BANKS AND BANKING – AUSTRALIA

David Morgan reveals failed Westpac-CBA mega-merger

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Original article by Tony Boyd
The Australian Financial Review – Page: 1 & 2 : 20-Feb-19

The official biography of former Westpac CEO David Morgan outlines the bank’s proposed merger with the Commonwealth Bank of Australia in 1989, when he was the head of institutional banking at Westpac. The merger ultimately failed to proceed due to disagreement over leadership of the new entity. Westpac CEO Bob Joss was to have been overlooked in favour of CBA CEO David Murray, with Joss to be given the role of vice-chairman in charge of restructuring. CBA directors were also against Morgan and Westpac CFO Pat Handley joining the board of the combined group.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BT FINANCIAL GROUP PTY LTD, DBS BANK LIMITED, ST GEORGE BANK LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN LABOR PARTY, ACTU, MORGAN STANLEY AUSTRALIA LIMITED, JP MORGAN AUSTRALIA LIMITED

Westpac cops flak after flat quarterly post

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Original article by James Frost
The Australian Financial Review – Page: 15 & 18 : 19-Feb-19

Westpac has reported a statutory net profit of $1.95bn and a cash profit of $2.04bn for the December 2018 quarter. Both figures were largely unchanged from the two previous quarters. Westpac has also advised that its net interest margin rose during the quarter, while there was an increase in both secured and unsecured mortgage delinquencies. Meanwhile, the Australian Securities & Investments Commission will appeal a Federal Court ruling that a marketing campaign by Westpac’s BT arm between 2014 and 2016 did not breach its financial services licence.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, BT FINANCIAL GROUP PTY LTD, FEDERAL COURT OF AUSTRALIA, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

I’ll prove the royal commission wrong, Henry vows

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Original article by John Durie
The Australian – Page: 17 & 21 : 15-Feb-19

National Australia Bank is to follow the lead of Suncorp and set up a board committee that focuses on customers. NAB chairman Ken Henry says he did not intend to appear arrogant when he gave evidence at the royal commission. Henry says he feels that NAB is on the right path to restoring its tainted reputation, and that he intends to prove commissioner Kenneth Hayne wrong. Henry will step down when a replacement for CEO Andrew Thorburn is appointed.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

NAB the big loser from Hayne Royal Commission – most distrusted bank in Australia

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-Feb-19

Roy Morgan has been measuring bank trust and distrust since 2017 and recently conducted a survey in January before the release of the Hayne report, and another in February during the week following the report being made public. The Roy Morgan Net Trust Score Survey in January revealed CBA as the bank brand with the lowest level of trust and the highest level of distrust. However, in the wake of the Hayne report, NAB skyrocketed into the unenviable position as Australia’s least trusted and most distrusted bank brand. In January 36.9% of Australians distrusted NAB, but in the immediate wake of the report’s release the number of Australians distrusting NAB soared to 53.7%. Simultaneously, NAB’s level of trust plunged from 18.5% to 11.5%, delivering it the banking sector’s worst Net Trust Score of -42.2%, with the other three major brands in the minus twenties. Roy Morgan CEO Michele Levine says this is the highest level of distrust we have ever seen for a bank brand in Australia.

CORPORATES
ROY MORGAN LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Macquarie chief backs loan brokers

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Original article by Joyce Moullakis
The Australian – Page: 19 & 23 : 13-Feb-19

Macquarie Group has affirmed that it expects profit growth of around 15 per cent for fiscal 2019, which suggests a full-year profit of at least $3bn. Meanwhile, Macquarie has more than $24bn worth of capital reserves at present, but CEO Shemara Wikramanayake has stressed the need for discipline with regard to risk management in the current environment. She has also expressed support for the mortgage broking industry in the wake of the financial services royal commission.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CADENCE CAPITAL LIMITED – ASX CDT, JP MORGAN AUSTRALIA LIMITED, QUADRANT ENERGY PTY LTD, PROPERTY EXCHANGE AUSTRALIA, AUSTRALIAN LABOR PARTY

Henry should not pick new NAB chief: Costello

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 18 : 12-Feb-19

Former federal treasurer Peter Costello suggests that regulators’ failure to prosecute misconduct in the financial services sector was due to reluctance to enforce the law rather that funding constraints. Costello also believes that it is inappropriate for National Australia Bank chairman Ken Henry to oversee the appointment of a new CEO. Henry will step down after a successor to Andrew Thorburn is recruited. Costello adds that bank directors and executives must prioritise compliance with the law in the wake of the financial services royal commission.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC

Big agenda: Chronican has his work cut out for NAB revival

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Original article by Eric Johnston
The Australian – Page: 17 : 11-Feb-19

Anthony Healy and Mike Baird are said to be the leading internal candidates to succeed National Australia Bank CEO Andrew Thorburn, while external contenders could include Craig Drummond, Ross McEwan and Lyn Cobley. Acting CEO Philip Chronican stresses that NAB has a "very clear strategy" that is being well executed. He notes that the last week has been challenging for the bank, with the resignation of Thorburn and chairman Ken Henry and the release of the banking royal commission’s final report.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MEDIBANK PRIVATE LIMITED – ASX MPL, WESTPAC BANKING CORPORATION – ASX WBC, ST GEORGE BANK LIMITED

Big four back in favour for investors

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Original article by Scott Murdoch
The Australian – Page: 17 & 20 : 11-Feb-19

Australia’s banking index gained six per cent in the week ended 8 February, with the rally being attributed to renewed interest in the sector among international equity investors. Rahoul Chowdry of law firm Minter Ellison notes that sovereign risk concerns regarding Australian banks have abated following the release of the financial services royal commission’s final report. Mike Evans from the Bank of America Merrill Lynch and Marianne Birch of Macquarie Capital agree that the final report has created greater certainty for investors.

CORPORATES
MINTER ELLISON, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, MACQUARIE CAPITAL PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CITIGROUP PTY LTD

NAB in turmoil as duo exit

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Original article by Joyce Moullakis, Ben Butler
The Australian – Page: 1 & 4 : 8-Feb-19

Phil Chronican will become acting CEO of National Australia Bank after Andrew Thorburn advised that he will step down on 28 February. Chairman Ken Henry will also step down when a permanent CEO is appointed. Thorburn and Henry in particular had attracted criticism in the financial services royal commission’s final report over their reluctance to accept responsibility for the misconduct that was exposed by the inquiry. Some fund managers expect NAB to choose an external candidate to replace Thorburn, although Mike Baird and Anthony Healy are said to be among the internal contenders.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC, MEDIBANK PRIVATE LIMITED – ASX MPL, AMP LIMITED – ASX AMP, COMMONWEALTH AGRICULTURAL BUREAU INTERNATIONAL, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, THE HUMAN GROUP, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

Comyn confident about house prices

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Original article by Joyce Moullakis, Michael Roddan
The Australian – Page: 21 : 7-Feb-19

The Commonwealth Bank has posted a 2018-19 interim cash profit of $4.77bn, which is 2.1 per cent lower than previously. Mortgage and business lending rose by four per cent and five per cent respectively during the half-year, while lending margins were affected by factors such as increased competition and rising funding costs. Meanwhile, CEO Matt Comyn forecasts that growth in housing credit will slow in 2019, although he does not anticipate a sharp decline in house prices.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD, UBS HOLDINGS PTY LTD