K62 Finance

JPMorgan helped identify cartel bankers

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Original article by Pamela Williams
The Australian Financial Review – Page: 1 & 8 : 6-Dec-19

The Australian Competition & Consumer Commission is taking criminal cartel action against the ANZ Bank, Citigroup and Deutsche Bank, as well as six of their executives. The ACCC’s action relates to a $2.5 billion capital raising by ANZ, with the ACCC alleging that bankers from the three companies conspired to restrict the supply of or maintain the price of ANZ shares following the capital raising. Former JP Morgan executive Richard Galvin has told the New South Wales Local Court that he had listened to covert phone recordings to help the ACCC identify bankers on the calls.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIGROUP PTY LTD, DEUTSCHE BANK AG, JP MORGAN AUSTRALIA LIMITED, LOCAL COURT OF NEW SOUTH WALES

Banks boosted as Kiwis cave in

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Original article by Richard Gluyas
The Australian – Page: 17 & 21 : 6-Dec-19

The Reserve Bank of New Zealand will require the local subsidiaries of Australia’s four major banks to hold tier one capital that is equivalent to at least 16 per cent of their risk-weighted assets. They will also be required to hold total capital of 18 per cent, of which 13.5 per cent will have to be common equity tier one capital. However, the new rules will be implemented over a seven-year period, rather than the five-year time-frame that was initially proposed.

CORPORATES
RESERVE BANK OF NEW ZEALAND, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UBS HOLDINGS PTY LTD, S&P GLOBAL RATINGS

Retail investors turn on director Marriott

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 17 : 5-Dec-19

Westpac’s money-laundering scandal is set to dominate its AGM on 12 December. The Australian Shareholders’ Association has signalled its intention to vote against the remuneration report and the re-election of Westpac director Peter Marriott. However, it will support the re-election of Nerida Caesar, Steve Harker and Margaret Seale. The Australian Council of Superannuation Investors has indicated that it will vote in favour of Marriott’s re-election. Some 64.2 per cent of votes cast at Westpac’s 2018 AGM rejected its remuneration report.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, LEGG MASON ASSET MANAGEMENT AUSTRALIA LIMITED, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED

Banks braced for RBNZ’s capital D-Day

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Original article by James Eyers
The Australian Financial Review – Page: 13 & 16 : 5-Dec-19

The Reserve Bank of New Zealand will announce its new tier-1 capital requirements for Australian banks’ NZ subsidiaries on 5 December. Cameron Bagrie from Bagrie Economics expects the central bank to push ahead with its previously flagged plan to increase minimum capital ratios to 16 per cent, despite warnings from banks that this is excessive. It is estimated that Australian banks would need to hold about $18bn worth of additional capital in New Zealand, which may reduce both their profits and dividends in Australia.

CORPORATES
RESERVE BANK OF NEW ZEALAND, BAGRIE ECONOMICS, EVANS AND PARTNERS PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NEW ZEALAND BANKERS’ ASSOCIATION

Westpac told of payments weeks ago

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Original article by Michael Roddan, Bridget Carter
The Australian – Page: 17 & 21 : 29-Nov-19

Westpac has claimed that it was not aware of Austrac’s allegations regarding payments linked to child exploitation until 20 November, when the scandal was exposed. However, Austrac’s statement of claim shows that it specifically requested information from Westpac about such payments at least six weeks earlier. Meanwhile, Westpac has advised that it will allow retail investors to withdraw from a share purchase plan that was announced a week before Austrac filed civil proceedings against the bank.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, CLIME CAPITAL LIMITED – ASX CAM

ACSI backs director resolutions

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Original article by Andrew White
The Australian – Page: 21 : 29-Nov-19

The Australian Council of Superannuation Investors will back the re-election of four Westpac directors at the bank’s upcoming annual meeting. ACSI chair Louise Davidson says it would have voted differently if Westpac CEO Brian Hartzer had remained at the helm and chairman Lindsay Maxsted had not agreed to bring forward his retirement. Davidson adds that Maxsted’s successor will need to ensure that Westpac’s board has the right mix of skills to prevent another money-laundering scandal.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, FEDERAL COURT OF AUSTRALIA

Economists push out QE timing after Lowe speech

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Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 28-Nov-19

Westpac’s chief economist Bill Evans now expects the Reserve Bank of Australia to pursue quantitative easing in June 2020, having previously forecast that it would commence a bond-buying program in February. Other economists have also revised their timetables for QE after RBA governor Philip Lowe signalled that this option is unlikely to be pursued unless the cash rate falls to 0.25 per cent. Citigroup’s Josh Williamson has ruled out any move to QE in 2020.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, CITIGROUP PTY LTD, HSBC AUSTRALIA HOLDINGS PTY LTD

Westpac papers reveal trail of human, IT failure

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Original article by Aaron Patrick
The Australian Financial Review – Page: 1 & 4 : 28-Nov-19

Westpac’s confidential disclosures to Austrac show that it breached anti-money laundering and counter-terrorism financing laws some 29 million times. Austrac has accused the major bank of 23 million breaches, and the additional breaches cannot be prosecuted as they fall outside the statute of limitations. The documents also show that international money transfers with seven global banks had not been reported since 2011, due to problems with a computer system upgrade that began in 2010. However, Westpac did not become aware of the problem until May 2017, and it was not reported to Austrac until August 2018.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

The Westpac money laundering scandal – Australia’s largest case of moral blindness?

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Original article by Michele Levine, CEO, Roy Morgan
Corporate Governance Update – Page: Online : 27-Nov-19

Before its money laundering scandal, Westpac was the ‘least distrusted’ of the big-four banks. That is about to change. In the immediate wake of Westpac being accused by the regulator of breaching anti-money laundering laws 23 million times, the question is, how could there be such a comprehensive failure of governance? Shareholders, employees, customers – and ultimately the courts – all want to know what went wrong. Was it intentional or did the breaches go unnoticed? Chances are we have witnessed corporate Australia’s largest case of moral blindness. On the march to prosperity following the GFC, many C-Suite executives and company directors felt liberated from the shackles of ethics, freed and legitimated by the need to rebuild shareholder value. Moral blindness, it seems, was sanctioned by this ‘prosperity imperative’. A decade later the Financial Services Royal Commission exposed moral blindness across the sector. Possibly the most spectacular revelation was the moral blindness exhibited by the then AMP Chair and CEO. Now it’s Westpac’s turn in the moral blindness spotlight. If any good is to come of the Westpac scandal it is the recognition that every corporate board needs an Ethics Committee to combat intentional wrongdoing. And moral blindness.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

‘QE will do nothing’: fundies back infrastructure spending

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Original article by Robert Guy
The Australian Financial Review – Page: 28 : 27-Nov-19

Quay Global Investors portfolio manager Chris Bedingfield contends that the Reserve Bank of Australia should not implement quantitative easing. He argues that the federal government should instead prioritise increased spending on infrastructure, noting that this will create jobs in the short-term and boost productivity in the long-term. Sarah Shaw of 4D Infrastructure also advocates investing in infrastructure to stimulate the economy.

CORPORATES
QUAY GLOBAL INVESTORS PTY LTD, 4D INFRASTRUCTURE PTY LTD, RESERVE BANK OF AUSTRALIA, BENNELONG FUNDS MANAGEMENT PTY LTD