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CEO Brian Hartzer will pocket fixed pay of $2.7 million, but will forgo a much larger amount of up to $22m in short-term and long-term bonuses as a result of the explosive Austrac legal action. The bank announced Mr Hartzer would step down as CEO on December 2 and be paid out his 12 month notice period.

 

He has fallen on his sword given the financial crimes agency, Austrac, lodged damaging action against the bank last week alleging it breached the law 23 million times and helped facilitate child exploitation.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Both Mr Hartzerâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s unvested deferred short-term variable reward and unvested long-term variable reward will be forfeited,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Westpacâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s statement to the ASX said. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“In addition to forgoing his FY19 short-term variable reward, Mr Hartzer will also not be eligible for short-term variable reward in FY20 or FY21.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

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Up slightly on the Hartzer/Board changes, but not out of the woods just yet and SP could go down further, IMHO

 

While Hartzer had to go, it's worth noting that these offenses date back to 2013 when Gail Kelly was CEO.

 

Westpac twists over dirty money

Moody's said that wyhile it was too early to estimate the value of any potential financial penalties, the AUSTRAC case was "credit negative because of the damage to the bank's reputation and the adverse financial impact from potential fines and costs related to remedial actions".

 

"Compliance problems of this nature also highlight the corporate governance challenges of maintaining tight controls at large and complex institutions, and the negative spillover effects for the banks' reputations," Moody's said.

 

In more bad news for the bank, state governments from Victoria and NSW said extensions of lucrative banking contracts worth hundreds of millions were being scrutinised[/quote].

https://www.afr.com/companies/financial-ser...20191125-p53dyx

 

 

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Some people bring happiness where ever they go, others whenever they go. The latter may apply to the Westpac Banking Corp (ASX: WBC) share price after this mornings announcement that the bank has booted its embattled CEO Brian Hartzer.

 

The chairman Lindsay Maxsted will also bring forward his retirement to early 2020 and fellow director and head of the risk committee, Ewen Crouch, will leave the bank at next weekâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s AGM.

 

Shareholders, the government and other stakeholders were pressuring the bank to make big changes to its leadership team following damning allegations that Westpac facilitated child sex exploitation as it turned a blind eye to money laundering.

 

Westpac share price outperforms

The Westpac share price jumped 1.2% to $24.73 in early trade when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index gained half of that.

 

In contrast, the Commonwealth Bank of Australia (ASX: CBA) share price and National Australia Bank Ltd. (ASX: NAB) share price increase around 0.5% and the Australia and New Zealand Banking Group (ASX: ANZ) share price slipped 0.1% at the time of writing.

 

Westpac became un-investable without a big shake-up in the leadership team, in my view. From that perspective, I think Westpac is starting to look interesting again after it lost nearly 16% of its value over the past month. You donâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t need to ask me if I welcomed the news!

 

Share price catalyst

Itâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s worth noting that stocks often outperform after ousting unpopular leaders. National Australia Bank Ltd. (ASX: NAB) is the most recent relevant example. The departure of its former chairman Ken Henry and CEO Andrew Thorburn in February this year lit a fire under the stock.

 

Both men also came under intense pressure to quit following their appearance at the Banking Royal Commission.

 

From February till mid-November, the NAB share price surged 21% to become the best performing big bank stock in 2019. I think its reluctance to announce a capital raising to shore up its balance sheet contributed to the recent bout of weakness, but thatâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s for another story.

 

Lingering risks

This isnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t to say Westpac is out of the woods though. There is still a very real and probable prospect of Westpac being hit with the biggest fine in Australian corporate history. That could burn a $1 trillion dollar hole in its balance sheet.

 

This leaves Westpac exposed to doing another cap raise. The current SPP that closes on 2 December isnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t going so well, particularly given that the stock is trading under the offer price.

 

Then there is the risk that institutional shareholders who tipped $2 billion into the bankâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s placement will sue. The upcoming court case brought by AUSTRAC may expose when the board became aware of the money laundering issue, and if they lived up to their continuous disclosure obligations.

 

Who ever said investing in Australian big banks was boring!

 

The post Is the Westpac share price suddenly back in the âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“buyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ zone? appeared first on Motley Fool Australia.

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back in buy zoon ??? i guess it said about longer term!!

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According to AFR - Westpac removed compliance officer who reported breach

Westpac Banking Corp's experienced anti-money laundering chief was told she didn't have the skills for the job and would have to take a more junior role after informing the bank that it faced the largest fine in corporate history, industry sources said.

https://www.afr.com/companies/financial-ser...20191125-p53dqd

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rough calculation (formula = 5 day volume weighted average price less 2%) suggests that WBC SPP (up to $30k, closing next Monday 02/12) will be priced ~$24.75.

 

With the CEO and 2 directors soon out the door, despite AUSTRAC, is this price a buy opportunity?

 

 

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Buy Westpac for a week - then get out: WAM tells shareholders

Wilson Asset Management reckons brave investors may do well in a short-term trade on under-siege Westpac by buying the stock over the next few days as the negative headlines continue.

But they will need to exit soon afterwards, because the costs for Westpac will keep mounting from the AUSTRAC scandal, the fund manager said.

And this would happen against a backdrop of weak credit growth, thinning margins and ultra-low interest rates that will be a handbrake on all of the big four banks.

https://www.afr.com/companies/financial-ser...20191126-p53e9q

 

WAM was one of many institutions that participated in a $2 billion capital raising in early November before AUSTRAC's allegations that Westpac breached anti-money laundering protocols surfaced.

 

WAM also said buy big miners - BHP< RIO< FMG - who are all set to benefit when global growth improves and China starts lifting spending

 

 

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