problem with access, Mr Thorburn said the royal commission was one of a number of factors responsible for a new risk premium. There s a bit more price pressure; (debt) costs a bit more, the NAB chief told The Australian after a business lunch in Melbourne. But I think that s to do with a lot of factors about Australia where s the growth coming from, the budget deficit, where s the interest rate cycle going, the impact on mortgage customers. And yes, I think the royal commission and what might come out of it in terms of additional costs and the regulatory burden is a factor, but it s not one thing making the difference. Speculation that the major banks will raise mortgage interest rates has been intensifying, with lower-tier lenders passing on the impact of higher short-term wholesale funding costs in recent weeks. Bank of Queensland, Suncorp, AMP Bank, IMB and ME Bank have all lifted their standard variable mortgage rates in an attempt to rebuild margins. However, there is intense pressure on the major banks to keep politically sensitive mortgage rates on hold from Canberra, and from the flow of bad news generated by the royal commission. With the cash rate at a record low of 1.5 per cent, Mr Thorburn told a moderated question-andanswer session hosted by the Australian British Chamber of Commerce it was inevitable interest rates would increase over time. NAB, he said, had to price debt at a level that was competitive, bearing in mind, as well, that only a third of Australians had a mortgage. Depositors also needed consideration, as they were the main source of funding for the bank. Appearing with Mike Baird, NAB s chief customer officer, corporate and institutional, Mr Thorburn said staff incentives were necessary but overrated in terms of their ability to motivate employees. Last month, the bank said it would overhaul the bonus system for more than 4000 staff in its branches and call centres, with more emphasis on service levels and less importance placed on financial targets. As a market economy we need incentives, Mr Thorburn said. But I think they can be seriously overrated in terms of their motivational capability. As to the continuing reputational hits on the sector, the NAB chief said he had been so disappointed and saddened by the behaviour of some elements in the industry. However, there was still hope. Absolutely there s hope what we read about in stories is not representative of our people and how they treat customers, Mr Thorburn said. We acknowledge there are some things that we have to fix and we have to be a lot more authentic and forthright about saying sorry, and fixing things a lot quicker. I don t think we ve got a great track record in doing that. We have to lift our game there. Our leaders and bankers have to talk about the pride we have in what we do. So acknowledge, own, fix. Make sure (the mistakes) don t happen again. FINANCIAL SERVICES P21 We have to be a lot more authentic and forthright about saying sorry ANDREW THORBURN NAB CHIEF EXECUTIVE

The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 19 Printed Size: 510.

25 The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 19 Printed Size: cm² Market: National Country: Australia ASR: AUD 10,306 Words: 575 Item ID: Page 2 of 2 AARON FRANCIS NAB CEO Andrew Thorburn, right, with institutional banking boss Mike Baird

The Australian, Australia Author: Turi Condon Section: Business News Article type : News Item Classification : National : 94,448 Page: 19 Printed Size: 159.

26 The Australian, Australia Author: Turi Condon Section: Business News Article type : News Item Classification : National : 94,448 Page: 19 Printed Size: cm² Market: National Country: Australia ASR: AUD 3,213 Words: 369 Item ID: Page 1 of 1 Aqualand flags ambition with heavyweight board TURI CONDON PROPERTY Chinese developer Aqualand has appointed a heavyweight advisory board including former Liberal politician Warwick Smith, influential company director Gabrielle Trainor and former Multiplex chairman Ross McDiven as it flags ambitions to become one of Australia s largest developers. Mr Smith will become executive chairman of Aqualand, AL Capital and chair of the advisory board. He is chairman of the Australia China Council, and on the boards of ANZ Bank China, Estia Health, Coates Hire and Seven Group Holdings. Ms Trainor is an AFL commissioner, a director of ANZ subsidiaries OnePathLife and OnePath General Insurance, along with Infrastructure Australia, and a former director of the Barangaroo Development Authority. Aqualand group managing director Jin Lin, son of the parent group s founder Yi Lin, said the advisory board appointments marked a significant milestone for Aqualand, which entered the Australian market in 2014 and now owned 18 sites with a $5 billion development pipeline. Aqualand s parent is the Shenglong Group, which controls more than $20bn of assets in the Asia-Pacific, the US and Europe. One of Aqualand s biggest projects is Sydney s $5bn Central Barangaroo precinct, where it is part of a consortium with Melbourne developer Grocon and shopping centre giant Scentre Group. Controversy has again erupted around the precinct, with Crown Resorts reported to be preparing for legal action if the Barangaroo Development Authority pushes ahead with building heights at Central Barangaroo that will block views from Crown s casino, hotel and apartment tower project. Aqualand will also focus on major affordable housing projects and is bidding on part of the NSW government s 10-year $2.5bn Telopea social and affordable housing masterplanned community near Parramatta and has rail-oriented projects in its sights. Mr Lin also noted that Aqualand had established AL Capital led by investment banker Wayne Mo which last month spent $10.7m buying a 15 per cent stake in troubled listed real estate agency McGrath. The group expects to utilise McGrath s project marketing expertise and tagged the ASX-listed company as undervalued. Aqualand Property s new chief executive, former Mirvac head of residential John Carfi, said last week that the company aimed to rival Australia biggest developers over the next five years. The group currently had just over $2bn invested in Australia, he said.

The Australian, Australia Author: John Durie Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: 679.

Mark Delaney talks of the big three elephants in the room trade wars, the turn of the property cycle and the US Federal Reserve all of which are bearish for stocks, which explains why he will be

27 The Australian, Australia Author: John Durie Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Market: National Country: Australia ASR: AUD 13,722 Words: 760 Item ID: Page 1 of 3 End of a good run: AusSuper cuts equities as market faces headwind JOHN DURIE AustralianSuper s Mark Delaney talks of the big three elephants in the room trade wars, the turn of the property cycle and the US Federal Reserve all of which are bearish for stocks, which explains why he will be winding its equities holdings during the year. Australia s largest fund, with $140 billion under management, has 25 per cent of its money, or $35bn, invested in Australian stocks and 37 per cent, or $51.8bn, in international equities. Both will be cut this year as the local property market has turned, the US Fed is ramping up rates and geopolitical risks that fall into the trade war classification remain a potential negative. The 62 per cent equity weighting is above benchmark, which would be closer to 55 per cent, but it was the right bet last year because while the overall fund lagged behind the index the Australian equity portfolio was ahead of the market. Delaney and fund chief Ian Silk have been at the helm for longer than 12 years, given they ran the predecessor funds, STA and ARF. Good governance suggests a change in personnel at the top of the fund would help sustain member returns. Neither has publicly talked about retirement or moving to other parts. Delaney, whose fund was running third behind Host Plus after 11 months of the year, turned in another great performance last year, up 11.1 per cent, ahead of the Super ratings estimate for all funds of 9.2 per cent. But the overall fund fell below the S&P 200 accumulation index, which includes dividends and rose 13.2 per cent last financial year. The market consensus agrees with Delaney that equity markets have had the best of a good run and will slow this year. The US Fed has already Continued on Page 29

28 The Australian, Australia Author: John Durie Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Market: National Country: Australia ASR: AUD 13,722 Words: 760 Item ID: Page 2 of 3 AusSuper cuts equities as market faces global headwinds JOHN DURIE Continued from Page 17 raised short-term rates by 50 basis points and is tipping another two hikes this year. The rule of thumb in the US says you don t fight the Fed, so when it is raising rates it s time to wind equities. Trade wars are still very much in the air and the European fights over immigration tell you the geopolitical risks are still high on the agenda. The rest of the Australian- Super fund is spread evenly, with infrastructure next largest at 11 per cent, followed by cash at 8 per cent and property at 7 per cent. About 22 per cent of the fund s assets are invested offshore in foreign currencies, which acts as a hedge against a lower Australian dollar. AustralianSuper is likely to rank in the top five for balanced funds in terms of overall performance for the 2018 financial year. Its performance figures were released just as governance gurus Regnan also released data show the top-rated companies for ESG performance outperformed the index by 1.25 per cent. The moral of the tale is companies operating sustainably with the right environmental and governance frameworks outperform, therefore investors don t need to sacrifice returns to companies doing the right thing. AustralianSuper, which was created in 2000, has had an extraordinary run, growing annual cash flows from $700 million to $9bn as member numbers increased from 600,000 to 2 million. Increased cash flows and rising equity markets have helped convert $6bn in funds under management to $140bn, which on any reading is an impressive performance. Its investment chief Delaney has no fears about the Productivity Commission s planned changes to the superannuation system, which include removing default funds from the industrial relations system to be run by an expert panel led by the heads of the RBA, ACCC and APRA. The body would select around 10 funds (the final number is up to the panel) from which members could choose to set as their default fund. The top 10 would be based on long-term returns, fees and other measures of which Australian- Super would, on paper, be clearly be on top with considerable ease. The default allocation is now set by industrial awards, which doesn t make a lot of sense. As the fund has grown Delaney has put more of its management in-house and now manages 50 per cent of his equity holdings in- house. The recent ing of the BGH private equity bid for Healthscope shows Australian Super plans to take on more direct stakes in Australian companies.

29 The Australian, Australia Author: John Durie Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Market: National Country: Australia ASR: AUD 13,722 Words: 760 Item ID: Page 3 of 3 KRYGSMAN S VIEW AustralianSuper chief investment officer Mark Delaney The moral of the tale is that companies operating sustainably with the right environmental and governance frameworks outperform. JOHN DURIE

30 The Australian, Australia Author: Bridget Carter Scott Murdoch Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,316 Words: 510 Item ID: Page 1 of 2 DATA ROOM The long-running association between AMP and its investment banking advisers UBS and Macquarie is expected to come under review soon, with asset sales at the pressured wealth management company remaining a likely option. The UBS role is not expected to be under threat but Macquarie will have to work hard to ensure its Chinese walls are firmly in place in the future. DataRoom understands that other investment banks are trying to position themselves for the plum gig of working with AMP. The company s recent troubles and falling share price have not made it less attractive for investment bankers to put themselves on the advisory ticket. FULL REPORT P18 DATAROOM Banks jockey for AMP sales work The long-running association between AMP and its investment banking advisers UBS and Macquarie is expected to come under review soon, with asset sales at the pressured wealth management company remaining a likely option. The UBS role is not expected to be under threat but Macquarie will have to work hard to ensure its Chinese walls are firmly in place in the future. DataRoom understands that other investment banks are trying to position themselves for the plum gig of working with AMP. The company s recent troubles and falling share price has not made it any less attractive for investment bankers to put themselves on the advisory ticket. AMP has been trying to sell its life insurance division and New Zealand assets for at least a year, without success. Attempts to offload the businesses came after UBS and Macquarie were commissioned to carry out a review of the assets. There is increasing speculation that Macquarie is working on a plan that involves AMP Capital, which is the jewel in the crown for AMP and its most profitable business. AMP might be keen to offload a number of assets, but it seems AMP Capital is not one of those, at least in the near future. The lack of interest came before AMP was smashed by the royal commission and the EDITED BY BRIDGET CARTER carterb@theaustralian.com.au SCOTT MURDOCH murdochs@theaustralian.com.au

31 The Australian, Australia Author: Bridget Carter Scott Murdoch Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,316 Words: 510 Item ID: Page 2 of 2 company s management was overhauled as a result. The idea of AMP selling AMP Capital, which has about $187 billion under management, was immediately dismissed yesterday. Instead, a new proposition came to light that involves Macquarie, its AMP mandate and future deals that could be under consideration. It is thought that Macquarie is interested in AMP Capital, which would probably fit into its funds and asset management business nicely. The other option is that Macquarie could be scouting around to find a buyer of the business, which it could then present to the AMP board. Another matter for the AMP board is the long-running decision to find a chief executive. New chairman David Murray has been telling institutional investors that the field of candidates is down to six, and that four of those are from overseas. The appointment is not thought to be imminent, especially if an international executive is given the job. All of the six candidates are external executives, a situation that meets the widely held theory that AMP needs an outsider to come and resurrect one of Australia s oldest businesses.

The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 21 Printed Size: 194.

lender SocietyOne, chief executive Jason Yetton is moving on.

32 The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 21 Printed Size: cm² Market: National Country: Australia ASR: AUD 3,920 Words: 502 Item ID: Page 1 of 1 FOUR PILLARS RICHARD GLUYAS Word on the street After two years or so in the hot seat at marketplace lender SocietyOne, chief executive Jason Yetton is moving on. The word on the street is that Westpac s ex-head of retail and business banking will stay until the end of the month before seeking a new challenge. No one really knows what that might be, but there is a handful of high-end job vacancies that might interest an executive of Yetton s talents. They include the CEO position at AMP, CEO of the Commonwealth Bank wealth management spin-out CFS Group and, at a stretch, chief financial officer at CBA. The only thing you can say for sure is that Brian Hartzer won t be rolling out the welcome mat at Westpac, as he and Yetton never really saw eye-to-eye. News of Yetton s departure, and the elevation of chief financial officer Mark Jones to interim chief executive, was revealed yesterday in the online edition of The Australian. SocOne later released a statement confirming the change, saying the board is completing an internal and external executive search. After pioneering marketplace lending in the $100 billion consumer lending market in 2012, SocOne turned to Yetton to take the company to the next level and build a robust financial services business. While detailed financial statements are unavailable, total lending since inception has grown to $465 million, from $70m at the start of The loan book at the end of the financial year was $218m, after achieving record new lending of $184m for the 2017 financial year. While a solid performance, marketplace lending so far, at least has failed to justify the hype of several years ago. Yetton disputes this, saying the industry s local history stretches only six years compared to a decade or more in the US. In that country, the likes of Lending Club originated 36 per cent of total personal loans in 2017, up from only one per cent in Lending Club, once the darling of the fintech sector, said in a recent filing that personal loan originations in the first quarter soared 20 per cent from a year earlier to $US2.1bn. SocOne s best years may be ahead of it. In the last six months under Yetton s stewardship, the company put the building blocks in place for its next growth phase. Apart from Jones s recruitment, it hired Simon Farrell as chief technology officer, Christine Storey as head of a people and culture, and Michael Vamos as chief operating officer for agri lending. Its ambitions in the once-unfashionable category of personal lending have also provoked responses from more established players, with HSBC and Citi starting to offer risk-based pricing. Yetton, however, will not be the one who leads SocOne to greatness, if that happens. He was cagey about future plans, saying you never know what s on the other side of the fence. Asked if he d contemplate a return to public-company life, the former senior Westpac executive responded: I d be open to that. gluyasr@theaustralian.com.au Jason Yetton

33 The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 21 Printed Size: cm² Market: National Country: Australia ASR: AUD 11,802 Words: 526 Item ID: Page 1 of 2 AusSuper gets ready to batten down hatches RICHARD GLUYAS SUPERANNUATION The nation s biggest superannuation fund will shift its investment portfolio to a more defensive position over the next 12 months or so, reflecting its assessment that risk levels are rising in global and domestic markets. Mark Delaney, deputy chief executive and chief investment officer at the $140 billion AustralianSuper, said it was difficult to imagine that the investment climate over the next five years would be as benign as The fund announced yesterday that its balanced option had returned per cent for the 2018 financial year, for an aggregate 65 per cent return over five years, or per cent a year. I ll be staggered if we repeat that, Mr Delaney said. The portfolio now has a 62 per cent exposure to volatile listed equities. That is likely to fall over the next year to the mid-50s, as the fund derisked by topping up its holdings of lower-risk cash and bonds. Mr Delaney said the transition could be quicker or slower, depending on the circumstances and the course taken with three main perceived threats. The first was an expected shift in the global economic cycle as a bear market was expected to emerge as the US Federal Reserve continued to tighten interest rates in response to a strengthening economy. The bear market could be exacerbated by the trade war unleashed by the Trump administration. While the war had already started, the unanswered question, according to Mr Delaney, was its magnitude and how long it would last. The AustralianSuper chief s third concern was the potential for a housing crash in Australia. He assessed the likelihood of a crash as low, but credit conditions were tightening and prices had started to fall. Taken together, the threats were broadly similar to the environment last year. (But) global political uncertainty and increased trade protectionism did not have a sustained negative effect on markets, he said. We will be keeping an eye on key policymakers, particularly the US Federal Reserve in relation to interest rates or other measures which may affect global trade. The fund s per cent return on its balanced option compares with the industry s probable median return of 9.2 per cent. The main drivers of the aboveaverage performance were a high allocation to listed equities and an underweight position in lowerreturning defensive asset classes. AustralianSuper is a member of a consortium led by BGH Capital that has launched a $4.1bn bid for hospital operator Healthscope. The fund, which has a 14 per cent stake in Healthscope, joined the bid team, along with Carob Investment Private, which is a subsidiary of the Singapore Sovereign Wealth Fund GIC, the Ontario Teachers Superannuation Fund and Canada Pension Plan Investment Board. While the BGH-led offer was trumped in May by a $4.35bn pitch from Canadian private equity group Brookfield, both bids have been rejected. AustralianSuper has agreed not to any competing takeover proposals and has signed an agreement preventing it from engaging with a rival suitor for a period if the BGH bid is rejected.

34 The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 21 Printed Size: cm² Market: National Country: Australia ASR: AUD 11,802 Words: 526 Item ID: Page 2 of 2 IAN CURRIE Mark Delaney says he would be staggered if AustralianSuper repeated last year s balanced option result of per cent

35 The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 21 Printed Size: cm² Market: National Country: Australia ASR: AUD 4,143 Words: 384 Item ID: Page 1 of 1 Fund keeps faith in banks, downplays housing, credit crunch risks FOUR PILLARS RICHARD GLUYAS With a $7.5 billion stash of bank shares that roughly matches the sector s index weighting, AustralianSuper speaks with a loud voice on the major banks challenges and future direction. Suffice to say it hasn t been a great year for the banks, thanks to the daily pounding from Ken Hayne s financial services royal commission and Canberra s determination to hog-tie the industry in red tape. Despite this, AustralianSuper hasn t seen any compelling reason to be a net seller. Sure there are risks, but at this point they appear manageable. Deputy chief executive and chief investment officer Mark Delaney downplays the twin threats of a credit crunch and a housing crash. As to the former, he is well aware of the theory that a crackdown on the banks responsible lending obligations, which could be the policy response to case studies in the royal commission spotlighting the disastrous consequences of profligate lending, could trigger a severe round of credit rationing. The anecdotal evidence is that loan officers are already erring on the side of caution, raising the red flag on applications that previously would have been waved through. An April research report by UBS analyst Jon Mott said a 20 per cent fall in total housing finance commitments in the current financial year would slow housing credit growth to about zero. In a credit crunch scenario where approvals fell by one-third, housing credit would contract by 2-3 per cent. Delaney responds that he has a lot of faith in the Reserve Bank s ability to ensure there s sufficient credit available to grease the wheels of the economy. On the prospect of a housing crash, he dismisses it as a low probability event. If serious concerns were to emerge on either front, the RBA could respond by loosening the macroprudential constraints that were put in place to cool the housing boom. The introduction of these speed-bumps was the most important factor behind the recent housing slowdown, according to Delaney. As for the much-hyped threat from fintech, he believes it s unlikely that the underlying competitive position of incumbent banks will fundamentally change. In fact, technology offered the hope of more efficient processing and removal of a significant layer of costs. V1 - AUSE01Z01MA AustralianSuper s Mark Delaney dismisses the prospect of a housing crash as a low probability event. RICHARD GLUYAS

Adelaide Advertiser, Adelaide Section: Business News Article type : News Item Classification : Capital City Daily : 112,097 Page: 39 Printed Size: 46.

36 Adelaide Advertiser, Adelaide Section: Business News Article type : News Item Classification : Capital City Daily : 112,097 Page: 39 Printed Size: 46.00cm² Market: SA Country: Australia ASR: AUD 684 Words: 105 Item ID: Page 1 of 1 Slow period for super likely AUSTRALIANSUPER warns super returns are likely to slow as its flagship balanced fund gave returns of per cent for the 2018 financial year, down from per cent last year. AustralianSuper s Mark Delaney said the shorter term returns were likely to be volatile following a period of strong growth on global markets. We know at some point markets will be more subdued, Mr Delaney said. The latest returns mark AustralianSuper s ninth consecutive year of positive returns. The popular fund still outperformed Australia s broader share market with the S&P/ ASX 200 returning 8.3 per cent for the 12-months to the end of June.

37 Adelaide Advertiser, Adelaide Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 112,097 Page: 39 Printed Size: cm² Market: SA Country: Australia ASR: AUD 7,229 Words: 398 Item ID: Page 1 of 2 Incentives encouraged risks, NAB boss admits JEFF WHALLEY NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk-taking and the wrong behaviour. But Mr Thorburn says he believes the role of big bonuses in motivating staff has widely been overstated. Speaking at a business event in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference. Money is a part of it but it is much deeper, he said. His comments come as the financial services royal commission continues to expose banks and other finance companies that sell products and services inappropriately. In a market system we need incentives, (but) they can be seriously overrated in terms of their motivational capability for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff due to bonus schemes. Some of the incentive systems we ve had have encouraged the wrong behaviour; encouraged excess and excessive risk-taking and we have not had good enough controls to prevent that, he said. Many of the misconduct cases dissected at the royal commission involved staff cross-selling products and services touting them to people who were coming into branches or calling service centres for other reasons. Australian lenders have been cross-selling services such as financial advice to banking customers under a model known as vertical integration. That model is now coming under pressure following the misconduct scandals that have engulfed the industry in recent years, culminating in the royal commission. NAB last month changed the criteria for bonuses available to 4000 branch and callcentre staff, reducing the emphasis on financial targets. Mr Thorburn sought to defend his 30,000-strong workforce saying only a minority of people did the wrong thing. Even when we had the wrong incentives, most people did not abuse them, he said. A stick was also needed alongside the carrot of remuneration, he said. When people do the wrong thing (the stick) should be bought down hard. Because our reputation relies on trust, people who break that by breaking the law or things like that (deserves the) stick. I think some of the incentive systems we ve had have encouraged the wrong behaviour ANDREW THORBURN

Adelaide Advertiser, Adelaide Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 112,097 Page: 39 Printed Size: 486.

38 Adelaide Advertiser, Adelaide Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 112,097 Page: 39 Printed Size: cm² Market: SA Country: Australia ASR: AUD 7,229 Words: 398 Item ID: Page 2 of 2 NAB chief Andrew Thorburn says incentives led to risk-taking. Picture: Dean Lewins/AAP

39 Courier Mail, Brisbane Section: General News Article type : News Item Classification : Capital City Daily : 135,007 Page: 7 Printed Size: 57.00cm² Market: QLD Country: Australia ASR: AUD 1,001 Words: 127 Item ID: Page 1 of 1 Tape shows dodgy funeral insurance sales A RECORDING of a telephone salesman for Let s Insure pushing funeral insurance to an indigenous woman who already had it has been played at the banking royal commission. The aggressive tactics of financial entities pushing inappropriate insurance and loans on to Aboriginal people with poor financial literacy has been a feature of this week s hearings in Darwin. In the call, a salesman for Let s Insure tells Kathy Marika, a 60-year-old grandmother from Arnhem Land, that she needs to take out funeral insurance. Despite her explaining she already had it with her employer, the salesman offers life insurance and injury cover and persuades her to include her three children. Within a week, she tried to cancel the policy. She took legal action and was later refunded $

The Australian, Australia Author: Frank Gelber Section: Business News Article type : News Item Classification : National : 94,448 Page: 26 Printed Size: 831.

40 The Australian, Australia Author: Frank Gelber Section: Business News Article type : News Item Classification : National : 94,448 Page: 26 Printed Size: cm² Market: National Country: Australia ASR: AUD 16,793 Words: 1158 Item ID: Page 1 of 3 REITs in position to perform FRANK GELBER ECONOMIST The share prices of real estate investment trusts have stalled over the past few years as rising bond rates in the US and the expectation of further rate rises caused markets to flee from yield assets and look for growth. In a way that makes sense. The fall in bond rates following the global financial crisis drove a search for yield and boosted asset markets across the board. The weight of money drove firming yields for equities and infrastructure as well as property. Indeed, most of the capital growth since the GFC has been due to firming yields rather than the more usual source, namely rising incomes. Bond rates are now past the bottom and have started to rise. As bond rates continue to rise, there will be a softening of yields (prices for a given income) from that source. REITs have been lumped into the basket of yield assets. The result has been that they have significantly underperformed direct property holdings to the extent that many REITs are now trading below their net tangible assets (NTAs). That doesn t make sense. Not all property is a pure yield play. Australia s property markets are highly cyclic with different outlooks market by market, each facing different challenges. The logical thing to do is to look for properties where income growth will drive capital values. In those markets, expectations of capital gain will offset the impact of the softening of yields from rising bond rates and total returns will be strong. In those markets, property prices will be driven by income growth rather than firming yields. They are not a yield play. On the other hand, in markets where income growth is weak, softening yields will dampen prices, and could indeed lead to reductions in values. When it comes to REITs, there has been little discrimination between them on the basis of their portfolios and potential income growth. And that certainly doesn t make sense. Somehow the logic seems to be that, when consolidated into a portfolio, REITs are an equity rather than a portfolio of properties. What s a REIT worth? My answer would be that it s the property they hold plus the value of the business attached, and a component for the strength of management. Adjusted for the value of any attached business, REIT prices can differ from NTA in the short term. But over time, I would expect the average performance to match the NTA. How do I evaluate individual REITs portfolios? My first pass looks to see whether the portfolio properties are swimming with or against the tide. Strong rental growth will boost both income and capital values for the trust. The Sydney office market will continue to outperform other markets, with Melbourne not far behind. Perth, Brisbane and Adelaide will take a long time to absorb the oversupply, with correspondingly low expected total returns. Retail has fallen out of favour with investors and, with weak retail sales and further inroads from internet shopping, faces a difficult period in securing income growth. Industrial property will be hit by rising bond rates and yields, but good properties have a secure income stream. And leases are important, too. Was it only a few years ago there was an insistence by some investors on long leases and long WALE (weighted average lease expiry) properties to secure income. That makes sense in a search for yield with little downside risk to income. But the other side of the coin is that it locks out the upside from income and capital growth. From the point of view of maximising expected returns in strong leasing markets with rising rents, you don t want long WALEs. Rather, you want new leases to crystallise rises in rents and property prices. The Sydney office market is a prime example. Properties with long leases will miss much of the uplift in rents and prices, and hence total returns, particularly if the lease expires in the next downturn. You need to play the cycle in both the leasing and property markets. That s why some years ago I went on a search for REITs holding a large proportion of their portfolio in Sydney value add (refurbish, reposition and development) office property. And there are a few. But only a few. So here we are in a market where REIT prices have fallen behind NTAs. Is it because NTA is expected to fall, as many commentators who argue that listed markets lead property prices would assert? Or have they fallen behind? That s a judgment that we need to make, REIT by REIT, based on their portfolios and the market outlook. There is an arbitrage at work. If the market price is substantially greater than the NTA of a trust with good assets, there is a strong logic for a large property investment group to take out a REIT to secure its portfolio. And that has been made easier now where an offer can be made through a scheme of arrangement rather than the old way of having to make an offer and compulsorily buying out the residual only once you have 90 per cent of the shares. It has taken a lot of the risk out of

41 The Australian, Australia Author: Frank Gelber Section: Business News Article type : News Item Classification : National : 94,448 Page: 26 Printed Size: cm² Market: National Country: Australia ASR: AUD 16,793 Words: 1158 Item ID: Page 2 of 3 bidding. That s what s happening now with the Investa Office Fund, which holds the majority of its assets in good quality Sydney office properties. It s hard to buy property in strong markets. There are certainly no bargains at least not in relation to valuations. Yields are firming and you have to pay a premium to valuation to secure good properties. So, for a larger investor, why wouldn t they take out a quality portfolio at or about NTA? It makes great sense for a Blackstone to buy IOF at a small premium to NTA. And that has probably increased since the last valuation we ll soon find out. It s a bargain, really. I fear that the superannuation funds will be tempted to accept the offer. The crystallisation of shortterm returns will look good in the short-term investment performance tables. But it makes little sense for a medium-term investor. Including, I would argue, the super funds. Strong rental growth is already locked in as leases expire in their under-rented properties. And there is significant redevelopment and development potential in the current portfolio. Where else would you find such a high-return low-risk investment? I suspect that REITs will do well over the next few years, partly as a catch-up after the past few years poor performance in relation to the property they hold. But we need to be selective, to evaluate each on its own merits based on its portfolio and potential, its management and any additional income streams. Frank Gelber is chief economist at BIS Oxford Economics. The Sydney office market will continue to outperform other markets, with Melbourne not far behind

42 The Australian, Australia Author: Frank Gelber Section: Business News Article type : News Item Classification : National : 94,448 Page: 26 Printed Size: cm² Market: National Country: Australia ASR: AUD 16,793 Words: 1158 Item ID: Page 3 of 3 TOTAL RETURNS BY CITY % Canberra Brisbane Adelaide Sydney FORECAST -20 Melbourne Perth Source: BIS Oxford Economics Not all property is a pure yield play. Australia s property markets are highly cyclic with different outlooks market by market, each facing different challenges

43 The Australian, Australia Author: Bridget Carter Scott Murdoch Section: Business News Article type : News Item Classification : National : 94,448 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 15,823 Words: 435 Item ID: Page 1 of 2 DATAROOM EDITED BY BRIDGET CARTER carterb@theaustralian.com.au SCOTT MURDOCH murdochs@theaustralian.com.au Viva on track for biggest equity capital markets deal in last four years The final pitches on the Viva Energy management roadshow will be made Singapore today, with the company on track to raise at least $2.4 billion next week in the largest equity capital markets deal in Australia in four years. DataRoom understands that the retail offering will be worth $600 million. That figure could have been higher, with demand strong from brokers for the stock. Cornerstone investors have taken about $1.2bn and there are precommitments from other fund managers ahead of the institutional bookbuild that will take place next Tuesday and Wednesday. The company is then due to list at the end of next week. It will be the first major public market float this year. The commitments mean that the minimum offer size, at a 50 per cent selldown from Viva s current owners, will be $2.4bn. The capital raising could rise to be as high as almost $3.1bn. The joint lead managers on the deal are Deutsche Bank, Bank of America Merrill Lynch and UBS, with the trio pleased with demand from investors so far. Viva has appointed Bell Potter, Craigs, Crestone Wealth Management, Evans and Partners, JBWere, NAB and Ord Minnett as the retail brokers for the offer. The level that Viva s current owner, Vittol, will sell down in the float has yet to be set, but it is expected to be up to 60 per cent. The market value range for Viva Energy had been fixed at between $4.8bn and $5.2bn by analysts. It equates to a share price range of between $2.50 and $2.65 each. The final price of the stock will be decided next week. Demand for the Viva stock has been strong and one reason that fund managers are pointing out the lack of new equity deals coming to the market. A raising of at least $2.4bn would easily be the largest public market deal this year and fund managers are hungry for new stock to pick up. The Viva deal; would be the biggest IPO since Medibank s $5.7bn float in So far this year, L1 Capital leads the field, having raised more than $1bn, while another listed investment company, Wilson Asset Management Global, raised $466m at the start of last month.

Classification : National : 94,448 Page: 18 Printed

00cm² Market: National Country: Australia ASR: AUD

Australia s refined imports by product in 2017 10 OTHER

13 MIDDLE EAST 3 OTHER 17 JET FUEL 19 PETROL % % 16

Petroleum Statistics, Commonwealth of Australia 2017

44 The Australian, Australia Author: Bridget Carter Scott Murdoch Section: Business News Article type : News Item Classification : National : 94,448 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 15,823 Words: 435 Item ID: Page 2 of 2 Australia s refined imports by product in OTHER PRODUCTS 54 DIESEL Crude oil supply by location in MIDDLE EAST 3 OTHER 17 JET FUEL 19 PETROL % % 16 DOMESTIC 17 AFRICA 51 ASIA PACIFIC Source: Australian Petroleum Statistics, Commonwealth of Australia 2017 Australian petrol convenience industry growth $bn FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Source: The company

The Australian, Australia Author: Christine Lacy Section: Business News Article type : News Item Classification : National : 94,448 Page: 18 Printed Size: 217.

au Silk not so smooth Not exactly a slam dunk week for AussieSuper boss Ian Silk, who with about $140bn in members funds under management runs one of our nation s biggest organisations.

He s a male champion of change and has strong views on executive pay reflecting performance rather than just turning up to sit in the top office day after day.

45 The Australian, Australia Author: Christine Lacy Section: Business News Article type : News Item Classification : National : 94,448 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 4,385 Words: 243 Item ID: Page 1 of 2 MARGIN CALL CHRISTINE LACY christine.lacy@news.com.au Silk not so smooth Not exactly a slam dunk week for AussieSuper boss Ian Silk, who with about $140bn in members funds under management runs one of our nation s biggest organisations. Silk is not usually afraid to put his views on the table. He s a male champion of change and has strong views on executive pay reflecting performance rather than just turning up to sit in the top office day after day. But this week there was no leading from the front by Silk, also a Basketball Australia director, as the Australian Boomers hung their heads in shame over their courtside all-in brawl with their Philippines counterparts in Manila. Silk was nowhere to be seen or heard either when it came to Ben Gray s BGH Capital-led (but rejected) bid for Paula Dwyer s Healthscope last month, which saw Silk s AussieSuper morph from traditional equities investor on behalf of its union member funds to bidding consortium member alongside private equity. And now AussieSuper is facing what it predicts will be more subdued and potentially volatile returns following what has been a period of strong growth on global markets. For the 2018 financial year, AussieSuper said yesterday that its flagship balanced fund delivered returns of per cent, from per cent previously. Any wonder Silk wants to link up with Gray. Ian Silk

46 The Australian, Australia Author: Christine Lacy Section: Business News Article type : News Item Classification : National : 94,448 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 4,385 Words: 243 Item ID: Page 2 of 2 AussieSuper is facing more subdued and potentially volatile returns following what s been a period of strong growth on global l markets. MARGIN CALL AUSE01Z01MA - V1

The Australian, Australia Author: Anthony Klan Section: General News Article type : News Item Classification : National : 94,448 Page: 6 Printed Size: 236.

47 The Australian, Australia Author: Anthony Klan Section: General News Article type : News Item Classification : National : 94,448 Page: 6 Printed Size: cm² Market: National Country: Australia ASR: AUD 4,769 Words: 506 Item ID: Page 1 of 1 No more low-doc lending, CBA says BROKER FEES FACE OVERHAUL EXCLUSIVE ANTHONY KLAN The nation s biggest bank has announced it will permanently stop offering the nation s shonkiest home-lending product the subprime-style low-doc loan and change how it pays mortgage brokers in a bid to stamp out fraud and poor lending practices. The CBA yesterday said it would stop writing controversial low-doc (low-documentation) loans and pay its mortgage brokers based on value rather then volumes, in a surprise announcement just days after it said it would sell-off its entire financialadvice and mortgage-broking business. Despite banks pulling from subprime low-doc loans since about 2013 the number of low-doc loans written by banks is now at its lowest level since the early 2000s the market is booming, with non-banks describing it as the nation s fastest-growing lending market. As revealed by The Australian last week, non-bank lenders, which are not regulated by the Australian Prudential Regulation Authority, have aggressively taken over the market and are now writing a higher proportion of the nation s home loans than before the global financial crisis. Low-doc loans appeared as a niche product in Australia in the late 1990s but quickly grew in popularity until by 2010 almost one in five loans written was a low-doc loan. The loans did not require borrowers to prove their income, so were abused by people who could not afford to take out loans and by mortgage brokers, many of whom, it has been found, doctored borrowers loan application forms by boosting their claimed income in order to get loans across the line. The Australian last week revealed the case of elderly retirees Peter and Anne Harwood who lost their home and were forced to live in a caravan after their financial adviser advised them to borrow from CBA, using low-doc loans, against their home to buy an investment property. The couple, with Peter on the aged pension, were given a loan they could never repay and within months they were in arrears. Mr Harwood said after extensive wrangling with CBA, the couple obtained their loan application forms and discovered their income and assets had been vastly inflated, with claims they were earning $342,840 a year. The CBA had repeatedly refused to compensate the couple, but when contacted by The Australian as part of the newspaper s investigations, the bank issued a statement apologising to the Harwoods and said it would again investigate the matter. According to APRA, low-doc loans represented just 1.8 per cent of loans written by banks and building societies, down from 4.4 per cent in 2014 and 7.6 per cent in There are no figures for how many low-doc loans are being written by non-bank lenders. That lack of data and regulatory oversight has raised concerns with some analysts, who warn the non-banks could cause serious financial problems. Low-doc loans were created to sidestep banks own lending requirements and there are almost no legitimate reasons why a person would need a low-doc loan. The products are heavily used by tradespeople and other small business operators who deal in cash.

Northern Territory News, Darwin Author: Greg Roberts Section: General News Article type : News Item Classification : Capital City Daily : 11,279 Page: 4 Printed Size: 189.

48 Northern Territory News, Darwin Author: Greg Roberts Section: General News Article type : News Item Classification : Capital City Daily : 11,279 Page: 4 Printed Size: cm² Market: NT Country: Australia ASR: AUD 1,067 Words: 278 Item ID: Page 1 of 1 Insurer s leader had no training GREG ROBERTS THE chief executive of an insurer accused of ripping off and misleading Aboriginal families by signing them up to expensive funeral plans has no ground in insurance or qualifications to do the job, an inquiry has heard. Aboriginal Community Benefit Fund chief executive Bryn Jones, who is representing the company at the banking royal commission, was hired by its overseas-based founder and director Ron Pattenden, who won t appear. The Gold Coast-based private business has been pursued by the corporate watchdog in the courts for years for aggressive selling and hawking almost exclusively to Aboriginal people and falsely presenting itself as an indigenous corporation, the commission heard. It would deduct money from Centrelink payments before people received them an activity since made illegal and deny payouts for suicides. Aboriginal youth suicide rates are the highest in the world. More than half of ACBF s plan holders are aged under 25, and the majority are under 18 and were signed up by family. You hadn t worked in the insurance industry at all, senior counsel assisting the commission Rowena Orr QC said to Mr Jones. No, I haven t, he replied. So what were your qualifications? she asked. It was under the premise that I was to try and modernise and bring the appropriate people in that did have the relevant experience and knowledge and know-how to take the company forward, he said. I was teaching children sport and also working within the IT sector. Do you have any qualifications, Mr Jones? No, I don t, he replied. The commission is sitting in Darwin, where it is examining misconduct by financial companies targeting Aboriginal people with insurance, high-interest loans and other products.

49 Sydney Morning Herald, Sydney Author: John Collett Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 22 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 30,254 Words: 598 Item ID: Page 1 of 2 AUSTRALIANSUPER Cost savings of up to a third Super giant shuns more stock pickers John Collett Australia s largest super fund AustralianSuper will deepen its push to managing more of its $130 billion asset pile itself in the wake of another strong annual result for its 2.2 million members. Deputy chief executive and chief investment officer Mark Delaney confirmed yesterday that the fund was on track to have 50 per cent of its assets managed in-house in five years time an increase from about 30 per cent now. Earlier this year, as part of the strategy to save on fees by bringing more of the investment management in-house, Australian- Super terminated the $1.8 billion Australian shares mandate of stock picker John Sevior s Airlie Funds Management. Australia s funds management industry earns most of its fees from managing the investment mandates of superannuation funds. By cutting external managers and doing more in-house, AustralianSuper makes cost savings of up to a third on hiring external managers. AustralianSuper is expected to get much larger, increasing the economies of scale from managing more of the money in-house. The industry fund has declared a return of per cent for the year to June 30, 2018 blitzing the typical return of the biggest- 50 superannuation funds of 9.1 per cent, as estimated by SuperRatings. The $140 billion fund s balanced investment option, where 90 per cent of members have their money, is no one-year wonder. The 2.2 million-member fund produced an average annual return of per cent over the past five financial years, compared with SuperRatings estimate of 8.7 per cent over the same period. The fund is one of the more active in its asset allocation the relative weighting to the different investment classes. Mr Delaney said the drivers of performance for the balanced option were a high allocation to listed equity markets and an underweight allocation to the lowerreturning defensive asset classes such as fixed income and cash. The fund s balanced option has about 37 per cent of its money invested in international shares compared with just over 30 per cent two years ago That is quite a shift, where reweightings of only a couple of per cent are considered significant. We concluded that the global economy was picking up, helped by the US tax cuts and other factors, and that would be good for global equities, Mr Delaney said. There s been a reduction in fixed interest from about 7 per cent two years ago to about 3 per cent now to hedge against rising global interest rates. SuperRatings chief executive officer Kirby Rappell said super fund returns for the financial year have been helped by strong performances from Australian and international shares. Alternatives for investments such as infrastructure, in which industry funds such as Australian- Super have significant investments, also continued to deliver good returns, he said. Meanwhile, Mr Delaney was careful to temper expectations of his fund s members, cautioning that, although the industry fund has seen a prolonged period of very strong growth, at some some point in the future markets will be more subdued. Members should always be focused on longer-term results as fluctuations in returns are expected, he said. He said the prolonged resilience of global markets over the financial year had gone against what many had been expecting. Global political uncertainty and increased trade protectionism did not have a sustained negative affect on markets, he said. We will be keeping an eye on key policy-makers, particularly the US Federal Reserve in relation to interest rates, while also monitoring any action in relation to tariffs or other measures which may affect global trade.

50 Sydney Morning Herald, Sydney Author: John Collett Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 22 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 30,254 Words: 598 Item ID: Page 2 of 2 AustralianSuper s Mark Delaney. AustralianSuper Balanced option returns AustralianSuper (%) Median, SuperRatings SR50 (%) SOURCE: AUSTRALIAN SUPER, SUPERANNUATION INVESTMENT RETURNS FOR FINANCIAL YEARS TO JUNE 30

51 Sydney Morning Herald, Sydney Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 23 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 8,644 Words: 224 Item ID: Page 1 of 1 NAB boss says incentives overrated BANKING Mathew Dunckley Financial incentive systems inside banks have encouraged poor behaviour and are seriously overrated as a positive motivational tool for staff, says National Australia Bank chief executive Andrew Thorburn. Mr Thorburn said incentives were a necessary part of a market system. People respond to encouragement, and hope and possibility and potential. That is how we are wired. They [incentives] can be seriously overrated in terms of the motivational impact, he told an Australia British Chamber of Commerce event in Melbourne yesterday. Money is part of it but I think it is much deeper. Some of the incentives systems we have had encouraged the wrong behaviour, they have encourage excess and excessive risk-taking. Mr Thorburn said the attendant risks and the role of banks meant that incentives needed to be carefully handled. We do need to have some guard rails, he said. Asked about recent moves by Westpac s BT and Macquarie Group to end the grandfathering of commissions, Mr Thorburn said NAB would need to look at whether it followed suit. But he also argued NAB s wealth business MLC had led the way on fee-for-service advice. Banks are under pressure due to increased competition, a cooling housing market, mounting regulation and rising funding costs. But Mr Thorburn said it was important those challenges be seen as a valley out of which a company could navigate.

52 Sydney Morning Herald, Sydney Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 23 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 28,013 Words: 713 Item ID: Page 1 of 2 Conformity not high on AMP chairman Murray s priority list COMMENT Stephen Bartholomeusz Last week AMP s new chairman, David Murray, gave an insight into how he might approach the role. It won t surprise anyone who has followed his career that his style is likely to be very different, and controversial. In a speech to the Australian Centre for Public Affairs Murray said, quite bluntly, that the ASX corporate governance principles were to blame for a deterioration in the standards of governance in the financial sector by inhibiting the development of new and better models. The outcome, he said, was a trust deficit in the financial sector which should cause institutions to reflect on the internal breakdowns that had caused this and take a root and stem approach to designing new mechanisms to strengthen their governance practices. The nub of his argument appeared to be that what started as a relatively small set of broad governance principles has, over time and with ever-increasing guidance developed into a collection of detailed and prescriptive one-size-fits-all regulations. While the ASX guidelines do have an if not, why not? opt-out option, everyone simply conforms by taking the path of least resistance. Murray asked why anyone would join the board of a financial institution. You have limited due diligence defences under the law, over 1000 pages of paper to read each board cycle, regulation which holds the board and not the executive directly accountable and a community that thinks the business is too complex to manage and lacks trust. Surely this is symptomatic of a breakdown in corporate governance. But all the major institutions comply with the corporate governance principles! An example he provided was the guidelines prescription of a set of board committees with independent chairs. That had, he said, the impact of fracturing the board s work and working relationships and also, because it created special relationships between the chair of the committee and the relevant senior executives, created lines of communication around the chief executive and drew the director into a level of engagement beyond that required by a director. Murray isn t the first, and won t be the last, company director to complain, albeit generally privately, that ever-expanding corporate governance principles, regulation and legislation have made boards risk-averse and focused on box-ticking and side-covering rather than more productive and commercial issues. Despite all the legislation and regulation the simple existence of the financial services royal commission, let alone the evidence that has been presented within it, says quite loudly that the boards and senior executives of our banks and other big financial institutions haven t delivered on community expectations. Murray advocates that boards should respond by reviewing and developing their shared beliefs about their institutions and industry and then using those beliefs to redefine their governance systems and their relationships with their CEOs and other senior executives. They should initiate cultural assessments, policy reviews, delegation changes and exceptions in reporting systems and internal control procedures, he said. Essentially he is arguing that the boards of financial institutions need to develop better, more dynamic and more tailored governance structures and systems that respond to their particular needs and the nature and goals of their particular organisations rather than designing systems and structures to ensure they comply with the ASX principles and guidelines. How Murray s philosophies on governance translate to the way the board and management of AMP are structured and operate is going to be fascinating. He s not someone who has ever been concerned about being politically correct or about other people s opinions, so it won t be a surprise if AMP in future breaches the corporate governance guidelines and, exercising the if not, why not option, spells out why it has done so. Of all the major institutions, AMP has arguably been the most destabilised by the royal commission s hearings and has the business model likely to be most challenged by the commission s findings and recommendations.

53 Sydney Morning Herald, Sydney Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 23 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 28,013 Words: 713 Item ID: Page 2 of 2 It needs, with some urgency, to develop new governance and operating models and, in Murray and the CEO it turned to in desperation, Mike Wilkins, it probably has the right personnel at the top to do so. For both, conformity is likely to be at the tail end of the list of the boxes they will want to tick. 1HERSA1 A023 Boards of financial institutions need to develop better, more dynamic and more tailored governance structures.

54 Age, Melbourne Author: John Collett Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 20 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 24,504 Words: 638 Item ID: Page 1 of 2 AUSTRALIANSUPER Cost savings of up to a third Super giant shuns more stock pickers John Collett Australia s largest super fund AustralianSuper will deepen its push to managing more of its $130 billion asset pile itself in the wake of another strong annual result for its 2.2 million members. Deputy chief executive and chief investment officer Mark Delaney confirmed yesterday that the fund was on track to have 50 per cent of its assets managed in-house in five years time an increase from about 30 per cent now. Earlier this year, as part of the strategy to save on fees by bringing more of the investment management in-house, Australian- Super terminated the $1.8 billion Australian shares mandate of stock picker John Sevior s Airlie Funds Management. Australia s funds management industry earns most of its fees from managing the investment mandates of superannuation funds. By cutting external managers and doing more in-house, AustralianSuper makes cost savings of up to a third on hiring external managers. AustralianSuper is expected to get much larger, increasing the economies of scale from managing more of the money in-house. The industry fund has declared a return of per cent for the year to June 30, 2018 blitzing the typical return of the biggest- 50 superannuation funds of 9.1 per cent, as estimated by SuperRatings. The $140 billion fund s balanced investment option, where 90 per cent of members have their money, is no one-year wonder. The 2.2 million-member fund produced an average annual return of per cent over the past five financial years, compared with SuperRatings estimate of 8.7 per cent over the same period. The fund is one of the more active in its asset allocation the relative weighting to the different investment classes. Mr Delaney said the drivers of performance for the balanced option were a high allocation to listed equity markets and an underweight allocation to the lowerreturning defensive asset classes such as fixed income and cash. The fund s balanced option has about 37 per cent of its money invested in international shares compared with just over 30 per cent two years ago That is quite a shift, where reweightings of only a couple of per cent are considered significant. We concluded that the global economy was picking up, helped by the US tax cuts and other factors, and that would be good for global equities, Mr Delaney said. There s been a reduction in fixed interest from about 7 per cent two years ago to about 3 per cent now to hedge against rising global interest rates. SuperRatings chief executive officer Kirby Rappell said super fund returns for the financial year have been helped by strong performances from Australian and international shares. Alternatives for investments such as infrastructure, in which industry funds such as Australian- Super have significant investments, also continued to deliver good returns, he said. Meanwhile, Mr Delaney was careful to temper expectations of his fund s members, cautioning that, although the industry fund has seen a prolonged period of very strong growth, at some some point in the future markets will be more subdued. Members should always be focused on longer-term results as fluctuations in returns are expected, he said. He said the prolonged resilience of global markets over the financial year had gone against what many had been expecting. Global political uncertainty and increased trade protectionism did not have a sustained negative affect on markets, he said. We will be keeping an eye on key policy-makers, particularly the US Federal Reserve in relation to interest rates, while also monitoring any action in relation to tariffs or other measures which may affect global trade.

55 Age, Melbourne Author: John Collett Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 20 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 24,504 Words: 638 Item ID: Page 2 of 2 AustralianSuper s Mark Delaney. AustralianSuper Balanced option returns AustralianSuper (%) Median, SuperRatings SR50 (%) SOURCE: AUSTRALIAN SUPER, SUPERANNUATION INVESTMENT RETURNS FOR FINANCIAL YEARS TO JUNE 30

56 Age, Melbourne Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 21 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 19,580 Words: 713 Item ID: Page 1 of 2 Conformity not high on AMP chairman Murray s priority list COMMENT Stephen Bartholomeusz Last week AMP s new chairman, David Murray, gave an insight into how he might approach the role. It won t surprise anyone who has followed his career that his style is likely to be very different, and controversial. In a speech to the Australian Centre for Public Affairs Murray said, quite bluntly, that the ASX corporate governance principles were to blame for a deterioration in the standards of governance in the financial sector by inhibiting the development of new and better models. The outcome, he said, was a trust deficit in the financial sector which should cause institutions to reflect on the internal breakdowns that had caused this and take a root and stem approach to designing new mechanisms to strengthen their governance practices. The nub of his argument appeared to be that what started as a relatively small set of broad governance principles has, over time and with ever-increasing guidance developed into a collection of detailed and prescriptive one-size-fits-all regulations. While the ASX guidelines do have an if not, why not? opt-out option, everyone simply conforms by taking the path of least resistance. Murray asked why anyone would join the board of a financial institution. You have limited due diligence defences under the law, over 1000 pages of paper to read each board cycle, regulation which holds the board and not the executive directly accountable and a community that thinks the business is too complex to manage and lacks trust. Surely this is symptomatic of a breakdown in corporate governance. But all the major institutions comply with the corporate governance principles! An example he provided was the guidelines prescription of a set of board committees with independent chairs. That had, he said, the impact of fracturing the board s work and working relationships and also, because it created special relationships between the chair of the committee and the relevant senior executives, created lines of communication around the chief executive and drew the director into a level of engagement beyond that required by a director. Murray isn t the first, and won t be the last, company director to complain, albeit generally privately, that ever-expanding corporate governance principles, regulation and legislation have made boards risk-averse and focused on box-ticking and side-covering rather than more productive and commercial issues. Despite all the legislation and regulation the simple existence of the financial services royal commission, let alone the evidence that has been presented within it, says quite loudly that the boards and senior executives of our banks and other big financial institutions haven t delivered on community expectations. Murray advocates that boards should respond by reviewing and developing their shared beliefs about their institutions and industry and then using those beliefs to redefine their governance systems and their relationships with their CEOs and other senior executives. They should initiate cultural assessments, policy reviews, delegation changes and exceptions in reporting systems and internal control procedures, he said. Essentially he is arguing that the boards of financial institutions need to develop better, more dynamic and more tailored governance structures and systems that respond to their particular needs and the nature and goals of their particular organisations rather than designing systems and structures to ensure they comply with the ASX principles and guidelines. How Murray s philosophies on governance translate to the way the board and management of AMP are structured and operate is going to be fascinating. He s not someone who has ever been concerned about being politically correct or about other people s opinions, so it won t be a surprise if AMP in future breaches the corporate governance guidelines and, exercising the if not, why not option, spells out why it has done so. Of all the major institutions, AMP has arguably been the most destabilised by the royal commission s hearings and has the business model likely to be most challenged by the commission s findings and recommendations.

57 Age, Melbourne Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 21 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 19,580 Words: 713 Item ID: Page 2 of 2 It needs, with some urgency, to develop new governance and operating models and, in Murray and the CEO it turned to in desperation, Mike Wilkins, it probably has the right personnel at the top to do so. For both, conformity is likely to be at the tail end of the list of the boxes they will want to tick. NATAGE A021 Boards of financial institutions need to develop better, more dynamic and more tailored governance structures.

Age, Melbourne Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 21 Printed Size: 108.

58 Age, Melbourne Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 21 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 6,042 Words: 224 Item ID: Page 1 of 1 NAB boss says incentives overrated BANKING Mathew Dunckley Financial incentive systems inside banks have encouraged poor behaviour and are seriously overrated as a positive motivational tool for staff, says National Australia Bank chief executive Andrew Thorburn. Mr Thorburn said incentives were a necessary part of a market system. People respond to encouragement, and hope and possibility and potential. That is how we are wired. They [incentives] can be seriously overrated in terms of the motivational impact, he told an Australia British Chamber of Commerce event in Melbourne yesterday. Money is part of it but I think it is much deeper. Some of the incentives systems we have had encouraged the wrong behaviour, they have encourage excess and excessive risk-taking. Mr Thorburn said the attendant risks and the role of banks meant that incentives needed to be carefully handled. We do need to have some guard rails, he said. Asked about recent moves by Westpac s BT and Macquarie Group to end the grandfathering of commissions, Mr Thorburn said NAB would need to look at whether it followed suit. But he also argued NAB s wealth business MLC had led the way on fee-for-service advice. Banks are under pressure due to increased competition, a cooling housing market, mounting regulation and rising funding costs. But Mr Thorburn said it was important those challenges be seen as a valley out of which a company could navigate.

59 Canberra Times, Canberra Author: John Collett Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 20 Printed Size: cm² Market: ACT Country: Australia ASR: AUD 9,656 Words: 598 Item ID: Page 1 of 2 AUSTRALIANSUPER Cost savings of up to a third Super giant shuns more stock pickers John Collett Australia s largest super fund AustralianSuper will deepen its push to managing more of its $130 billion asset pile itself in the wake of another strong annual result for its 2.2 million members. Deputy chief executive and chief investment officer Mark Delaney confirmed yesterday that the fund was on track to have 50 per cent of its assets managed in-house in five years time an increase from about 30 per cent now. Earlier this year, as part of the strategy to save on fees by bringing more of the investment management in-house, Australian- Super terminated the $1.8 billion Australian shares mandate of stock picker John Sevior s Airlie Funds Management. Australia s funds management industry earns most of its fees from managing the investment mandates of superannuation funds. By cutting external managers and doing more in-house, AustralianSuper makes cost savings of up to a third on hiring external managers. AustralianSuper is expected to get much larger, increasing the economies of scale from managing more of the money in-house. The industry fund has declared a return of per cent for the year to June 30, 2018 blitzing the typical return of the biggest- 50 superannuation funds of 9.1 per cent, as estimated by SuperRatings. The $140 billion fund s balanced investment option, where 90 per cent of members have their money, is no one-year wonder. The 2.2 million-member fund produced an average annual return of per cent over the past five financial years, compared with SuperRatings estimate of 8.7 per cent over the same period. The fund is one of the more active in its asset allocation the relative weighting to the different investment classes. Mr Delaney said the drivers of performance for the balanced option were a high allocation to listed equity markets and an underweight allocation to the lowerreturning defensive asset classes such as fixed income and cash. The fund s balanced option has about 37 per cent of its money invested in international shares compared with just over 30 per cent two years ago That is quite a shift, where reweightings of only a couple of per cent are considered significant. We concluded that the global economy was picking up, helped by the US tax cuts and other factors, and that would be good for global equities, Mr Delaney said. There s been a reduction in fixed interest from about 7 per cent two years ago to about 3 per cent now to hedge against rising global interest rates. SuperRatings chief executive officer Kirby Rappell said super fund returns for the financial year have been helped by strong performances from Australian and international shares. Alternatives for investments such as infrastructure, in which industry funds such as Australian- Super have significant investments, also continued to deliver good returns, he said. Meanwhile, Mr Delaney was careful to temper expectations of his fund s members, cautioning that, although the industry fund has seen a prolonged period of very strong growth, at some some point in the future markets will be more subdued. Members should always be focused on longer-term results as fluctuations in returns are expected, he said. He said the prolonged resilience of global markets over the financial year had gone against what many had been expecting. Global political uncertainty and increased trade protectionism did not have a sustained negative affect on markets, he said. We will be keeping an eye on key policy-makers, particularly the US Federal Reserve in relation to interest rates, while also monitoring any action in relation to tariffs or other measures which may affect global trade.

60 Canberra Times, Canberra Author: John Collett Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 20 Printed Size: cm² Market: ACT Country: Australia ASR: AUD 9,656 Words: 598 Item ID: Page 2 of 2 AustralianSuper Balanced option returns AustralianSuper (%) Median, SuperRatings SR50 (%) SOURCE: AUSTRALIAN SUPER, SUPERANNUATION INVESTMENT RETURNS FOR FINANCIAL YEARS TO JUNE 30 AustralianSuper s Mark Delaney.

Canberra Times, Canberra Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 21 Printed Size: 108.

61 Canberra Times, Canberra Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 21 Printed Size: cm² Market: ACT Country: Australia ASR: AUD 2,766 Words: 224 Item ID: Page 1 of 1 NAB boss says incentives overrated BANKING Mathew Dunckley Financial incentive systems inside banks have encouraged poor behaviour and are seriously overrated as a positive motivational tool for staff, says National Australia Bank chief executive Andrew Thorburn. Mr Thorburn said incentives were a necessary part of a market system. People respond to encouragement, and hope and possibility and potential. That is how we are wired. They [incentives] can be seriously overrated in terms of the motivational impact, he told an Australia British Chamber of Commerce event in Melbourne yesterday. Money is part of it but I think it is much deeper. Some of the incentives systems we have had encouraged the wrong behaviour, they have encourage excess and excessive risk-taking. Mr Thorburn said the attendant risks and the role of banks meant that incentives needed to be carefully handled. We do need to have some guard rails, he said. Asked about recent moves by Westpac s BT and Macquarie Group to end the grandfathering of commissions, Mr Thorburn said NAB would need to look at whether it followed suit. But he also argued NAB s wealth business MLC had led the way on fee-for-service advice. Banks are under pressure due to increased competition, a cooling housing market, mounting regulation and rising funding costs. But Mr Thorburn said it was important those challenges be seen as a valley out of which a company could navigate.

Canberra Times, Canberra Section: Letters Article type : Letter Classification : Capital City Daily : 17,579 Page: 14 Printed Size: 115.

62 Canberra Times, Canberra Section: Letters Article type : Letter Classification : Capital City Daily : 17,579 Page: 14 Printed Size: cm² Market: ACT Country: Australia ASR: AUD 2,946 Words: 287 Item ID: Page 1 of 1 Glass Steagall crucial With the introduction of the Glass Steagall legislation into our Federal Parliament last Monday 25th by Bob Katter MP and seconded by independent Andrew Wilkie, we now have an unprecedented opportunity to change the banking system that threatens the livelihood of every Australian. With the billions in profit in their commercial arms, it s amazing that the banks are totally indebted beyond our wildest dreams in their investment arms to the tune of $37 trillion now. Glass Steagall is the only remedy to give security to the average bank customer as it prevents their bank form using their savings and superannuation to prop up their totally hopeless situation in their investment arms. It is a breath of fresh air to see these two men introducing and seconding this legislation. It is up to the rest of us to lobby our Federal politicians to support this bill. We must not allow them to shelve it and down play its importance. It is vital for anyone with an account in a bank. You will be told by some politicians that there is no legislation that will allow this bail in robbery, but there is. Dr Wilson Sy, former principal researcher at The Australian Prudential Regulatory Authority responded to Malcolm Turnbull s announcement of a Royal Commission saying that there is and that politicians should not lower their guard on this. Another important reason why we need Glass Steagall is that Malcolm Turnbull insisted that APRA not be included in the terms of reference for the Royal Commission. This is sleight of hand against our people, many of whom would not realise this and think the Royal Commission had power to cover everything that is relevant. Max Goulter, Ariah Park, NSW

63 Canberra Times, Canberra Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 21 Printed Size: cm² Market: ACT Country: Australia ASR: AUD 8,965 Words: 713 Item ID: Page 1 of 2 Conformity not high on AMP chairman Murray s priority list COMMENT Stephen Bartholomeusz Last week AMP s new chairman, David Murray, gave an insight into how he might approach the role. It won t surprise anyone who has followed his career that his style is likely to be very different, and controversial. In a speech to the Australian Centre for Public Affairs Murray said, quite bluntly, that the ASX corporate governance principles were to blame for a deterioration in the standards of governance in the financial sector by inhibiting the development of new and better models. The outcome, he said, was a trust deficit in the financial sector which should cause institutions to reflect on the internal breakdowns that had caused this and take a root and stem approach to designing new mechanisms to strengthen their governance practices. The nub of his argument appeared to be that what started as a relatively small set of broad governance principles has, over time and with ever-increasing guidance developed into a collection of detailed and prescriptive one-size-fits-all regulations. While the ASX guidelines do have an if not, why not? opt-out option, everyone simply conforms by taking the path of least resistance. Murray asked why anyone would join the board of a financial institution. You have limited due diligence defences under the law, over 1000 pages of paper to read each board cycle, regulation which holds the board and not the executive directly accountable and a community that thinks the business is too complex to manage and lacks trust. Surely this is symptomatic of a breakdown in corporate governance. But all the major institutions comply with the corporate governance principles! An example he provided was the guidelines prescription of a set of board committees with independent chairs. That had, he said, the impact of fracturing the board s work and working relationships and also, because it created special relationships between the chair of the committee and the relevant senior executives, created lines of communication around the chief executive and drew the director into a level of engagement beyond that required by a director. Murray isn t the first, and won t be the last, company director to complain, albeit generally privately, that ever-expanding corporate governance principles, regulation and legislation have made boards risk-averse and focused on box-ticking and side-covering rather than more productive and commercial issues. Despite all the legislation and regulation the simple existence of the financial services royal commission, let alone the evidence that has been presented within it, says quite loudly that the boards and senior executives of our banks and other big financial institutions haven t delivered on community expectations. Murray advocates that boards should respond by reviewing and developing their shared beliefs about their institutions and industry and then using those beliefs to redefine their governance systems and their relationships with their CEOs and other senior executives. They should initiate cultural assessments, policy reviews, delegation changes and exceptions in reporting systems and internal control procedures, he said. Essentially he is arguing that the boards of financial institutions need to develop better, more dynamic and more tailored governance structures and systems that respond to their particular needs and the nature and goals of their particular organisations rather than designing systems and structures to ensure they comply with the ASX principles and guidelines. How Murray s philosophies on governance translate to the way the board and management of AMP are structured and operate is going to be fascinating. He s not someone who has ever been concerned about being politically correct or about other people s opinions, so it won t be a surprise if AMP in future breaches the corporate governance guidelines and, exercising the if not, why not option, spells out why it has done so. Of all the major institutions, AMP has arguably been the most destabilised by the royal commission s hearings and has the business model likely to be most challenged by the commission s findings and recommendations.

64 Canberra Times, Canberra Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 21 Printed Size: cm² Market: ACT Country: Australia ASR: AUD 8,965 Words: 713 Item ID: Page 2 of 2 It needs, with some urgency, to develop new governance and operating models and, in Murray and the CEO it turned to in desperation, Mike Wilkins, it probably has the right personnel at the top to do so. For both, conformity is likely to be at the tail end of the list of the boxes they will want to tick. Boards of financial institutions need to develop better, more dynamic and more tailored governance structures.

Hobart Mercury, Hobart Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 28,265 Page: 33 Printed Size: 127.

JEFF WHALLEY NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk taking and the wrong behaviour.

65 Hobart Mercury, Hobart Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 28,265 Page: 33 Printed Size: cm² Market: TAS Country: Australia ASR: AUD 918 Words: 203 Item ID: Page 1 of 1 NAB boss says bonuses overrated FIX: Andrew Thorburn says NAB has work to do. JEFF WHALLEY NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk taking and the wrong behaviour. But he believes the role of big bonuses in motivating staff has widely been overstated. Speaking at a business event in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference, he said. So money is part of it but it is much deeper. His comments come as the financial services Royal Commission continues to expose cases of banks and other finance companies selling products and services inappropriately. In a market system we need incentives, but they can be seriously overrated in terms of their motivational capability for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff due to bonus schemes. I think some of the incentive systems we ve had have encouraged the wrong behaviour and we have not had good enough controls to prevent that, he said. We have to fix that.

66 Hobart Mercury, Hobart Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 28,265 Page: 33 Printed Size: cm² Market: TAS Country: Australia ASR: AUD 723 Words: 246 Item ID: Page 1 of 1 Fund cuts on shares JEFF WHALLEY AUSTRALIA S biggest superannuation fund, AustralianSuper, will reduce its exposure to the share market amid expectations rate hikes overseas will bring an end to the equities boom. Chief investment officer Mark Delaney says that after taking advantage of a period of sustained growth in global equities, the $140 billion fund is now preparing for the end of that cycle. Mr Delaney was speaking yesterday as AustralianSuper revealed its balanced option fund, where 90 per cent of members have their retirement savings, chalked up a return of per cent for the financial year to June. That was down slightly from per cent the previous year but above the 8.3 per cent rise in the ASX 200 index. The balanced option has averaged a per cent annual return over the past five years and 9.3 per cent over the past three years. Discussing the outlook, Mr Delaney said: We know that at some point in the future markets will be more subdued. AustralianSuper had about 62 per cent of its cash in listed equities, he said, but expected to reduce that to the mid 50s within a year. That is our plan at this stage things can change, he said. Of that cash it has invested in shares, about 37 per cent is in offshore equities and 25 per cent is in companies listed in Australia. Mr Delaney said he would be keeping an eye on key policy makers, particularly the US Federal Reserve.

West Australian, Perth Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 147,676 Page: 56 Printed Size: 225.

67 West Australian, Perth Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 147,676 Page: 56 Printed Size: cm² Market: WA Country: Australia ASR: AUD 3,945 Words: 344 Item ID: Page 1 of 1 Bonus plan was wrong: NAB Jeff Whalley National Australia Bank chief executive Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk-taking and the wrong behaviour. But Mr Thorburn says he believes the role of big bonuses in motivating staff has widely been overstated. Speaking at a business event in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference. Money is a part of it but it is much deeper, he said. His comments come as the financial services royal commission continues to expose banks and other finance companies that sell products and services inappropriately. In a market system we need incentives (but) they can be seriously overrated in terms of their motivational capability for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff because of bonus schemes. Some of the incentive systems we ve had have encouraged the wrong behaviour; encouraged excess and excessive risktaking and we have not had good enough controls to prevent that, he said. Many of the misconduct cases dissected at the royal commission involved staff cross-selling products and services touting them to people who were going into branches or calling service centres for other reasons. Australian lenders have been cross-selling services such as financial advice to banking customers under a model known as vertical integration. That model is now coming under pressure after the misconduct scandals that have engulfed the industry in recent years, culminating in the royal commission. NAB last month changed the criteria for bonuses available to 4000 branch and call-centre staff, reducing the emphasis on financial targets. Mr Thorburn sought to defend his 30,000-strong workforce, saying only a minority of people did the wrong thing. Even when we had the wrong incentives, most people did not abuse them, he said. A stick was also needed alongside the carrot of remuneration, he said. NAB shares closed down 36 at $27.38 yesterday.

Geelong Advertiser, Geelong VIC Section: General News Article type : News Item Classification : Regional : 16,687 Page: 19 Printed Size: 100.

68 Geelong Advertiser, Geelong VIC Section: General News Article type : News Item Classification : Regional : 16,687 Page: 19 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 333 Words: 219 Item ID: Page 1 of 1 Funeral insurer had no expertise THE chief executive of an insurer accused of ripping off and misleading Aboriginal families by signing them up to expensive funeral plans has no ground in insurance or qualifications to do the job, an inquiry has heard. Aboriginal Community Benefit Fund chief executive Bryn Jones, who is representing the company at the banking royal commission, was hired by its overseas-based founder and director Ron Pattenden, who is not appearing. The Gold Coast-based private business has been pursued by the corporate watchdog in the courts for years for aggressive selling and hawking almost exclusively to Aboriginal people and falsely presenting itself as an indigenous corporation, the commission heard. It would deduct money from Centrelink payments before people received them an activity since made illegal and deny payouts for suicides. Aboriginal youth suicide rates are the highest in the world. More than half of ACBF s plan holders are aged under 25, and the majority are under 18 and were signed up by family. You hadn t worked in the insurance industry at all, senior counsel assisting the commission Rowena Orr QC asked Mr Jones. No I haven t, he replied. Do you have any qualifications Mr Jones? No, I don t, he replied. The commission is sitting in Darwin, where it is examining misconduct by financial companies targeting and exploiting Aboriginal people.

Australian Financial Review, Australia Section: Letters Article type : Letter Classification : National : 44,635 Page: 43 Printed Size: 123.

claims on CEO pay populist nonsense" July 2). On January 6,2017, the SMH carried a report on executive salaries.

This analysis used statistics from the Australian Council of Superannuation Investors, released in late 2016.

69 Australian Financial Review, Australia Section: Letters Article type : Letter Classification : National : 44,635 Page: 43 Printed Size: cm² Market: National Country: Australia ASR: AUD 2,488 Words: 289 Item ID: Page 1 of 1 Hypocrisy on executive pay I must make comment on the topic of executive salaries ("Wayne Swan's claims on CEO pay populist nonsense" July 2). On January 6,2017, the SMH carried a report on executive salaries. It stated that the average take-home annual pay for a CEO of an ASX top 100 corporation in the 2015 financial year was a mere $5.54 million. This analysis used statistics from the Australian Council of Superannuation Investors, released in late While the SMH article refers to "average take-home pay", the AFR article refers to "fixed pay" This is not a "like for like comparison". It also understates the differential that exists between CEO remuneration and the pay of ordinary Australians. Helpfully, the SMHarticle noted that this represented $15,000 per day. They also noted that our average impoverished executive would have earned the $81,000 average full-time adult earnings in the first working week of the year. It is also instructive to look at the remuneration of senior Commonwealth public servants. A determination issued by the Remuneration Tribunal this week sets out the "total remuneration" of secretaries of Commonwealth Departments. "Total remuneration" includes salary, allowances and lump sum payments, benefits, and the employer superannuation contribution. The Secretary to the Department of the Prime Minister arid " Cabinet receives total remuneration of $896,520; the Secretary to the Treasury receives $874,790. It is not "populist nonsense" to criticise a situation where the average ASX top 100 CEO receives five times the remuneration of the most senior public servants. Remember, the ASX 100 CEOs are the captains of industry who regularly lecture us on austerity, how expenditure on welfare must be cut and how there must be a cut in company tax for Australia to compete. Yes, them. GeoffThomas TheOaks,NSW

Australian Financial Review, Australia Section: Letters Article type : Letter Classification : National : 44,635 Page: 43 Printed Size: 72.

executive of ANZ to claim over the past six years that investors have shown no interest in diversity issues ("Women discarded during a crisis: CEOs", July 3)

While large super funds and their representatives have been consistently vocal on diversity, particularly in relation to the percentage of women on boards over

70 Australian Financial Review, Australia Section: Letters Article type : Letter Classification : National : 44,635 Page: 43 Printed Size: 72.00cm² Market: National Country: Australia ASR: AUD 1,456 Words: 114 Item ID: Page 1 of 1 Diversity discounted ANZ CEO Shayne Elliott For the chief executive of ANZ to claim over the past six years that investors have shown no interest in diversity issues ("Women discarded during a crisis: CEOs", July 3) starkly shows who our corporate leaders perceive as influential in the investment arena. While large super funds and their representatives have been consistently vocal on diversity, particularly in relation to the percentage of women on boards over many years, it would appear that the people managing their money (asset managers) don't see diversity as materially important enough for them to raise with investee companies' CEOs and CFOs. Hard for them to do, perhaps, without appearing hypocritical? Amanda Wilson Balmain,NSW

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the country's largest industry super funds, worked on a takeover bid for private hospitals group Healthscope before shelving the idea but that's not the end of it Chanticleer understands from three

IFM, which was working with a consortium of industry super funds, could not make the Healthscope investment case stack up.

IFM Investors chief executive Brett Himbury refused to comment specifically on the Healthscope bid.

"We will look to partner with long-term likeminded investors if we were able to prove the investment thesis," he said. Backpage Chanticleer For crowing there was not his equal in all the land.

71 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Market: National Country: Australia ASR: AUD 9,082 Words: 798 Item ID: Page 1 of 3 IFM mulled $4b Healthscope tilt Chanticleer IFM Investors, the manager of $105 billion in assets for the country's largest industry super funds, worked on a takeover bid for private hospitals group Healthscope before shelving the idea but that's not the end of it Chanticleer understands from three sources IFM worked on the takeover proposal as part of its strategy to put more of its burgeoning funds under management into direct investments. IFM, which was working with a consortium of industry super funds, could not make the Healthscope investment case stack up. But it remains interested in the company because of its longterm growth prospects. IFM is owned by 29 funds including Hesta, CBus, HostPlus, REST and UniSuper. IFM Investors chief executive Brett Himbury refused to comment specifically on the Healthscope bid. But he said it was possible IFM and industry super funds could partner with private equity to take public companies private. "We will look to partner with long-term likeminded investors if we were able to prove the investment thesis," he said. Backpage Chanticleer For crowing there was not his equal in all the land... IFM worked on bid for Healthscope IFM Investors, the manager of put forward a $2.36 a share proposal in $105 billion in assets on behalf of April and a consortium led by Canadian the country's largest industry group Brookfield made a $2.50 a share super funds, worked on a takeover proposal in May. Both bids are in abeyance bid for private hospitals group after the board of the target company, led by Healthscope before shelving the chairman Paula Dwyer, decided against idea but that's not the end of it. providing access to the books to conduct due diligence. The shares have since fallen Chanticleer understands from three from $2.50 to about $2.20. sources that IFM worked on a takeover proposal for Healthscope as part of its IFM Investors chief executive Brett strategy to put more of its burgeoning funds Himbury refused to comment specifically under management into direct investments. on the Healthscope bid led by IFM. But he IFM, which was working with a was willing to make general comments consortium of industry super funds, could about the likely growth in super funds being not make the Healthscope investment case involved in taking public companies stack up. But it remains interested in the private. He says that with the total assets of company because of its long-term growth Australian super funds ($3 trillion) now prospects. IFM is owned by 29 funds about 50 per cent greater than the value of including Hesta, CBus, HostPlus, REST and the Australian sharemarket ($2 trillion) it is UniSuper. no longer possible for public capital markets to satisfy the demand for assets Healthscope was this year the subject of from super funds. IFM is the third largest two competing takeover proposals in excess equity fund manager in Australia with $30 of $4 billion each. A consortium led by Ben billion under management Gray's BGH Capital and AustralianSuper

equity to take public companies private. "We will look to partner with long-term like-minded investors if we were able to prove the investment thesis," he said.

72 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Market: National Country: Australia ASR: AUD 9,082 Words: 798 Item ID: Page 2 of 3 Himbury said it was possible IFM Investors and industry super funds could partner with private equity to take public companies private. "We will look to partner with long-term like-minded investors if we were able to prove the investment thesis," he said. "We would be open-minded but one of the things we would have to be very focused on is the alignment of interests, particularly the time alignment "If we would get confidence that the time horizon that we would look at for such a take private we would look at it" While Himbury won't comment on Healthscope it is clear that his philosophy about the benefits of taking public companies private is on the same wavelength as BGH and Australian Super and the Brookfield consortium. They all take the view that healthcare has good long-term prospects despite the uncertainty over government policy towards health insurance and short-term headwinds caused by the decline in usage of private hospitals. There will be heightened risks for industry super funds if they make the profound shift from owning 15 to 20 per cent shareholdings in public companies to full ownership of businesses. While industry super funds have proven expertise in managing large property and infrastructure portfolios they have little or no experience actually managing operating businesses. Himbury is clearly aware of the dangers in partnering with private equity funds or financial sponsors which have relatively short term investment horizons. For example, when Ben Gray was running TPG Capital in Australia it owned Healthscope for four years in a consortium AFRGA1 A048 NR with Carlyle Group. They bought the business in 2010 for $2.7 billion and the sold it to the sharemarket in 2014 for $3.7 billion. If a consortium of industry super funds bought Healthscope in partnership with a private equity fund they could find themselves being asked to buy out their private equity partner in five or six years time when it wanted to exit at a higher valuation.

73 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Market: National Country: Australia ASR: AUD 9,082 Words: 798 Item ID: Page 3 of 3

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74 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 48 Printed Size: cm² Market: National Country: Australia ASR: AUD 5,866 Words: 754 Item ID: Page 1 of 1 Chanticleer For crowing there was not his equal in all the land... AusSuper to slash equity risks Mark Delaney, the chief investment officer of the AustralianSuper, plans to materially wind the fund's exposure to local and international equities because of concerns about the impact of interest rate tightening by the US Federal Reserve. AustralianSuper has about 62 per cent of its $140 billion in assets in equities. Delaney told Chanticleer on Wednesday he will cut that allocation to about 55 per cent or less this financial year. "I am not bearish -1 just think that the Fed usually rings the bell for the end of the cycle," he said. "We have run a pretty solid equity exposure for the last four years and we are now getting to the end of that" Delaney joins a growing list of respected investors worried about the impact on equity markets of the withdrawal of about $1.5 trillion in central bank liquidity over the next two years. Last month, star hedge fund manager Greg Coffey predicted an end to the decadelong rally in asset prices. Others to have expressed concern include billionaire George Soros and London-based hedge fund manager Crispin Odey. Another respected fund manager concerned about Fed tightening is Hamish Douglass, who told Chanticleer he will be building his cash position in preparation for Fed tightening over the next 24 months. Cash in the $12 billion Magellan Global Fund is currently 18 per cent of funds under management. Delaney says it is hard to predict how much the Fed will tighten. The actual amount of tightening will depend upon "how the US inflation numbers go". "I don't think the Fed's objective is to cause a recession," Delaney says. "But it's very hard to position through the adjustment when rates start to rise." At June 30, AustralianSuper's balanced fund had the following asset allocation: international equities 37 per cent, Australian equities 25 per cent, infrastructure 11 per cent, property 7 per cent, cash 8 per cent, high-yield credit 5 per cent, private equity 3.7 per cent fixed income 3 per cent The balanced fund's return for the year to June was 1L08 per cent, which marks the fifth year in six that AustralianSuper's balanced option has achieved double-digit returns. The balanced fund is up 65 per cent over the past five years and up 130 per cent since Delaney said cutting the fund's exposure to equities could be done without necessarily selling down stocks and fund exposures, thanks to growth in share prices and net fund cash inflows. In fiscal 2018, AustralianSuper's total cash inflow was $9.2 billion, up from $3.6 billion in The performance of AustralianSuper's asset classes was as follows in 2018: private equity 17.6 per cent, international equities 16.3 per cent Australian equities 137 per cent, infrastructure 12.2 per cent, high yield credit 8.4 per cent property 8.1 per cent, fixed income 2.8 per cent and cash 2 per cent About 4 per cent of the return from international equities can be attributable to weakness in the Australian dollar. Delaney says the AustralianSuper international equities portfolio is all actively managed by fund managers whereas a large proportion of the Australian portfolio is in passive strategies. He says international equities is the largest exposure in the balanced fund because it provides investment choices not available in other asset classes. "It is the largest market in the world." Delaney said AustralianSuper had done extremely well out of private equity because not only did it invest in the best funds in the United States it also was able to invest alongside these private equity investors with its own in-principle investments. A classic example of this strategy at work is Healthscope where AustralianSuper is bidding for control of the company alongside Ben Gray's BGH Group. He said the Healthscope situation was "still a live deal". "As we become larger we are looking to have larger and more direct stakes in property, infrastructure and private equity," he said. Delaney bidding for Healthscope was part of the evolution of AustralianSuper's investment model, which had changed several times since he became CIO in He rejected the suggestion that there was a conflict of interest between AustralianSuper's role as a shareholder in Healthscope and its role as a partner to BGH in bidding for control of the company. "At all times we have to manage our responsibility and very importantly manage our assets in the interest of our members and within the expectations of society," he said. "Our objective is to buy a larger stake in what we think is a very good long-term investment" TONYBOYD

Newcastle Herald, Newcastle NSW Author: John Collett Section: General News Article type : News Item Classification : Regional : 23,625 Page: 17 Printed Size: 224.

week slammed the quality of financial advice given to those setting up selfmanaged super funds.

75 Newcastle Herald, Newcastle NSW Author: John Collett Section: General News Article type : News Item Classification : Regional : 23,625 Page: 17 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 2,556 Words: 457 Item ID: Page 1 of 1 Warnings over advice on one-stop property shops THE Australian Securities and Investments Commission last week slammed the quality of financial advice given to those setting up selfmanaged super funds. In its 125-page report, the regulator laid bare the risks those who set up their own super funds take when they seek advice. Of the 250 randomly selected client files reviewed by the regulator of the advice given by mostly accountants and financial advisers, a staggering 91 per cent failed to comply with the best interests duty of the Corporation Act. If that was not enough, the regulator also uncovered a web of interest conflicts between advisers and property developers, real estate agents and mortgage brokers. These are the one-stop shops which, the regulator says, have inherent conflicts of interest. These businesses have been written about in Money, where consumers are encouraged to buy investment properties at inflated values and where there are undisclosed commissions and kicks. It is often presented as a way to own that investment property you ve always wanted but never been able to afford. Rocket fuel was added to the one-stop-shop business model after the Howard government lifted the ban on borrowing inside DIY super funds in Saul Eslake, an independent economist and vice-chancellor s fellow at the University of Tasmania, has called that decision one of the dumbest tax policy decisions of the past 25 years. He said there can be a place for owning residential property outright inside a fund. But I could not see why you would want to change the law to provide Australians with yet another vehicle to engage in leveraged property speculation, Eslake says The Tax Office, which regulates DIY super funds, and ASIC have long been concerned about the one-stop shops. ASIC has taken a couple of them to court, but more seem to be appearing. Conflicts can arise from direct or indirect commissions and referral payment arrangements, the regulator said in the report. The report included a number of case studies of people who invested in property inside a DIY super fund at the behest of a onestop shop. A couple from Sydney were persuaded to start a DIY super fund by a financial adviser and accountant, specifically to invest in property in Queensland. The couple did not borrow but bought the property outright. A large part of the attraction of setting up a fund and putting property in it was the tax benefit. They found the costs of buying the $400,000 property were higher than anticipated, as was the cost of running a DIY super fund. The couple are attempting to sell their townhouse for $22,000 less than they paid for it. If they get that, after accounting for the costs, they estimate their overall loss would be $70,000.

76 Warrnambool Standard, Warrnambool VIC Section: General News Article type : News Item Classification : Regional : 8,274 Page: 10 Printed Size: cm² Market: VIC Country: Australia ASR: AUD 451 Words: 302 Item ID: Page 1 of 1 Insurer hired no experience CEO THE chief executive of an insurer accused of ripping off and misleading Aboriginal families by signing them up to expensive funeral plans has no ground in insurance or qualifications to do the job, an inquiry has heard. Aboriginal Community Benefit Fund chief executive Bryn Jones, who is representing the company at the banking royal commission, was hired by its overseas-based founder and director Ron Pattenden, who is not himself appearing. The Gold Coast-based private business has been pursued by the corporate watchdog in the courts for years for aggressive selling and hawking almost exclusively to Aboriginal people and falsely presenting itself as an indigenous corporation, the commission heard. It would deduct money from Centrelink payments before people received them an activity since made illegal and deny payouts for suicides. Aboriginal youth suicide rates are the highest in the world. More than half of ACBF s plan holders are aged under 25, and the majority are under 18 and were signed up by family. You hadn t worked in the insurance industry at all, senior counsel assisting the commission Rowena Orr QC asked Mr Jones. No, I haven t, he replied. So what were your qualifications, she asked. It was under the premise that I was to try and modernise and bring the appropriate people in that did have the relevant experience and knowledge and know-how to take the company forward, Mr Jones said. I was teaching children sport, and also working within the IT sector. Do you have any qualifications, Mr Jones? No, I don t Mr Jones replied. The commission is sitting in Darwin, where it is examining misconduct by financial companies targeting and exploiting Aboriginal people with insurance, high-interest loans and other products.

Australian Financial Review, Australia Author: james frost Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 15 Printed Size: 352.

executives will be under renewed pressure following the publication of a cache of documents that reveals weaknesses in its systems and led a senior executive to contradict her former boss and

Among them are an incendiary internal risk report that identifies systemic weaknesses as well as years of correspondence between the bank and the regulator APRA about issues within its credit

The documents also include Bendigo Bank's submission to the royal commission which contains details of as-yet unheard instances including the bank manager who forged customer signatures, staff

77 Australian Financial Review, Australia Author: james frost Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 15 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,120 Words: 755 Item ID: Page 1 of 2 Bendigo Bank papers inflame exec tensions James Frost Relationships between Bendigo Bank's top executives will be under renewed pressure following the publication of a cache of documents that reveals weaknesses in its systems and led a senior executive to contradict her former boss and criticise the bank's most senior risk officer in public. The documents were published by the Hayne royal commission late on Wednesday. Among them are an incendiary internal risk report that identifies systemic weaknesses as well as years of correspondence between the bank and the regulator APRA about issues within its credit department. The documents also include Bendigo Bank's submission to the royal commission which contains details of as-yet unheard instances including the bank manager who forged customer signatures, staff stealing from a customer's account and a mix up that saw the wrong statements sent to 8000 account holders. The admissions are contained in two submissions to the royal commission written and signed by former Bendigo Bank boss Mike Hirst, who retired after 40 years in banking last Friday. Mr Hirst makes dozens of admissions in the document including several around the bank's deficient valuations. Among them are the bank's failure to ensure valuation accuracy, independence and integrity. He also notes there were failures to visit properties and inspect livestock. These failings meant values of the property "were not indicative of the economic returns achievable" according to the statement Rural Bank's CEO Alexandra Gartmann, however, rejected these points made by Mr Hirst, saying he had been "quite harsh", while also rejecting the assessment of Bendigo's chief risk officer Tasa Corolis that there were "systemic issues" in the bank's processes. The public contradiction of Bendigo's chief risk executive by Ms Gartmann - who's limited banking experience is offset by two decades of rural experience - creates a fresh headache for incoming CEO Marnie Baker who replaced Mr Hirst on Monday. Bendigo Bank was asked if it planned to update the submission made by Mr Hirst to reflect the views of Ms Gartmann, but a spokeswoman said it would not be making any further comment Ms Gartmann did not agree there were systemic issues in Rural Bank's credit processes as identified by the Rural Bank's risk manager Taso Corolis in a 2011 report titled "Credit structure and portfolio trends" and rejected his conclusion four times while giving testimony on Monday. She said the risk department tended to view things "as a glass half-full" and that his report was needlessly inflammatory. Mr Corolis was directed to write the report by Jim Hazel, a non-executive director of the bank and chairman of the risk committee. He was responding to a letter from APRA which noted a marked increase in impairments and credit downgrades at the bank. APRA had grown increasingly wary of the situation at Rural Bank after noting a high proportion of loans being approved despite failing one or more policy tests. "Numerous deviations from credit policy is not a behaviour typically associated with banks which are considered to have strong risk cultures," the bank would tell Rural Bank in 2009.

minutes and would ask Mr Corolis to Continued p28 From page 15 Bendigo Bank papers inflame tensions investigate whether the issues "were isolated to a small number of loans or whether the issues were

The Corolis report would identify a broad range of issues including lending to borrowers with poor characters, failures to disclose, inflated appraisals submitted by conflicted lenders and regular

"Based on my review, a number of these issues were clearly systemic and not isolated and have been a significantly material contributor to the credit issues currently faced by the bank," Mr Corolis

78 Australian Financial Review, Australia Author: james frost Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 15 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,120 Words: 755 Item ID: Page 2 of 2 Mr Hazel would express "disappointment with the findings of the report" in his February 2011 board minutes and would ask Mr Corolis to Continued p28 From page 15 Bendigo Bank papers inflame tensions investigate whether the issues "were isolated to a small number of loans or whether the issues were more systemic". The Corolis report would identify a broad range of issues including lending to borrowers with poor characters, failures to disclose, inflated appraisals submitted by conflicted lenders and regular credit overrides. "Based on my review, a number of these issues were clearly systemic and not isolated and have been a significantly material contributor to the credit issues currently faced by the bank," Mr Corolis would say. The submission to the royal commission also reveals the bank has had several run-ins with the financial services regulator AUSTRAC, which recently secured a $700 million settlement from Australia's largest bank, the Commonwealth Bank It says mistakes were usually the result of "human error". It admits to filing reports to AUSTRAC that were late and incomplete but maintains it has a constructive relationship with the regulator. In admitting to examples of misconduct it also identified the behaviour of two staff members who withdrew $16,880 from a customer's account The bank repaid the customer and the staff members were sacked. In another example provided by Mr Hirst a branch manager forged the signatures of a couple after discovering they had missed signing some pages of the loan contract The branch manager was dismissed by the bank. Alexandra Gartmann, of Rural Bank, outside the royal commission.

Australian Financial Review, Australia Author: Ben Potter Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 15 Printed Size: 323.

governance and sustainable investment for the $67 billion UniSuper fund, wants the coal industry to know it's nothing personal.

its prudent stewardship of their nest eggs.

fund expansion of its export coal business to meet growing Asian demand.

of the fund's investment processes. "If s not been a conscious decision but more an outworking of our investment processes," she said.

The outworking of that process says that we have very little coal exposure and very little pure play coal, and it's all passive." Any exposure is almost incidental.

On the other hand it holds BHP Billiton and Rio Tinto, diversified miners that have reduced their coal exposures.

companies to reduce their carbon risk, tipping the Australian funds ing the push over $1 trillion. Globally, $US30 trillion ($41 trillion) s the push to cleaner energy and lower carbon.

their governance of climate-related risks and reduce their emissions. "We are very comfortable with that position. We don't see them as mutually exclusive," a spokeswoman said.

79 Australian Financial Review, Australia Author: Ben Potter Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 15 Printed Size: cm² Market: National Country: Australia ASR: AUD 6,533 Words: 721 Item ID: Page 1 of 1 'Pure play* coal just doesn't make the cut for UniSuper Ben Potter Talieh Williams, manager of governance and sustainable investment for the $67 billion UniSuper fund, wants the coal industry to know it's nothing personal. The retirement fund just doesn't have any pure play coal investments because its investment processes say they're not a good long-term bet for the for 400,000 academics and researchers who rely on its prudent stewardship of their nest eggs. Yancoal complained this week that it is being forced to seek a dual listing in Hong Kong because local fund managers gave it the cold shoulder when it approached them about a big capital raising to fund expansion of its export coal business to meet growing Asian demand. Ms Williams won't comment on whether Yancoal approached UniSuper or what reception the fund gave them, but she says the virtual absence of pure play coal from UniSuper's portfolio is a direct result of the fund's investment processes. "If s not been a conscious decision but more an outworking of our investment processes," she said. "We have a strong quality approach to our investment processes and we assess a whole range of factors. The outworking of that process says that we have very little coal exposure and very little pure play coal, and it's all passive." Any exposure is almost incidental. UniSuper is an active fund manager but it maintains small holdings in index funds for liquidity purposes and it is through these index holdings that its only pure play coal exposures arise. On the other hand it holds BHP Billiton and Rio Tinto, diversified miners that have reduced their coal exposures. This year UniSuper and QSuper, the Queensland government workers' retirement fund with about $80 billion, joined the global Climate ActionlOO+ group of fund managers dedicated to pressuring listed companies to reduce their carbon risk, tipping the Australian funds ing the push over $1 trillion. Globally, $US30 trillion ($41 trillion) s the push to cleaner energy and lower carbon. QSuper does include pure play coal companies in its portfolio because it seeks maximum diversification by investing across the S&P/ASX 200 index even as it strives to encourage companies to improve their governance of climate-related risks and reduce their emissions. "We are very comfortable with that position. We don't see them as mutually exclusive," a spokeswoman said. A spokesperson for HESTA, the $44 billion health sector fund and Climate Action 100+ member, said it doesn't own shares in Yancoal and would be prevented from doing so by its "thermal coal restriction". Even so, financial firms and listed companies are under mounting pressure to reduce their carbon risk from Continued p20 We have a strong quality approach to our investment processes and we assess a whole range of factors. Talieh Williams (left), of UniSuper From page 15 'Pure play* coal doesn't make the cut regulators such as the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, the Australian Stock Exchange and the Australian government. Politically aware fund members such as academics, government workers and union members are also pressing their funds to walk the walk. Increasingly, this means stresstesting portfolios and business strategies against the Paris climate agreement commitment to reduce carbon emissions by enough to limit global temperature increases to well below 2 degrees, and the global Task Force on Climate-related Disclosures guidelines, which require risk assessments of all plausible climate scenarios. This is too high a bar to clear for pure or majority coal companies like Yancoal, Whitehaven and New Hope Group, whose strategies are all based around increasing thermal and steel coal sales to Asia. UniSuper's engagement with domestic companies on climate issues predates its membership of Climate Action 100+ by many years. Ms Williams said joining the group "reemphasises that active engagement" - particularly with companies that have heavy carbon exposures. The fund will continue to engage directly with carbon-intensive companies as well as through Climate Action The Australian funds in the group will appoint a lead investor to each of the 13 ASX-listed companies picked for their carbon exposures, who will then arrange meetings to discuss their concerns. They include AGL Energy, Origin Energy, Adelaide Brighton Cement, Boral, Santos, Qantas, BlueScope Steel and Woolworths; BHP Billiton, Rio Tinto and Woodside Petroleum were previously nominated by global Climate Action 100+ investors. "We are not anti-fossil fuel, but we do make very, very considered investment decisions, and as part of that assessment we do do ESG [environmental, social, governance] and risk assessment," Ms Williams said.

Australian Financial Review, Australia Author: Brad Thompson Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 20 Printed Size: 347.

Ian Macfarlane has lashed out at Australian superannuation funds that refuse to invest in coal and other resources stocks.

Figures compiled by SuperRatings show dozens of super funds either exclude coal stocks or are negative about investment in the sector.

Super funds that spurn coal have missed out on a $2 billion surge in market capitalisation among the three biggest stocks, Yancoal, New Hope and Whitehaven Coal, since the start of the year.

more-efficient plants. "We are seeing super funds that won't invest in resource stocks. That is their call. That is an ideology and I don't know that it is realistic," he said.

It is a disappointing ideology, but in the end it's up to the trustees of those funds.

Japan. He ed comments by New Hope managing director Shane Stephens that the timeline for mining approvals had blown out to seven years.

80 Australian Financial Review, Australia Author: Brad Thompson Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 20 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,019 Words: 564 Item ID: Page 1 of 2 Macfarlane hits out at 'unrealistic' investment ethos Brad Thompson Former federal resource minister Ian Macfarlane has lashed out at Australian superannuation funds that refuse to invest in coal and other resources stocks. Mr Macfarlane, the Queensland Resources Council chief executive, said the ideological stand was disappointing and linked to unrealistic environmental activism. Figures compiled by SuperRatings show dozens of super funds either exclude coal stocks or are negative about investment in the sector. This is despite fund managers like Eley Griffiths tipping thermal coal prices to remain strong and to generate significant free cash flow for ASX-listed producers. Super funds that spurn coal have missed out on a $2 billion surge in market capitalisation among the three biggest stocks, Yancoal, New Hope and Whitehaven Coal, since the start of the year. Mr Macfarlane said investment policies of some Australian super funds flew in die face of efforts by Asian countries to reduce emissions by sourcing high-quality coal from Australia for use in a new, more-efficient plants. "We are seeing super funds that won't invest in resource stocks. That is their call. That is an ideology and I don't know that it is realistic," he said. "Do they expect to build lecture theatres and whatnot without steel and without concrete and without glass? "It doesn't make sense. It is a disappointing ideology, but in the end it's up to the trustees of those funds..." Mr Macfarlane said long delays and opposition to new coal mining projects were a threat to jobs and revenue growth as well as creating uncertainty for major customers in Asia and specifically, Japan. He ed comments by New Hope managing director Shane Stephens that the timeline for mining approvals had blown out to seven years. "It all adds up to one outcome and that is that Japan is looking for broader security and we are seeing, in terms of thermal coal out of the US, export tonnages doubling. "That is coal that didn't come from Queensland or NSW so it's disappointing, but it is what we have been pointing out to government will happen if don't get certainty of process." One fund to benefit from the resurgence in coal has been the WAM Leaders with its investment portfolio rising 0.7 per cent in May and 15.4 per cent over 12 months. A big contributor in May was Whitehaven, up 13.9 per cent on the of the acquisition of the Winchester South coal project and Tarrawonga mine. Eley Griffiths analyst David Ailingham said supply constraints that had the Newcastle benchmark thermal coal spot price nudge $US120 this week looked likely to continue given significant underinvestment in the past few years and long lead times associated with developing new mines. "Demand has been strong and I think people who have been bearish on demand because of the clean energy revolution have probably overplayed that in the short term," he said. "If you can find coal producers that have tier 1 assets, long mine-life assets and are in the better end of the cost curve, then they are going to be producing a lot of free cash flow at the moment "That is exactiy what we are seeing with the likes of Whitehaven and are probably going to see over the next months coming out of Stanmore Coal as well." Do they expect to build lecture theatres and whatnot without steel and without concrete and without glass? Ian Macfarlane (left)

81 Australian Financial Review, Australia Author: Brad Thompson Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 20 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,019 Words: 564 Item ID: Page 2 of 2

82 Townsville Bulletin, Townsville QLD Section: General News Article type : News Item Classification : Regional : 16,484 Page: 33 Printed Size: 56.00cm² Market: QLD Country: Australia ASR: AUD 340 Words: 124 Item ID: Page 1 of 1 Bonuses fuelled risks in NAB staff has conceded bonuses offered to staff led to excessive risk-taking and the wrong behaviour. But Mr Thorburn believes the role of big bonuses in motivating staff has widely been overstated. Mr Thorburn told a business event in Melbourne yesterday that workers often looked for more than just money as a motivator. People want encouragement. They want company which makes a difference, he said. So money is part of it but it is much deeper. His comments come as the financial services royal commission continues to expose cases of banks and finance companies selling products and services inappropriately. Mr Thorburn acknowledged wrongdoing among NAB staff due to bonus schemes.

Australian Financial Review, Australia Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 16 Printed Size: 115.

caps mandate from AustralianSuper worth $300 million to $400 million as the super behemoth follows through on its strategy of bringing equities management inhouse.

Before that it was Tribeca, Noithcape, Antares, Avoca - and that's just in Australian equities.

83 Australian Financial Review, Australia Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 16 Printed Size: cm² Market: National Country: Australia ASR: AUD 2,326 Words: 281 Item ID: Page 1 of 1 AustralianSuper exits Yarra mandate for in-house strategy Yarra Capital Management has lost a small caps mandate from AustralianSuper worth $300 million to $400 million as the super behemoth follows through on its strategy of bringing equities management inhouse. AustralianSuper has been slowly shedding investment managers for years, and cut an estimated $1 billion of ties with John Sevior's Airlie Funds Management earlier this year. Before that it was Tribeca, Noithcape, Antares, Avoca - and that's just in Australian equities. Ifs understood the news wasn't a huge surprise to Yarra (the old Goldman Sachs Asset Management Australia) and nor can AustralianSuper walk away unhappy given the relevant strategy-the emerging leaders fund - has a track record of 3.25 per cent average annual outperformance, after fees, since inception (and probably a few basis points better, given the industry fund's unique bargaining leverage). This helps explains the turnover of stocks such as APN Outdoor, Adairs and Super Retail Group, where Yarra has ceased to be substantial. However, as the emerging leaders strategy is closed to new investors, other clients are expected to step in and fill the capacity voided by AustralianSuper. The small- and mid-cap focused portfolio has succeeded with positions in Seven West Media, and is overweight NextDC, CSR and Atlas Arteria. Over one year, it slightly underperformed its composite benchmark with a 18.6 per cent return. On Tuesday we learned the industry fund's chief investment officer, Mark Delaney, plans to materially wind the fund's exposure to equities because of concerns about the implications of rising US rates. If so, Melbourne's Yarra might not be the last Aussie equities manager to leave AustralianSuper's shrinking stable. A large part of its portfolio is already in passive domestic strategies.

Australian Financial Review, Australia Author: Patrick Durkin Section: General News Article type : News Item Classification : National : 44,635 Page: 4 Printed Size: 265.

Thorburn says staff bonuses are overrated and need to be overhauled but doesn't believe they should be scrapped.

"As a market economy we need incentives. I think they can be seriously overrated in terms of their motivational capability.

of an interview-style discussion with NAB's chief customer officer, Mike Baird. "Money is part of it but I think it is much deeper," Mr Thorburn said.

" Mr Thorburn said as a career banker he was "disappointed" by the revelations from the banking royal commission and "we need to be more authentic about saying sorry" but denied the problems were

"When people do the wrong thing we should come down hard because we rely on trust" Under the NAB staff bonus changes, which are similar to changes already made by NAB's rivals, sales will contribute

goals. It will bring incentives in line with the rest of the bank, more than two years ahead of the timetable recommend by the Sedgwick review.

84 Australian Financial Review, Australia Author: Patrick Durkin Section: General News Article type : News Item Classification : National : 44,635 Page: 4 Printed Size: cm² Market: National Country: Australia ASR: AUD 5,360 Words: 646 Item ID: Page 1 of 1 Bonuses 'overrated' and need overhaul Patrick Durkin National Australia Bank chief executive Andrew Thorburn says staff bonuses are overrated and need to be overhauled but doesn't believe they should be scrapped. The bank announced last month that it would overhaul how bonuses are set for more than 4000 staff in its branches and call centres, cutting the importance of financial targets and putting more emphasis on customer service. Mr Thorburn also said that Macquarie Bank's move to scrap adviser commissions, announced on Tuesday, was "catching up" to moves they made at NAB's MLC wealth business, now being divested, years ago. "As a market economy we need incentives. I think they can be seriously overrated in terms of their motivational capability. "People want encouragement, progression, they want to work for a company that makes a difference," Mr Thorburn told an Australian British Chamber of Commerce event in Melbourne on Wednesday, as part of an interview-style discussion with NAB's chief customer officer, Mike Baird. "Money is part of it but I think it is much deeper," Mr Thorburn said. "Some of the incentives systems we have have encouraged the wrong behaviour... and we have not had good enough controls to fix that." Mr Thorburn said as a career banker he was "disappointed" by the revelations from the banking royal commission and "we need to be more authentic about saying sorry" but denied the problems were systemic and insisted there was "hope". "Even when we had the wrong incentives most people did not abuse them. Some did. That"s my bad," he said. "When people do the wrong thing we should come down hard because we rely on trust" Under the NAB staff bonus changes, which are similar to changes already made by NAB's rivals, sales will contribute 25 per cent of an employee's overall incentive structure as part of a "balanced scorecard", which includes measures of customer advocacy, compliance with risk, process improvements and financial goals. It will bring incentives in line with the rest of the bank, more than two years ahead of the timetable recommend by the Sedgwick review. However, the changes stopped short of abolishing bonuses linked to the volume of products such as loans and credit cards sold. "We have to fall and ask are they encouraging the right behaviour, having a long-time view, doing the right thing, having character and serving clients," Mr Thorburn said. "Incentives should play a part, they are overrated and we have to be careful and change some of the ones we have." Mr Thorburn said the royal commission would add cost to the bank but was only one factor among many. "Where is growth coming from, budget deficit, where is the interest rate cycle going, impact on borrowers and mortgage customers and yes, I think the royal commission and what might come out of it in terms of additional cost and a regulatory burden, so I think it's a factor but it's not one thing making a difference," he said after the lunch. Mr Baird, after joking about Melbourne, revealed the "secret" that he was born in Melbourne, which "never came out when he was NSW premier". He said Mr Thorburn, who became friends with him through St Matthews Anglican Church in Manly, called him the day after he resigned as NSW premier to ask him to return to the bank where he started as a graduate. He denied that he was coveting Mr Thorbura's job. Mr Thorburn indicated Mr Baird would be a great successor but said it was not up to him. The pair also passed an "everyman" general knowledge test, including guessing the minimum wage, average weekly earnings, average deposit for a house in Melbourne and the price of a 100-pack of newborn nappies. Key points NAB says some of its incentives had encouraged bad behaviour. Sales will now be 25 per cent of a bank employee's overall incentive structure.

Australian Financial Review, Australia Author: Misa Han Section: General News Article type : News Item Classification : National : 44,635 Page: 4 Printed Size: 359.

its staff to use customers' fear of loss to drive sales, offered staff a Vespa scooter and a three-day cruise from the Sunshine Coast as prizes, and promised Coles and Myer vouchers to customers who

In what could be a preview of Round six of hearings on insurance, recordings of calls made by Let's Insure call centre staff to a former consumer were played in the commission.

English is her second language and she has hearing difficulties.

at home, before telling her that the insurance she had through work had an "expiry date" and "you can't actually cover the whole family".

85 Australian Financial Review, Australia Author: Misa Han Section: General News Article type : News Item Classification : National : 44,635 Page: 4 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,261 Words: 665 Item ID: Page 1 of 2 Tear of loss' used to sell life insurance MisaHan Award-winning life insurer Let's Insure trained its staff to use customers' fear of loss to drive sales, offered staff a Vespa scooter and a three-day cruise from the Sunshine Coast as prizes, and promised Coles and Myer vouchers to customers who made referrals, the Hayne royal commission has heard. In what could be a preview of Round six of hearings on insurance, recordings of calls made by Let's Insure call centre staff to a former consumer were played in the commission. As her granddaughters watched, 60-year-old Aboriginal woman Kathy Marika told the royal commission in Darwin on Wednesday that she found it difficult to understand the sales staff. English is her second language and she has hearing difficulties. In one 38-minute phone call, a Let's Insure sales representative with an English accent was heard engaging in small talk with Ms Marika about her children, her grandchildren, her work and her carpet at home, before telling her that the insurance she had through work had an "expiry date" and "you can't actually cover the whole family". He went on to say: "The reason why people take one out with us as well as the one they have at work, because we're priced up to 50 per cent less. As you can imagine you don't really want to be spending too much, do ya?"; "Definitely don't want to be paying too much, ay?"; "As you can imagine, serious injuries they can happen to anyone in the family"; "It costs a lot for an ambulance nowadays doesn't it"; "When you pass away, Kathy, the bills still carry on, don't they". Ms Marika finally conceded: "Might as well join" and "Yeah, that does sound pretty good". By that time she had already spoken to Let's Insure twice and told them she was happy with her life insurance via Media Super. Let's Insure managing director Russell Howden said that was an "appalling call". "We never ever sanctioned aggressive sales tactics," he told the commission. Mr Howden said the spike in sales the company experienced was due to incentives offered to best-performing staff, such as a Vespa scooter and a three-day cruise from the Sunshine Coast to Sydney. However, a training presentation showed that sales staff were told to use "fear of loss" as one of the ways to per- AFFIGA1 A004 VNR suade customers to sign up to its life insurance products. They were also told to close the deal by making it clear to the customer "the decision is being made" and projecting confidence in their voices. Staff were also trained to handle any objection raised by customers by raising a minimum of two objections in response to "help the customer view the product in a different light". When Ms Marika called Let's Insure to "cancel the whole thing" because she was not working and could not afford the premium, the company did not cancel the policy. Instead, she was told she would not have to pay the premium for the next month and to give the sales representative a call if she was still struggling. Marketing materials show that Let's Insure also ran a referral program where customers would get $20 Coles and Myer vouchers for every referral of a friend or relative. In a separate phone call, a Let's Insure sales representative rang Ms Marika to try to get the phone numbers of her family and friends, saying that if she gave out more numbers she would have the "maximum chance of maximum vouchers". Ms Marika said she never received any vouchers. Mr Howden said the company never actively targeted the Aboriginal community. "It's not a focus of our business," he said. According to its website, Let's Insure is a "proud winner" of the 2017 Canstar Outstanding Value Award for Funeral Insurance for 50s and over. When you pass away, Kathy, the bills still carry on, don't they? Extract of Let's Insure salesman's 38-minute telephone pitch to potential customer.

86 Australian Financial Review, Australia Author: Misa Han Section: General News Article type : News Item Classification : National : 44,635 Page: 4 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,261 Words: 665 Item ID: Page 2 of 2 Kathy Marika appeared at the royal commission in Darwin on Wednesday.

Illawarra Mercury, Wollongong NSW Section: General News Article type : News Item Classification : Regional : 10,806 Page: 10 Printed Size: 160.

87 Illawarra Mercury, Wollongong NSW Section: General News Article type : News Item Classification : Regional : 10,806 Page: 10 Printed Size: cm² Market: NSW Country: Australia ASR: AUD 1,016 Words: 302 Item ID: Page 1 of 1 Insurer hired no experience CEO THE chief executive of an insurer accused of ripping off and misleading Aboriginal families by signing them up to expensive funeral plans has no ground in insurance or qualifications to do the job, an inquiry has heard. Aboriginal Community Benefit Fund chief executive Bryn Jones, who is representing the company at the banking royal commission, was hired by its overseas-based founder and director Ron Pattenden, who is not himself appearing. The Gold Coast-based private business has been pursued by the corporate watchdog in the courts for years for aggressive selling and hawking almost exclusively to Aboriginal people and falsely presenting itself as an indigenous corporation, the commission heard. It would deduct money from Centrelink payments before people received them an activity since made illegal and deny payouts for suicides. Aboriginal youth suicide rates are the highest in the world. More than half of ACBF s plan holders are aged under 25, and the majority are under 18 and were signed up by family. You hadn t worked in the insurance industry at all, senior counsel assisting the commission Rowena Orr QC asked Mr Jones. No, I haven t, he replied. So what were your qualifications, she asked. It was under the premise that I was to try and modernise and bring the appropriate people in that did have the relevant experience and knowledge and know-how to take the company forward, Mr Jones said. I was teaching children sport, and also working within the IT sector. Do you have any qualifications, Mr Jones? No, I don t Mr Jones replied. The commission is sitting in Darwin, where it is examining misconduct by financial companies targeting and exploiting Aboriginal people with insurance, high-interest loans and other products.

Australian Financial Review, Australia Author: Alice Uribe Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 18 Printed Size: 381.

wealth managers committed to allowing their employed financial planning groups to receive "grandfathered" commissions for recommending both their in-house and external financial products.

The Australian Securities and Investments Commission has called for grandfathered commissions to be banned, a proposal the royal commission is considering recommending.

She noted for Shadforth, which employs 149 planners, the "dollar value" of grandfathered commissions was "not material".

bonuses for its salaried advisers. ANZ said in a statement that it intended "operating according to the requirements of current legislation as it relates to adviser remuneration".

However, arrangements existing before July 1,2013, were exempted or "grandfathered".

Other big banks have already made this move, beginning with the Commonwealth Bank, which in 2013 scrapped grandfathered commissions for planners in its in-house Commonwealth Financial Planning.

- Wfisj acvwealth management arm BT Financial Group last month announced that it would get rid of grandfathered commissions for its inhouse advisers working across its Westpac, St George, Bank of

88 Australian Financial Review, Australia Author: Alice Uribe Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,706 Words: 687 Item ID: Page 1 of 2 IOOF, ANZ stick with commissions Alice Uribe ANZ Banking Group and IOOF are the last of the large wealth managers committed to allowing their employed financial planning groups to receive "grandfathered" commissions for recommending both their in-house and external financial products. IOOF-owned Shadforth Financial Group will continue to get commissions, as will its aligned planners working across the Bridges, Lonsdale and Consultum networks. The Australian Securities and Investments Commission has called for grandfathered commissions to be banned, a proposal the royal commission is considering recommending. An IOOF spokeswoman said in relation to its more than 500 aligned planners the company was "bound by its contractual obligations and will continue to honour them". She noted for Shadforth, which employs 149 planners, the "dollar value" of grandfathered commissions was "not material". More than 350 planners working for ANZ's in-house ANZ Financial Planning unit will continue to get these grandfathered commissions, even though the bank earlier this year scrapped product-linked bonuses for its salaried advisers. ANZ said in a statement that it intended "operating according to the requirements of current legislation as it relates to adviser remuneration". Conflicted remuneration, where product providers paid advisers a commission as an incentive to recommend particular products, was banned in 2013 as part of the Future of Financial Advice reforms. However, arrangements existing before July 1,2013, were exempted or "grandfathered". Macquarie Bank said on Tuesday it would stop employee advisers in its wealth management arm from accepting grandfathered commissions from April next year. Other big banks have already made this move, beginning with the Commonwealth Bank, which in 2013 scrapped grandfathered commissions for planners in its in-house Commonwealth Financial Planning. National Australia Bank followed swiftly in 2014 with a similar ban for its salaried planners, while AMP has also banned grandfathered commissions for its more than 1400 employed advisers in Wfisj acvwealth management arm BT Financial Group last month announced that it would get rid of grandfathered commissions for its inhouse advisers working across its Westpac, St George, Bank of Melbourne and BankSA networks in October - costing the company about $40 million. For all the big banks and AMP, financial advisers not employed by them but working in dealer groups under their licences will continue to get grandfathered commissions because of previous contractual arrangements. This means that advisers at CBA's aligned groups Financial Wisdom and Count Financial, which will be hived off from the bank as part of a demerger announced last week, still get grandfathered commissions. Advisers in its ANZ's OnePath aligned dealer groups - Elders Financial Planning, Millennium 3, RI Advice and Financial Service Partners - which were sold to IOOF as part of a wider $975 million sale of its wealth arm in 2017, will also continue to get grandfathered commissions. It is understood that advisers working at BTs aligned dealer groups Magnitude and Securitor will also continue to get grandfathered commissions, but not other forms of "grandfathered payments". Advisers working in aligned dealer groups can, however, elect to not take any grandfathered commissions. Financial services companies still pay billions in grandfathered commissions. Westpac told the royal commission it paid about $200 million in conflicted remuneration every year since Daniel Toohey, an analyst at Morgan Stanley, estimated that grandfathered commissions account for about 25 per cent of the revenue advisers in AMP's wealth business generate. AMP figures suggest grandfathered commissions account for per cent of advisers' income. The financial advice industry itself has accepted it may be time to review grandfathered commissions, but has recommended they be phased out over three years. The Financial Planning Association said grandfathered commissions had "led to an environment where many clients are paying fees and yet receiving no services". In a submission to the commission, ASIC said "the grandfathering of commissions should cease as soon as reasonably practicable and to the maximum possible extent," but agreed there might need to be a transition period. Key points Some grandfathered payments continue despite calls for them to be banned. Thefinancialadvice industry itself has accepted it may be time to end the practice.

89 Australian Financial Review, Australia Author: Alice Uribe Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 7,706 Words: 687 Item ID: Page 2 of 2 Contractual obligations mean financial planners working in dealer groups will continue to receive grandfathered commissions, PHOTO: SHUTTERSTOCK

Australian Financial Review, Australia Author: Joyce Moullakis Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 18 Printed Size: 503.

Australia legal settlement The Australian Financial Review spoke to numerous experts, who say Australia is still lagging when it comes to tackling problems relating to money laundering and other

David Chaikin, of The University of Sydney's business school, believes while AUSTRACs action against CBA and ASX-listed Tabcorp has shifted the dial, regulators, banks and other companies need to

"There is a lot of work being done in reg tech but we shouldn't assume that is going to provide a magic solution.

" Dr Chaikin said "there is obviously a catch-up" for Australia and the nation's banks and financial services sector.

"In terms of a regulator, they have been criticised over a long period of time on enforcement and not going after thejjig institutions.". _.

"The UK is deemed to be the world leader in in terms of anti-money laundering and in the UK the regulator has more teeth.

90 Australian Financial Review, Australia Author: Joyce Moullakis Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 10,174 Words: 867 Item ID: Page 1 of 2 AUSTRAC late to party, says expert Money laundering The regulator is lagging on enforcement, critics say. Joyce Moullak is Australia remains well behind Britain and the United States on tackling money laundering and other criminal behaviour despite upping its game after a landmark Commonwealth Bank of Australia legal settlement The Australian Financial Review spoke to numerous experts, who say Australia is still lagging when it comes to tackling problems relating to money laundering and other criminal behaviour. David Chaikin, of The University of Sydney's business school, believes while AUSTRACs action against CBA and ASX-listed Tabcorp has shifted the dial, regulators, banks and other companies need to more closely address the potential threat as criminals attempt to stay ahead of technology advances. "In Australia there is not enough confiscation, prosecution and enforcement," he said. "There is a lot of work being done in reg tech but we shouldn't assume that is going to provide a magic solution. All the banks have algorithms with monitoring technology but they are still pretty crude." Dr Chaikin said "there is obviously a catch-up" for Australia and the nation's banks and financial services sector. "AUSTRAC on the intelligence side are very good and are acknowledged as being a world leader in collecting and analysing information and data," he said. "In terms of a regulator, they have been criticised over a long period of time on enforcement and not going after thejjig institutions.". _.. Last month, CBA settled legal proceedings initiated by AUSTRAC over allegations including lax anti-money laundering protections and reporting, and made further admissions about the inadequate processes. CBA agreed to pay $702.5 million to settle the matter and agreed to new breaches of the Anti-Money Laundering and Counter-Terrorism Act (AML- CTF), taking the total number of contraventions to 53,750. "The UK is deemed to be the world leader in in terms of anti-money laundering and in the UK the regulator has more teeth. AUSTRAC are late to the party," said Roger Carson, co-founder of know-your-customer automation group encompass. "The real issue isn't ticking the box. Close to $US2.5 trillion in illicit money flows through the financial system each year and less that 1 per cent of this is believed to be detected... people should sit up and take notice of that." KPMG forensic partner Gary Gill said AUSTRACs action against Tabcorp and CBA had created a "change in mindset" in this market "The UK and US are probably still somewhat ahead of Australia but the gap has changed," he said. "They [AUSTRAC] are now starting to get more aligned with other regulators around the world... and largely because of what's happened there is more of a fear factor" for Australian companies. In April, AUSTRAC chief Nicole Rose highlighted the agency's collaboration and co-operation with the banks and financial sector. "My nirvana, if you like, is to be in such close contact with particularly the four banks that any issues we have we are discussing early on and regularly so there are no surprises," she said at the time. In other industries, Ms Rose noted. the importance of information sharing and said AUSTRAC was "ramping up" education around money laundering and related areas in the pubs and clubs and casino sector, and among real estate agents, lawyers and accountants. Collaboration with banks has increased via the Fintel Alliance, created a year ago with joint funding from AUSTRAC and the major banks to improve the sharing of security threat information. "That is one mechanism trying to be used to overcome a bottleneck of information and help to do the job better," Dr Chaikin said, noting though that more preventive action was required. "The [criminal] money chains are getting longer," he said, noting a string of lessons for Australian companies stemming from the CBA-AUSTRAC case, which focused on the bank's automatic teller machines being used to launder drug money out of the country. "Blind Freddie would have told you there would have been anti-money laundering risks where there are large amounts of money being deposited." The risks around anti-money laundering are also heightened by the advent of real-time payments in Australia and the rise of digital currencies, which Dr Chaikin said would make it more difficult for the federal police to freeze fund flows in a timely manner. Mr Carson saidjhat while the local banks were "now rushing" to address and remediate new risks, hiring more compliance people was not a "sustainable solution". "Australian banks are good at onboarding customers but a customer's risk profile may change over the course of a relationship, so there is also the question of continuously monitoring existing customers to identify and promptly remediate potential new risks," he said. "This is currently a very manual process, making it slow and costly. As a result, firms are exposed to unknown risks due to a growing log of outdated customer information. "We believe that technology, specifically automation, is the only way regulated firms can manage the exploding costs of compliance while improving the effectiveness of their AML programs."

00cm² Market: National Country: Australia ASR: AUD 10,174 Words: 867 Item ID: 978093951 Page 2 of 2 Less than 1 per cent of

91 Australian Financial Review, Australia Author: Joyce Moullakis Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 18 Printed Size: cm² Market: National Country: Australia ASR: AUD 10,174 Words: 867 Item ID: Page 2 of 2 Less than 1 per cent of illicit money is believed to be detected. Roger Carson, encompass Nicole Rose says AUSTRAC is ramping up education on money laundering beyond pubs, clubs and casinos. PHOTO: JUSTIN MCMANUS

Australian Financial Review, Australia Author: Nick Lenaghan Section: Property Article type : News Item Classification : National : 44,635 Page: 38 Printed Size: 152.

in the Adelaide CBD for $14.5 million, which it plans to develop into a hotel.

The Adelaide property is one of two Australian projects controlled by Mr Chia's own development business.

92 Australian Financial Review, Australia Author: Nick Lenaghan Section: Property Article type : News Item Classification : National : 44,635 Page: 38 Printed Size: cm² Market: National Country: Australia ASR: AUD 3,074 Words: 316 Item ID: Page 1 of 1 Chip Eng Seng in Adelaide Nick Lenaghan Singapore's Chip Eng Seng has bought a site on Pine Street in the Adelaide CBD for $14.5 million, which it plans to develop into a hotel. The acquisition of 51 Pine Street was from an ownership entity in which Chip Eng Seng chief executive Raymond Chia Lee Meng has a 40 per cent stake. The Adelaide property is one of two Australian projects controlled by Mr Chia's own development business. Chip Eng Seng signalled its interest in the two assets with Mr Chia's appointment two years ago. The Pine Street property is a freehold site and has a land size of 1283 square metres. It is currently occupied by a vacant office building. "The company intends to demolish the building and redevelop the property into a hotel development," Chip Eng Seng said in a market statement The Singaporean player is already familiar with the Adelaide's hospitality market, last year buying the Mercure & Ibis Styles Grosvenor Hotel there for $43 million. Managed by AccorHotels, that hotel has 245 guestrooms. Chip Eng Seng also has interests in Perth. The latest Adelaide acquisition Redevelopment: The site at 51 Pirie Street, Adelaide, will soon be a hotel. comes as the Singaporean player completes its exit from the controversial Tower Melbourne project In November last year, Chip Eng Seng pulled the plug on the $350-million residential project in the Melbourne CBD in the face of a lengthy legal battle. In a complex deal, the Singaporean player sold out of the residential project, alongside its neighbouring landlord the wealthy Chow family, also based in Singapore. Cbus Property then secured a $1 billion-plus development opportunity in the heart of the Melbourne CBD, buying out neighbouring properties after the two Singaporean owners put aside their lengthy property dispute and offered their real estate to the market Chip Eng Seng said it had completed its sale of the Tower Melbourne site this week.

93 Gold Coast Bulletin, Gold Coast QLD Section: General News Article type : News Item Classification : Regional : 21,468 Page: 23 Printed Size: 58.00cm² Market: QLD Country: Australia ASR: AUD 370 Words: 132 Item ID: Page 1 of 1 Fund seeks reduced exposure AUSTRALIA S biggest superannuation fund, AustralianSuper, will reduce its exposure to the sharemarket amid expectations rate hikes overseas will bring an end to the equities boom. Chief investment officer Mark Delaney says that after taking advantage of a period of sustained growth in global equities, the $140 billion fund is now preparing for the end of that cycle. Mr Delaney was speaking yesterday as AustralianSuper revealed its balanced option fund where 90 per cent of members have their retirement savings chalked up a return of per cent for the financial year to June. That was down slightly from per cent the previous year. The balanced option has averaged a per cent annual return over the past five years and 9.3 per cent over the past three years.

Gold Coast Bulletin, Gold Coast QLD Author: Jeff Whalley Section: General News Article type : News Item Classification : Regional : 21,468 Page: 23 Printed Size: 164.

94 Gold Coast Bulletin, Gold Coast QLD Author: Jeff Whalley Section: General News Article type : News Item Classification : Regional : 21,468 Page: 23 Printed Size: cm² Market: QLD Country: Australia ASR: AUD 1,046 Words: 320 Item ID: Page 1 of 1 Incentives encouraged risks, NAB chief admits JEFF WHALLEY NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk taking and the wrong behaviour. But Mr Thorburn says he believes the role of big bonuses in motivating staff has widely been overstated. Speaking at a business event in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference, he said. So money is part of it but it is much deeper. His comments come as the financial services royal commission continues to expose cases of banks and other finance companies selling products and services inappropriately. In a market system we need incentives, (but) they can be seriously overrated in terms of their motivational capability for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff due to bonus schemes. I think some of the incentive systems we ve had have encouraged the wrong behaviour they have encouraged excess and excessive risk taking and we have not had good enough controls to prevent that, he said. We have to fix that. Many of the misconduct cases dissected at the royal commission involved staff cross-selling products and services touting them to people who were coming into branches or calling service centres for other reasons. Australian lenders have routinely been cross-selling services such as financial advice to banking customers under a model known as vertical integration. That model is now coming under pressure following the misconduct scandals that have engulfed the industry. NAB late last month changed the criteria for bonuses available to more than 4000 branch and call-centre staff, reducing the emphasis on financial targets. Yesterday, Mr Thorburn sought to defend his 30,000- strong workforce, saying it was a minority of people who did the wrong thing.

Australian Financial Review, Australia Author: Nick Lenaghan Section: Property Article type : News Item Classification : National : 44,635 Page: 31 Printed Size: 865.

4 billion building boom in office towers, apartments and hotels in centl Melbourne is raising fears the city y become a victim of its own success, with oversupply putting pressure n vacancy, rents

t is the biggest single boost to supply that the Melbourne office market has n so far and the strongest growth in supply in more than a decade.

up of space has been outperforming in recent years, with tenants swallowing 75-100,000 square metres annually.

95 Australian Financial Review, Australia Author: Nick Lenaghan Section: Property Article type : News Item Classification : National : 44,635 Page: 31 Printed Size: cm² Market: National Country: Australia ASR: AUD 17,496 Words: 1472 Item ID: Page 1 of 3 Can central Melbourne absorb a $7.4b development boom? Nick Lenaghan A $7.4 billion building boom in office towers, apartments and hotels in centl Melbourne is raising fears the city y become a victim of its own success, with oversupply putting pressure n vacancy, rents and values. 1 * conce f e snar Pest in the office sector, which is expected to proe around 500,000 square metres of w space in at least 12 new buildings n ^e curren t two to three-year cycle. t is the biggest single boost to supply that the Melbourne office market has n so far and the strongest growth in supply in more than a decade. s supply will increase by 170,000 e metres in 2019 and by 290,000 square metres in Historically, the e net supply is 75,0O0 square s annually. n fhe demand side ^ takg.up of space has been outperforming in recent years, with tenants swallowing ,000 square metres annually.» Bur unless white-collar jobs growth keeps up, fuelling an outsize demand for new offices, the CBD vacancy rate could double by 2022 to around 9 per cent Its a looming problem not many want to talk about. Investa's Michael Cook is one few landlords willing to confront the elephant in the room. "We are nervous that Melbourne's recent outstanding rates of absorption may not continue and absorb this oversupply," Investa's group executive for property told The Australian Financial Review this week. It is an unprecedented level of activity, second only in the country to the once-in-a-generation boom in Sydney where $8.4 billion in construction is now under way. By May 2018 in Melbourne, there were 44 separate projects under construction in commercial hubs of inner-city Melbourne, according to CoreLogic figures. That tally is a leap up from the $5.1 billion worth of projects under development in the same precincts last year, which was spread across 65 construction projects. Eliza Owen, CoreLogic's commercial research analyst, said the Melbourne boom reflects a broader construction trend taking place across Australia in the last 12 months. "The number of projects has been on the decline, while a few high-value projects inflate the scale and value of work being done," Ms Owen said. New landmarks are emerging, most notably along Collins Street which now extends into Docklands. Midway is Cbus Property's Collins Arch project, a $1.25 billion twin-tower extravaganza, combining office space, a hotel and upmarket apartments. At the top of Collins Street, super fund giant-qkr is hard at work on its own $800 million mixed-use project at in the prized east end. Meanwhile, listed giant Lendlease has several towers under way at the Continued p36 From page 31 Can Melbourne CBD absorb $7.4b boom? Docklands end of the city in its $2.5 billion Melbourne Quarter project There are two office towers on the vast site already, a raised sky park is being built and Lendlease is digging the foundations for a 44-storey apartment skyscraper which Japan's Mitsubishi Estate Asia is ing. The 2018 boom is defined by office towers, a hot-button issue in a city where space for workers has been crowded out by apartment towers of late. This time last year, the value of Melbourne's construction was largely held in residential projects: $3.3 billion, or 65 per cent of the total value of construction, according to CoreLogic. Apartment projects still dominate, Apartment projects still dominate, but a much larger portion of the value of work is defined by office space now. Residential work under way now accounts for $2.8 billion, or 37.8 per cent, while offices comprised $2.1 billion, or 28.4 per cent of projects in central Melbourne. The rise in commercial property values adds to the total return from towers, encouraging developers to build more. Investa's research head David Cannington is keeping a close eye on the situation. His view of the potential for over-supply is more moderate than his colleague Mr Cook's but it all hinges on where the economy goes. "This is the largest single-cycle injection of office supply that we've seen in the Melbourne market," he said. "If you forecast a lot of these projects hitting the market at one time that will create a sharp tick-up in vacancy and a sharp softening in leasing market conditions. "The big question is whether officebased business will expand at a similar growth rate to absorb that Build it but will they come?" The take-up of office space in Melbourne is strong, but it will struggle to keep pace with the sheer amount of space coming into the market. By 2022, Mr Cannington forecasts vacancy will rise to almost 9 per cent By then, Sydney's CBD vacancy will be around 5 per cent The numbers are staggering: 410,000 square metres of new office space is under construction currently in central Melbourne. "If you look at the demand side of the equation that's where the greatest risk is," Mr Cannington said. Even in the best case scenario, with strong economic growth Mr Cannington expects conditions to ease. "It's not recessionary carnage. It's just softening in conditions from a

96 Australian Financial Review, Australia Author: Nick Lenaghan Section: Property Article type : News Item Classification : National : 44,635 Page: 31 Printed Size: cm² Market: National Country: Australia ASR: AUD 17,496 Words: 1472 Item ID: Page 2 of 3 market that is currently pretty tight" Mr Cannington's view is the sanguine one, but he may not have factored in the "hipster effect" with next generation businesses preferring the city fringe, adding to Melbourne's innate capacity to spread its CBD further. The trend is under way already, with major property players already investing into major office towers well beyond the CBD itself. The Liberman family-ed Impact Investment Group is investing into a 13-storey office development in Collingwood through a $120 million fundthrough transaction. Nearby, Growthpoint Properties Australia announced plans last month to develop a two-tower project at a Richmond business park. Next to Richmond is Cremorne where employers such as Seek are pushing to get into a growing commercial district on the city fringe. Terry Rawnsley, from SGS Economics & Planning, has observed how commercial space is spreading beyond the traditional Hoddle grid, eastwards into Richmond, Collingwood and Cremorne and, he expects, soon into the Arden-Macaulay precinct just north of the CBD. They are the slightly edgier postcodes attracting the creative types, the hipsters and the IT sector, and will add a whole new layer to the office supply story. "They are the sort of people who would pay to be in Docklands or the Hoddle grid. But they are happy to spend good money to be outside the grid because it matches their brand a bit more." Investa's Michael Cook and David Cannington are weighing up impact of office supply in Melbourne, PHOTO: ARSINEH HOUSPIAN

97 Australian Financial Review, Australia Author: Nick Lenaghan Section: Property Article type : News Item Classification : National : 44,635 Page: 31 Printed Size: cm² Market: National Country: Australia ASR: AUD 17,496 Words: 1472 Item ID: Page 3 of 3 Skv's the limit Major property development projects in Melbourne's CBD f Project name Collins Arch Address Collins St Type Offices Value $1,000,000,000 Project name West Side Place Apts/Ri tz Cariton Hotel Stage 1 Address 250 Spencer St Type Units, townhouses Value $750,000,000 Project name The Olderfleet Building Redevelopment Address 477 Collins St Type Offices Value $750,000,000 O Project name Victoria Police HQ Address 311 Spencer St Type Gov't offices Value $600,000,000 Project name Australia 108 Address 70 Southbank Bvd, City Rd Type Units, townhouses Value $500,000,000 jf Project name 80 Collins St Commercial Dev Address Collins St & 1405 Benson Lane Type Hotel, serv appt Value $500,000,000 Project name Melbourne Square Dev Stage 1 Address Kavanagh St, Balston & Power Sts Type Units, townhouses Value $490,000,000 Project name Premier Tower Address Spencer St Type Hotel, serv appt Value $350,000,000 Project name Wesley Place Tower Address 130 Lonsdale St Type Offices Value $200,000,000 Project name Melbourne Park Redevelopment Stage 2 Address 70 Southbank Bvd, City Rd Type Pavilion, stadium Value $186,000,000 ffl Project name Southbank Place Address Kavanagh St Type Units, townhouses Value $170,000,000 Project name St Boulevard Apts Address St Kilda Rd Type Units, townhouses Value $150,000,000 { Project name Scape Development Address Franklin St Type Student accommodation Value $150,000,000 Project name Conservatory Apts Address 9-23 Mackenzie St Type Units, townhouses Value $120,000,000 Project name 271 Spring St Address 271 Spring St Type Offices Value $110,000,000 Project name Uni of Melb Music Conservatorium Address SturtSt Type Tertiary colleges, universities Value $105,500,1)00 Project name Collins House Address Collins St Type Units, townhouses Value $100,000,000 w Project name Blue Sky Student Accom Address La Trobe St,BellSt Type Student accom Value $90,100,000 Project name Opera Address 450 St Kilda Rd Type Units, townhouses Value $90,000,000 Project name State Library Redevelopment Address 328 Swanston St Type Library.archives Value $83,100,000 H> Project name The Peak Address La Trobe St & Bennetts Lane Type Units, townhouses Value $80,000,000 li Project name Moray St Serviced Appts Address Moray St Type Units, townhouses Value $80,000,000 Project name Little Lonsdale St Hotel Address Little Lonsdale St Type Hotel, serv appts Value $80,000,000 Project name The International Address HaigSt Type Units, townhouses Value $80,000,000 Project name Botanic Apts Address Coventry St Type Units, townhouses Value $75,000,000 SOURCE: CORELOGIC FINANCIAL REVIEW

Cairns Post, Cairns Author: Jeff Whalley Section: General News Article type : News Item Classification : Regional : 13,896 Page: 23 Printed Size: 228.

98 Cairns Post, Cairns Author: Jeff Whalley Section: General News Article type : News Item Classification : Regional : 13,896 Page: 23 Printed Size: cm² Market: QLD Country: Australia ASR: AUD 1,143 Words: 329 Item ID: Page 1 of 1 Bank bonuses cop flak NAB boss says minority did wrong thing JEFF WHALLEY NATIONAL Australia Bank chief Andrew Thorburn has conceded bonuses that were on offer to staff led to excessive risk-taking and the wrong behaviour. But Mr Thorburn says he believes the role of big bonuses in motivating staff has widely been overstated. Speaking at a business event in Melbourne yesterday, Mr Thorburn said workers often looked for more than just money as a motivator. People want encouragement. They want progression. They want to know they work for a company which makes a difference, he said. So money is part of it but it is much deeper. His comments come as the financial services royal commission continues to expose cases of banks and other finance companies selling products and services inappropriately. In a market system we need incentives, (but) they can be seriously overrated in terms of their motivational capability for most of the people working for us, Mr Thorburn said. He acknowledged there had been wrongdoing among NAB staff due to the bonus schemes. I think some of the incentive systems we ve had have encouraged the wrong behaviour they have encouraged excess and excessive risk-taking and we have not had good enough controls to prevent that, he said. We have to fix that. Many of the misconduct cases dissected at the royal commission involved staff cross-selling products and services touting them to people who were coming into branches or calling service centres for other reasons. Australian lenders have routinely been cross-selling services such as financial advice to banking customers under a model known as vertical integration. That model is now coming under pressure following the misconduct scandals that have engulfed the industry in recent years, culminating in the royal commission. NAB late last month changed the criteria for bonuses available to more than 4000 branch and call-centre staff, reducing the emphasis on financial targets. Yesterday, Mr Thorburn sought to defend his 30,000- strong workforce, saying a minority did the wrong thing.

Cairns Post, Cairns Author: Daniel Bateman Section: General News Article type : News Item Classification : Regional : 13,896 Page: 7 Printed Size: 213.

99 Cairns Post, Cairns Author: Daniel Bateman Section: General News Article type : News Item Classification : Regional : 13,896 Page: 7 Printed Size: cm² Market: QLD Country: Australia ASR: AUD 1,068 Words: 350 Item ID: Page 1 of 1 Banks failing remote clients DANIEL BATEMAN daniel.bateman@news.com.au A CAPE York woman was forced to fly nearly 800km to collect her replacement ATM card, a bank hearing has been told. A lack of understanding of indigenous culture has led to banks blocking some customers from their money, the Australian Securities and Investments Commission (ASIC) has told a public hearing in Darwin. The hearing was told identification issues among bank customers in remote and rural communities has emerged as a key problem within the nation s banking system. ASIC senior policy analyst Nathan Boyle told the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that Aboriginal and Torres Strait Islander people were being excluded from basic financial products, partly due to not meeting basic identification criteria. Mr Boyle said it could be quite difficult for indigenous Australians to verify their identities over the phone. Sometimes we see financial services have policies about the types of questions that are asked and they can only ask questions in a certain way which might not make any sense to an Aboriginal person in a remote community, he said. One that we come across quite regularly is they will be asked, what is your street address? And in a lot of remote communities, there aren t street names and the person will say I don t have a street address. He cited an example of a woman from Lockhart River who contacted ASIC needing assistance after she was unable to access her bank account. (She) had lost her bank card, had failed the identification processes and was then told to travel to Cairns to visit her local branch, he said. And it was during the wet season, so the only way that she could get to Cairns was to fly, which was quite expensive, and she was quite distressed when she contacted us. The hearing was told about poor financial literacy leading to indigenous people being ripped off by lenders, such as Channic Pty Ltd and Cash Brokers Pty Ltd. Last year, the Federal Court fined the Cairns based businesses more than $1 million for dealing unjustly with Yarrabah customers.

Mediaportal Report. News Headlines... News Headlines... MON 19 NOVEMBER 2018

Mediaportal Report. News Headlines... News Headlines... MON 19 NOVEMBER 2018 MON 19 NOVEMBER 2018 Mediaportal Report News Headlines... ABC Radio Sydney, Sydney, Breakfast, Wendy Harmer and Robbie Buck 19 Nov 2018 7:35 AM Duration: 0 min 58 secs ASR AUD 1,985 NSW Australia Industry