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What the analysts say: Higher liquidity has its price

Efforts by regulators to take risk out of the banking system can have unintended consequences. The requirement for banks to hold more liquid assets is designed to ensure that they can ride out market disruptions but may also have the effect making banks more sensitive to market volatility. In a ... More
By John Kavanagh Published on Monday, 14 November, 2011 Filed under results

Armaguard chases ATM cash

Linfox Armaguard is the company in talks to launch a takeover bid for Customers Limited, the largest operator of automatic teller machines in Australia. Media speculation about an offer for the ASX-listed Customers first surfaced in May. Speculation then was that the offer came from a private ... More
By Ian Rogers Published on Monday, 14 November, 2011 Filed under Customers Limited, small institutions

Cost of funds headaches worsen for banks

Getting a read on the Australian effects of the European-induced stress to credit markets can be difficult. Banks by and large have sold little debt offshore since markets become much more complicated in August. And other pricing indicators, such as credit default swaps, leave a lot to be ... More
By Ian Rogers and John Kavanagh Published on Monday, 14 November, 2011 Filed under funding, ANZ

Floods dampens sales rather than repayments at Suncorp

This year's Queensland floods are mostly hindering Suncorp's banking business by robbing it of opportunities for new business, rather than by causing borrowers to miss payments. As a result, the bank has elected to release A$20 million of a $25 million provision against losses from the floods ... More
By Ian Rogers Published on Monday, 14 November, 2011 Filed under Suncorp, asset quality

CBA takes new view on Asia

Commonwealth Bank last week provided an alternative view of the profits the group earns in Asia. According to the bank's full-year financial statements, CBA made a cash net profit from its direct investments in banks and fund managers in Asia of A$53 million in the year to June 2011. The bank's ... More
By Ian Rogers Published on Monday, 14 November, 2011 Filed under CBA, results

The strengthening case to dump bank execs' bonuses

Bad PR is now so common in the banking industry that no one even flinched when Commonwealth Bank got another dose of it this week. But the CBA board's actions over executive bonuses, approved by shareholders at last week's AGM, have set the banking industry up for years of being laughed at ... More
By David Walker Published on Monday, 14 November, 2011 Filed under CBA, shareholder oversight

Banks committed to DRPs

Leading bank chief financial officers have committed their organisations to maintaining dividend reinvestment plans, despite criticism from some quarters. DRPs are popular with private investors but not so warmly received by institutional shareholders. Banks' management of their dividend ... More
By John Kavanagh Published on Monday, 14 November, 2011 Filed under ANZ, NAB, Westpac, investor returns

IPO watch: Genworth listing for 2012

Mortgage insurer Genworth Financial plans to sell up to 40 per cent of the equity in its Australian business through a listing on the Australian Securities Exchange next year. The US-based insurer announced the plan on Friday. Genworth is the larger of the two firms that dominate the mortgage ... More
By Ian Rogers Published on Monday, 7 November, 2011 Filed under Genworth, initial public offering, IPO

What the analysts are saying: little upside for banks in the year ahead

Banking sector analysts have highlighted disappointing second-half results in their wrap-ups of the big banks' 2010/11 financial reports, questioning where the growth will come from in the year ahead. In reports to clients, they have noted that outlook statements have gone from being confident ... More
By John Kavanagh Published on Monday, 7 November, 2011 Filed under ANZ, NAB, WBC, results

NAB: the big results season improver

National Australia Bank has won the race for best performer in the 2010/11 annual bank results, based simply on the improvement in its key indicators, with ANZ running second. Return on equity: PwC's banking partner, Mike Codling, said the banks did a good job of producing increased returns for ... More
By John Kavanagh Published on Monday, 7 November, 2011 Filed under ANZ, CBA, NAB, WBC, results

Asian horizons keep ANZ on its toes

ANZ hopes to find new banking acquisitions in Asia, as European and North American banks sell their overseas assets to prop up troubled domestic operations. Speaking at the presentation of the bank's full-year profit for 2011 on Thursday, ANZ chief executive Mike Smith laid out his acquisition ... More
By Ian Rogers Published on Monday, 7 November, 2011 Filed under ANZ, results

Costs rising faster than revenue at Westpac

Costs may rise faster than revenues for the second year in a row at Westpac next year, as the bank soldiers on with an array of projects designed to strip out expenses and underpin a lift in product sales.  This will dampen earnings growth. Most of the payoff may not flow through until 2013 or ... More
By Ian Rogers and John Kavanagh Published on Monday, 7 November, 2011 Filed under WBC, results