Australia’s major banks raise rates, Flight Centre reopens 35 stores and Perpetual rejects $1.7b takeover

Australia’s four major banks, Commonwealth Bank (ASX: CBA), National Australia Bank (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ), and Westpac (ASX: WBC) have announced increases to home loan rates by 25 basis points this month.

The move follows the Reserve Bank of Australia’s hike, seventh in as many months, which raised the benchmark lending rate by 25 basis points to a nine-year high of 2.85%.

RBA governor Philip Lowe also warned it wouldn’t be the last interest rate rise.

“This has been necessary to establish a more sustainable balance of demand and supply in the Australian economy to help return inflation to target,” he said.

“The board expects to increase interest rates further over the period ahead. It is closely monitoring the global economy, household spending and wage and price-setting behaviour.”

Commonwealth Bank, NAB and ANZ said their new rates will be effective from 11 November, while Westpac said it’s rate rise will come into play from 15 November.

Commonwealth Bank group executive for retail banking Angus Sullivan acknowledged the cost-of-living pressures impacting consumers – saying the bank is looking for ways to help alleviate the stresses.

“We understand the rapidly changing rate environment may raise questions for some of our customers and we are here to help them,” he said.

One of the options the bank is considering is launching a hub to help customers keep track of savings, spending, bills, and with new home loan features.

Flight Centre

Flight Centre Travel Group (ASX: FLT) revealed this week it is reopening 35 stores across the nation as travel demand continues to surge following a long period of decline due to the pandemic.

The store reopenings are expected to boost for employment as vacancies are filled. The 35 reopened store will contribute to a total 338 Flight Centre agencies throughout Australia.

Flight Centre Australia general manager Brent Novak said the company is particularly delighted to be reopening stores.

“While we continue to enhance our online booking experience for customers, we know how vital it is to have real people in real buildings providing expert customer service with a human touch,” he said.

“For many people, that’s their number one reason for coming back to us.”

Mr Novak said it would benefit people in rural areas, who have seen banking and telecommunications branches shut down recently, as Flight Centre advised its “committed to enhancing all our customer channels because we recognise no two customers are the same in terms of how they like to book travel.”

Flight Centre continues to make strides in its recovery from the pandemic as, two months ago, the group posted a $183.1 million loss for FY2022 — a vast improvement on the $337.8 million result in FY2021.

The result was driven by rapid global sales after governments eased international and domestic travel restrictions.

Perpetual

One of Australia’s oldest asset managers Perpetual (ASX: PPT) has rejected a $1.745 billion cash takeover deal from a consortium involving Regal Partners (ASX: RPL) and a subsidiary of BPEA EQT.

Perpetual said the deal “materially undervalues” the company.

However, Regal said the deal was “superior” to Perpetual’s proposed $2.5 billion takeover offer for Pendal, which Perpetual will continue its pursuit of.

Regal Partners chief executive officer and managing director Brendan O’Connor said the deal was an exciting opportunity for shareholders.

“We believe the proposal we have submitted is compelling for Perpetual shareholders, and importantly, is more attractive than maintaining the status quo and proceeding with the proposed acquisition of Pendal,” he said.

However, Perpetual confirmed its sights were firmly set on the deal with Pendal.

“This offer is uncertain and conditional, and the Perpetual board believes that it is not in the best interests of its shareholders to engage on this offer and has therefore rejected the offer,” it stated.

“Perpetual is committed to progressing its acquisition of Pendal, which was announced to shareholders on 25 August 2022.”

A2 Milk

A2 Milk (ASX: A2M) has been granted temporary access to sell its a2 Platinum infant formula in the United States, as the country continues to deal with a significant shortage in baby formula.

The shortage eventuated when, in February, Abbott Nutrition’s plant was closed due to a contamination scare.

A2 Milk had previously missed out on the chance fulfil the shortage, despite rivals such as Bubs Australia (ASX: BUB) being given the green light, but the New Zealand-based company was finally granted approval after the US Food and Drug Administration ran another review of its request to ship tins.

The FDA announced A2 Milk would be able to export its a2 Platinum 0-6 months and 6 to 12-months range to the US.

“Both products will be sold at major US retail outlets,” it said.

A2 Milk chief executive David Bortolussi said the company has approval until 6 January 2023 to sell the approved products.

New Hope Corp

Diversified energy giant New Hope Corp (ASX: NHC) will buy back up to $300 million worth of ordinary shares on-market, after saying its current share price did not accurately reflect the value of its assets.

New Hope’s buyback, which will start on 17 November and be completed within 12 months, aims to enhance the value of its shares.

The energy giant recently posted record earnings of $1.57 billion for the full year ended 31 July, 2022.

New Hope chairman Robert Milner said the company expects to carry the momentum on moving forward.

“The company expects its strong cash generation to continue as demand for high-energy and lower-emission thermal coal outstrips ongoing tight supply,” he said.

“We believe that the buy-back will benefit all our shareholders as it will reduce the number of shares on issue, thereby supporting the company’s return on equity, earnings per share and dividend per share, for all shareholders who continue to hold shares in New Hope Corporation.”