Insolvencies drop 19%; Woolies told to stop using the word ‘banking’: Midday Roundup

Insolvencies drop 19%; Woolies told to stop using the word ‘banking’: Midday Roundup

The number of companies collapsing in Australia has fallen by 19% since the start of the financial year.

The Australian Securities and Investments Commission has said insolvencies have broken a long-term trend, with the number of companies entering administration dropping compared with company incorporations, according to Fairfax.

But it wasn’t good news for all, with the construction and personal service industries hit hard with collapses.

Construction companies’ insolvencies only dropped 7%, while personal services such as hairdressers and beauty business insolvencies were actually on the rise.

The majority of these collapsed personal services were SMEs.

Woolies told to stop using the word “banking”

Woolworths has been told by regulators to stop using the word “banking” when marketing its financial services, reports Fairfax.

The supermarket giant has attracted the attention of the Australian Prudential Regulations Authority, after labelling its credit card business as a banking service in online advertisements.

Companies must hold a banking license from APRA in order to use the words “bank”, “banker”, or “banking” to describe their services.

A spokesperson for Woolworths told Fairfax the company realised it has made a mistake.

“We acknowledge we were using the wrong term and this will be rectified,” the spokesperson said.

Shares up on open

Aussie shares have opened higher this morning, despite a fall on Wall Street overnight.

The S&P/ASX200 benchmark was up 11 points, or 0.2%, to 5587.7 points at 12.19pm AEST. On Wednesday, the Dow Jones closed 26.91 points lower, down 0.16% to 17086.6 points.


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