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Hybrid listings perform poorly

The performance of recent hybrid issues since they listed on the Australian Securities Exchange has been poor, with the prices of some securities falling below their issue prices, and credit spreads widening 20 to 50 basis points. According to analysis by fixed-interest broker FIIG Securities, ... More
By John Kavanagh Published on Monday, 28 May, 2012 Filed under hybrids

NAB's Clydesdale Bank losses heavier than earlier reported

National Australia Bank has provided an alternative, and grimmer, view of its UK banking business in the UK over the half year to March 2012. Financial statements for Clydesdale Bank, published by the NAB subsidiary on Friday, show the bank made a loss of £186 million (A$297 million) in the March ... More
By Ian Rogers Published on Monday, 28 May, 2012 Filed under NAB, results

Small caps: Thorn Group beats the retail downturn

Consumer goods rental company Thorn Group (ASX code: TGA) has maintained growth, despite the overall weakness in the retail market. The company's Radio Rentals division increased customer numbers by 3.1 per cent and earnings before interest and tax by 12 per cent, to A$45 million. Thorn Group ... More
By John Kavanagh Published on Monday, 28 May, 2012 Filed under small institutions, results

CBA will live with tighter margins

Commonwealth Bank will wear the squeeze on its interest margins from more expensive term funding, the bank's chief executive told an investor briefing last week. CBA released its third-quarter trading update on Thursday. It said unaudited cash earnings for the quarter were A$1.75 billion.The bank ... More
By Ian Rogers Published on Monday, 21 May, 2012 Filed under CBA, results

Banks fail to meet new profit reporting rules

The major banks have failed to meet their obligations for reporting non-statutory earnings figures in the half-year results presentations they have issued over the past few weeks. In December, the Australian Securities and Investments Commission issued updated guidance (RG 230) for the use of ... More
By John Kavanagh Published on Monday, 21 May, 2012 Filed under ANZ, Westpac, NAB, investor returns, shareholder oversight

'Volatile' markets income worries analysts

Sell-side banking analysts are not convinced about the big banks' reliance on income from volatile markets business and the latter's ability to produce income growth in the March half-year. UBS analyst Jonathon Mott said in his commentary on the big banks' first half results: "We had concerns ... More
By John Kavanagh Published on Monday, 21 May, 2012 Filed under analysts, ANZ, Westpac, CBA, NAB

Banking regulator cautions on cost cutting

The banking regulator beat the drum once more on the need for banks to lift their percentage of long-term funding on Friday, with APRA chair John Laker using a speech to remind banks they must do so. Or at least they must show they have made every effort to do so before they will be given access ... More
By Ian Rogers Published on Monday, 14 May, 2012 Filed under APRA, prudential

NAB's Clyne sticks to his guns

National Australia Bank chief executive Cameron Clyne has defended the bank's retail banking strategy against charges that it is a high-cost, low-margin approach that adds nothing to shareholder returns. "We are very happy with the personal bank," Clyne said. The personal banking division, which ... More
By John Kavanagh Published on Monday, 14 May, 2012 Filed under NAB, results

Budget changes will crimp bank earnings

The projected net profits and earnings per share of banks, and most companies, will have to be trimmed, with confirmation in last week's federal Budget announcement that the rate of company tax will remain at 30 per cent. A cut to 29 per cent had been outlined as part of the tax reforms connected ... More
By Ian Rogers Published on Monday, 14 May, 2012 Filed under government policy

Stiff margin contraction hits ANZ Australia

A seven per cent fall in earnings for ANZ's Australian division was driven by a 13 basis point decline in its net interest margin, which fell from 2.58 per cent in September to 2.45 per cent in the March 2012 half. The Australian retail and business banking arm reported a profit of A$1.34 billion ... More
By Ian Rogers and John Kavanagh Published on Monday, 7 May, 2012 Filed under ANZ, results

Kelly promotes a deposit culture at Westpac

Westpac chief executive Gail Kelly believes her bank needs to develop more of a deposit culture to meet changes in regulation and customer behaviour. "Banks have traditionally been very strong on lending," she told analysts at last week's half-year results announcement. Staff performance ... More
By John Kavanagh Published on Monday, 7 May, 2012 Filed under WBC, results

What the analysts are saying: Westpac on Hold, unsure about ANZ

The majority of sell-side analysts left Westpac on Hold or Neutral after the bank released its half-year results last week, while ANZ's results prompted a more mixed response. Six of nine commentaries seen by Banking Day have Westpac on Hold or Neutral. Two are recommending the stock as an ... More
By John Kavanagh Published on Monday, 7 May, 2012 Filed under analysts, ANZ, Westpac