K62 Finance

Private equity buyers focused on health, leisure, tech assets

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 16 : 14-Nov-16

A new report from law firm Minter Ellison notes that there has been an increase in deal-making activity by private equity firms. Sectors such as health, technology, leisure and child care are tipped to attract strong interest from buyout firms. However, Minter Ellison partner Glen Sauer says it is too soon to forecast the impact that Donald Trump’s presidency will have on the private equity sector’s investment in Australia.

CORPORATES
MINTER ELLISONJP MORGAN AUSTRALIA LIMITEDSAI GLOBAL LIMITED – ASX SAIBARING ASIA PRIVATE EQUITYGENESIS CARE PTY LTDMACQUARIE GROUP LIMITED – ASX MQGCHINA RESOURCES (HOLDINGS) LIMITEDKKR AND COMPANY LPCITIGROUP PTY LTDDEALOGIC (AUSTRALIA) PTY LTDDICK SMITH HOLDINGS LIMITEDSPOTLESS GROUP HOLDINGS LIMITED – ASX SPOESTIA HEALTH LIMITED – ASX EHEVITACO HOLDINGS LIMITED – ASX VITPATTIES FOODS LIMITEDSHANGHAI PHARMACEUTICAL HOLDING COMPANY LIMITEDPRIMAVERA CAPITAL GROUPPACIFIC EQUITY PARTNERS PTY LTD

Buck doesn’t stop with top execs

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Original article by Richard Gluyas
The Australian – Page: 25 : 11-Nov-16

When the CEOs of Australia’s four major banks appeared before an economics committee in October 2016 they revealed that no senior executives have been sacked over scandals that have plagued the sector. National Australia Bank has sacked 43 financial planners, while Westpac has sacked 139 of the 885 employees it has investigated for potential breaches of its code of conduct. Meanwhile, just 16 of the employees that have been dismissed by the Commonwealth Bank were executive managers.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMINSURE, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, FINANCE AND PUBLIC ADMINISTRATION, LIBERAL PARTY OF AUSTRALIA

CBA pay revolt triggers first strike at AGM

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Original article by James Eyers, Julie-anne Sprague
The Australian Financial Review – Page: 2 : 10-Nov-16

At the Commonwealth Bank of Australia’s AGM in Perth on 9 November 2016, the bank received a "first strike" when 49 per cent of votes and proxies rejected the remuneration report. Shareholders objected to the introduction of performance measures that would be difficult to measure and quantify. The meeting was disrupted by environmentalists who chanted a slogan "Act on climate, CommBank can".

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, AUSTRALIAN YOUTH CLIMATE CHANGE COALITION LIMITED

Banks stare at low growth as pressures rise

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Original article by James Eyers
The Australian Financial Review – Page: 15 & 19 : 9-Nov-16

The combined cash earnings of Australia’s four major banks fell by 2.5 per cent in 2015-6, to $A29.6bn. They recorded net interest income growth of 5.5 per cent, to $A60.3bn, but non-interest income was down 3.1 per cent at $A23.5bn. Michael Rowland of KPMG says the banks are facing a number of headwinds, including the prospect of lower growth in revenue and return on equity, growing competition and an increase in regulatory costs.

CORPORATES
KPMG AUSTRALIA PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, PM CAPITAL LIMITED, ERNST AND YOUNG

Westpac returns hit by need to build capital

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Original article by James Eyers
The Australian Financial Review – Page: 11 & 15 : 8-Nov-16

Westpac has posted a 2015-16 cash profit of $A7.8bn. Its return on equity fell by 1.85 per cent to 14 per cent in the year to 30 September 2016, and its ROE target has been scaled back from 15 per cent to 13-14 per cent due to factors such as new capital requirements for the banking sector. PwC estimates that the combined ROE of the four major banks fell by 127 basis points to 13.75 per cent in 2015-16. Meanwhile, Westpac will seek to reduce its cost-to-income ratio from 42 per cent at present to less than 40 per cent

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, CITIGROUP PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, KPMG AUSTRALIA PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

ANZ shrinks to reduce rising risks

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Original article by James Eyers
The Australian Financial Review – Page: 1 : 4-Nov-16

The ANZ Bank has announced a fall of 18 per cent in cash profit to $A5.9 billion for 2015-16. Return on equity fell to 12.2 per cent, from 13.8 per cent a year ago. The cost to income ratio for the year declined to 44.8 per cent. ANZ CEO Shayne Elliott said the bank reduced its workforce by 3,600 jobs over the year to 30 September 2016. The stock rose 0.6 per cent to $A27.35 on 3 November 2016.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

RBA likely to cut again but not in a hurry

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Original article by Jessica Sier
The Australian Financial Review – Page: 35 : 3-Nov-16

Financial markets now consider that there is an eight per cent chance that the Reserve Bank of Australia will reduce official interest rates in December 2016. However, there is now seen to be a 36 per cent change that rates will be cut by May 2017. Michael Blythe of the Commonwealth Bank anticipates another rate cut during the June quarter, while Paul Dales of Capital Economics says there is potential for the next change in monetary policy to be an increase in the cash rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CAPITAL ECONOMICS LIMITED

ANZ’s Whelan will divest Asian bank stakes next

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Original article by Lisa Murray
The Australian Financial Review – Page: 13 & 17 : 2-Nov-16

The ANZ Bank will further scale back its presence in Asia after securing a deal to offload some of its retail banking and wealth management assets in the region. Mark Whelan, the head of institutional banking, says ANZ is making progress on selling some of its minority stakes in four Asian banks. He says these stakes are deemed to be non-core assets, but he stresses that ANZ is "reshaping" its Asian operations rather than withdrawing from the region. ANZ CEO Shayne Elliott has signalled that institutional banking will be the focus of its Asian operations.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, SHANGHAI RURAL COMMERCIAL BANK, BANK OF TIANJIN COMPANY LIMITED, PT BANK PAN INDONESIA TBK, AMMB HOLDINGS BHD, DBS BANK LIMITED

Banks on S&P negative watch over hot property

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 11 & 15 : 1-Nov-16

Factors such as rising household debt and residential property prices have prompted Standard & Poor’s to downgrade Australia’s economic risk trends. The firm has also downgraded the credit rating outlook of 25 local lenders to "negative". S&P downgraded the major banks’ rating outlooks to "negative" in mid-2016, but it has not yet made any further changes. However, their "AA-" credit ratings could be reviewed, particularly if Australia implements new global regulations regarding bank bailouts.

CORPORATES
STANDARD AND POOR’S CORPORATION, MACQUARIE BANK LIMITED – ASX MBL, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, RESERVE BANK OF AUSTRALIA

ANZ cuts back Asian footprint

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Original article by Michael Bennet
The Australian – Page: 21 & 24 : 1-Nov-16

CEO Shayne Elliot says the ANZ Bank will eventually offload more of its retail banking operations in Asia, after striking a deal to sell its retail and wealth assets in Hong Kong, Singapore, China, Taiwan and Indonesia. ANZ has not revealed the price of the transaction, although it says Singapore-based DBS Bank will pay $A110m more than the book value of the assets. ANZ will incur a $A265m net loss on the transaction, while it will also slightly affect its earnings per share and return on equity. ANZ expanded its presence in Asia under previous CEO Mike Smith.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DBS BANK LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG