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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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NAB's bad debt move spooks analysts

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THE future earnings growth of the big four Australian banks is under question, with fears they will be hit by the economic slowdown forecast by NAB.

Analysts yesterday began to downgrade NAB, Australia's fourth-largest bank, after it last week announced an "economic-cycle adjustment" of $250 million to cover a likely spike in bad debts.

Goldman Sachs analysts cut their recommendation on NAB to "neutral", effectively a hold call. Credit Suisse analysts reduced their NAB earnings guidance by up to 3 per cent for this year, while Citi sliced its estimates for next year by 1 per cent.

NAB will release its full-year earnings next week and analysts expect a $4.3 billion bottom line.

In a surprise move, Goldman Sachs and Macquarie cut their recommendations on Westpac, putting a "sell" call on the nation's second-largest lender.

 

Goldman Sachs analyst Ben Koo said Westpac's performance was likely to lag behind the rest of the sector. "Despite Westpac having strong provision coverage and capital position, the stock now looks expensive and offers a total return at the low end of our coverage," Mr Koo said.

"Bank dividends are in line with their historical average yield premium to industrial dividends.

"The looser financial conditions are also likely to provide greater growth options elsewhere given the banks' funding constraints on revenue growth."

Macquarie analyst Michael Wiblin said NAB's provisional increase was a warning shot and bad debts at the other major banks could start to increase in the event of an economic slowdown.

A recent Macquarie and East & Partners study showed NAB and Westpac had the highest exposure to the resources states of Western Australia and Queensland, which could leave them at greater risk if a broader economic slowdown occurred.

"The report also highlighted that NAB and Westpac have seen the fastest growth and biggest gearing change in the mining and energy states," said Mr Wiblin, who added that CBA was best placed to ride out an economic slowdown.

The big four were sold off yesterday, contributing to the S&P/ASX200's broader decline.

NAB and Westpac led the financial sector lower as the banks lost 0.7 per cent. CBA was down 0.32 per cent and ANZ shed 0.04 per cent.

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Guest Sunday, 23 February 2020