K: Financial and Insurance Services

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

Westpac’s Austrac scandal differs from other institutions

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Original article by Robert Gottliebsen
The Australian – Page: 29 : 26-Nov-19

Westpac’s scandal is completely different to scandals that cost the jobs of top executives at the Commonwealth Bank, National Australia Bank and AMP in recent years. Westpac chairman Lindsay Maxsted says that the board had no prior warning of Austrac’s legal action or the specific nature of its allegations. However, Austrac alleges that Westpac was aware of concerns about payments linked to child exploitation as far back as 2013. The question arises as to whether CEO Brian Hartzer was aware of these concerns and withheld this from the board.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP LIMITED – ASX AMP

Investors demand action by Westpac

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Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 26-Nov-19

Nathan Parkin of Ethical Partners Funds Management contends that some at a high level at Westpac needs to be held accountable for the financial penalties that will arise from its massive breach of anti-money laundering laws. Meanwhile, one of Westpac’s 20 largest shareholders believes that CEO Brian Hartzer will not be to able to remain at the helm in the wake of the scandal. Westpac’s share price has fallen by 8.8 per cent since the scandal was revealed.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, ETHICAL PARTNERS FUNDS MANAGEMENT PTY LTD, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, PLATO INVESTMENT MANAGEMENT LIMITED, OWNERSHIP MATTERS PTY LTD, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, NORGES BANK INVESTMENT MANAGEMENT, BLACKROCK INCORPORATED, THE VANGUARD GROUP INCORPORATED

Local bourse is ready to test record highs

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Original article by David Rogers
The Australian – Page: 28 : 26-Nov-19

The benchmark S&P/ASX 200 index has gained 19 per cent so in 2019, and it is just two per cent shy of the record high of 6,875.5 points in late July. A number of factors could see the local bourse reach a new peak, including a resolution to the US-China trade war and the potential for policy stimulus in December’s mid-year fiscal and economic outlook. However, the federal government is unlikely to pursue stimulus measures before the May 2020 Budget, as it continues to focus on a surplus.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD

Stay calm, this is no Enron

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Original article by Peter Van Onselen, Michael Roddan
The Australian – Page: 1 & 2 : 26-Nov-19

Westpac CEO Brian Hartzer has told his executive team that there is no need to "overcook" the money-laundering and child exploitation scandal that has embroiled the bank. He has argued that it is not a major issue for "people in mainstream Australia". Sources have also indicated that Hartzer has told executives to focus on issues such as lifting Westpac’s net promoter score and writing more home loans. He is also said to have downplayed any comparisons to Enron and Lehman Brothers.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF HOME AFFAIRS, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MOODY’S INVESTORS SERVICE INCORPORATED, VICTORIA. DEPT OF TREASURY AND FINANCE

Westpac must start hunt for a new CEO

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Original article by Terry McCrann
Herald Sun – Page: 35 : 21-Nov-19

It is inevitable that Westpac CEO Brian Hartzer will have to step down in the wake of the banking sector’s latest money laundering scandal. This will leave ANZ’s Shayne Elliott as the only CEO of a big four bank who was appointed prior to the Hayne royal commission. The only issue for Westpac’s board is whether to opt for an internal or external successor. Meanwhile, questions need to be asked about the failure of Austrac to ensure that Westpac and the Commonwealth Bank were complying with anti-money laundering laws.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB