BANKS AND BANKING – AUSTRALIA

Disclosing pay cuts scares off executives

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Original article by Ben Butler
The Australian – Page: 13 & 14 : 2-Jan-19

It has been revealed that ANZ Bank CEO Shayne Elliott warned that people may be deterred from taking up executive roles in the sector if banks are required to reveal the reasons why executives’ pay has been reduced. Elliott expressed concern about the issue in a letter to financial services royal commissioner Kenneth Hayne in early December. Elliott himself has had his remuneration reduced by $950,000 in the current financial year.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, IOOF HOLDINGS LIMITED – ASX IFL

Super boss says NAB vote puts all boards to the test

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Original article by Richard Gluyas
The Australian – Page: 15 & 19 : 21-Dec-18

AustralianSuper CEO Ian Silk says the resounding rejection of National Australia Bank’s remuneration report shows that shareholders expect executives to be subject to long-term performance targets. NAB, Westpac and ANZ incurred large protest votes under the "two strikes" regime at their 2018 AGMs, prompting them to commit to reviewing their remuneration schemes. NAB chairman Ken Henry has acknowledged that the bank’s single variable pay structure is problematic and may need to be revised.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIANSUPER PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, OWNERSHIP MATTERS PTY LTD

NAB reels from exec pay revolt

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Original article by Richard Gluyas
The Australian – Page: 13 & 16 : 20-Dec-18

National Australia Bank’s remuneration report was rejected by a record 88.4 per cent of shareholders at its AGM on 19 December, while 64.1 per cent also opposed a reward shares package for CEO Andrew Thorburn. Chairman Ken Henry told shareholders that NAB will review its remuneration scheme and expressed confidence that Thorburn will remain at the helm to oversee the final two years of the bank’s restructuring program. ANZ Bank also face a board spill in 2019 after 33.8 per cent of shareholders voted against its remuneration report.

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

NAB insists its breaches were not criminal acts

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Original article by Ben Butler
The Australian – Page: 13 & 18 : 19-Dec-18

National Australia Bank has conceded that its MLC Nominees subsidiary had breached the Corporations Act and the Australian Securities and Investments Commission Act. The breaches related to so-called plan service fees that the superannuation trustee company had imposed on customers despite not providing any services. NAB has acknowledged in court filings that MLC Nominees’ actions constituted misleading or deceptive conduct. The Australian Securities & Investments Commission launched legal action against NAB in September.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC NOMINEES, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA, NULIS NOMINEES AUSTRALIA LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Thorburn to take two long breaks

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Original article by Jonathan Shapiro, Misa Han
The Australian Financial Review – Page: 14 : 18-Dec-18

National Australia Bank has advised that CFO Gary Lennon will become acting CEO while Andrew Thorburn is on extended leave. Thorburn will go on annual leave after NAB’s upcoming AGM, but he will return to work before the final report of the financial services royal commission is released on 1 February. He will subsequently go on long service leave for a month. Thorburn says the two breaks will allow him to "reflect and recharge". It has been a challenging year for the banking sector, and NAB in particular.

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

Dwyer faces opposition to re-election

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Original article by Richard Gluyas
The Australian – Page: 15 : 17-Dec-18

Proxy firms Ownership Matters and ISS are opposing Paula Dwyer’s re-election to the ANZ board at its AGM on 19 December. They cite her heavy workload as chair of Tabcorp and Healthscope as their reasoning behind their objection. ANZ and National Australia Bank will hold their AGMs on the same day, with NAB’s remuneration report almost certain to attract a "first strike", although it is uncertain as to whether ANZ’s report will suffer the same fate.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, OWNERSHIP MATTERS PTY LTD, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, TABCORP HOLDINGS LIMITED – ASX TAH, HEALTHSCOPE LIMITED – ASX HSO, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

NAB faces even bigger remuneration strike

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Original article by James Thomson
The Australian Financial Review – Page: 31 : 14-Dec-18

Investors who account for more than 213 million shares in Westpac abstained from voting on the bank’s remuneration report at its 2018 AGM. Had these shares been voted, the proportion of votes cast that rejected the report could have been much higher than the 63 per cent that was recorded. Meanwhile, there is speculation that the "no" vote at National Australia Bank’s AGM could be at least 70 per cent. Key issues for shareholders are likely to be the bonus received by former executive Andrew Hagger and NAB’s decision to move chairman Ken Henry to a single variable pay structure.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, TELSTRA CORPORATION LIMITED – ASX TLS

Westpac first to feel wrath of investors

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Original article by Joyce Moullakis, Paul Gardiner
The Australian – Page: 17 & 21 : 13-Dec-18

Westpac’s remuneration report was rejected by 64.2 per cent of shareholders at its AGM on 12 December, the largest "no" vote against a top-20 stock since the "two-strikes" rule was introduced in 2011. Westpac chairman Lindsay Maxsted has acknowledged investors’ angst and says the bank will consider the issues raised at the AGM. Argo Investments CEO Jason Beddow also expects National Australia Bank and the ANZ Bank to experience a big protest vote at their upcoming AGMs, although he adds that it is uncertain whether this will lead to a significant change in remuneration policies.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, ARGO INVESTMENTS LIMITED – ASX ARG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AMP LIMITED – ASX AMP, TELSTRA CORPORATION LIMITED – ASX TLS

CBA adds to banks’ $1bn bill

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Original article by Joyce Moullakis
The Australian – Page: 17 & 24 : 12-Dec-18

The Commonwealth Bank of Australia has advised that its 2018-19 interim financial results will include an extra $300m in provisions associated with compliance and remediation programs. CBA also announced a provision of $55m for transaction and separation costs regarding the sale of its life insurance business. The bank had previously disclosed a provision of $270m in relation to the ‘fee-for-no-service’ scandal. Australia’s four major banks have now incurred some $1.4bn worth of compensation and compliance costs in the wake of the financial services royal commission.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMINSURE LIFE, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MORGAN STANLEY AUSTRALIA LIMITED, SHAW AND PARTNERS LIMITED

ACCC hits big banks, ports, tech

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Original article by James Frost
The Australian Financial Review – Page: 1 & 8 : 11-Dec-18

The Australian Competition & Consumer Commission has concluded that the nation’s four major banks engaged in "synchronised pricing" with regard to increases in interest-only home loan interest rates in June 2017. The big four banks raised their interest rates following the Australian Prudential Regulation Authority’s decision in mid-March to cap interest-only loans at 30 per cent of all new loans from the September quarter. The ACCC estimates that the rate rises boosted the banks’ profits by around $1.1bn.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. PRODUCTIVITY COMMISSION, RESERVE BANK OF AUSTRALIA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY