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That's what WAM has told it's shareholders - it's just their view. Probably a hundred other differing views from other insto's/brokers/analysts out there on the subject - some of which probably lean towards whether they are holding large quantities of bank stocks, or not.

 

As individuals, one has to make up their own mind and then wear the result of that decision :biggrin: Hope it works out for you.

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Mum and dad' investors allowed to back out of Westpac share buy in wake of scandal

The besieged bank said that following talks with the corporate regulator ASIC, it will give smaller investors eight days to withdraw their applications to purchase new shares, which were made before the scandal surfaced. There is no plan to extend this option to withdraw to institutional investors

 

Class action lawyers keeping an eye on the unfolding Westpac saga say it is possible this disclosure did not go far enough.

 

On page 21 of the prospectus released prior to the November capital raising, Westpac disclosed a "key risk" âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“failure to report "a large number" of IFTIs and referenced corporate watchdog AUSTRAC's investigation into the bank.

 

"Non-compliance with financial crime obligations could also lead to litigation commenced by third parties (including class action proceedings) and cause reputational damage," the document states.

 

"These actions could, either individually or aggregate, adversely affect Westpac's business, prospects, reputation, financial performance or financial condition.

 

Former ASIC lawyer turned special counsel for Shine Lawyers Craig Allsopp said the failure to quantify what "large" meant has put the bank in hot water.

 

"Westpac described a failure to report a large number of international transactions, what does large mean? I don't think people would have taken that to mean 23 million.

 

"Perhaps they should have said extremely large or in the tens of millions."

read more - https://www.theage.com.au/business/banking-...128-p53evr.html

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A couple more opinions on whether WBC is a buy or not

 

Cashing in on the crisis

Is the Westpac scandal an ethical deal-breaker or a rare opportunity for investors?

Morgan Stanley's Richard Wiles has downgraded his estimate for Westpac's earnings per share by 14 per cent for 2020 and 3 per cent in 2021 and says the likelihood of a dividend cut has increased.

 

Fund manager Nathan Parkin, who was formerly deputy head of equities at Perpetual and is now investment director at Ethical Partners, is not convinced the damage will just be in the short term.

 

"The shocking nature of the allegations, and especially the exploitation element, does affect the brand long term and could affect the flow of business in mortgages and deposits," says Parkin, who has been reducing his fund's already underweight exposure to Westpac in the days since the crisis began.

 

"That could make the difference financially ... there is more risk attached to the stock because of it."

 

https://www.afr.com/wealth/personal-finance...20191128-p53exu

 

WAM and Motley Fool are also quoted in this article, but their opinions have already been posted below

 

Parken also says if you're worried about investing in the Big 4 Banks on ethical reasons, Suncorp and regional banks like Bendigo and Adelaide Bank or Tasmania's MyState may be alternatives

 

 

 

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Parken also says if you're worried about investing in the Big 4 Banks on ethical reasons, Suncorp and regional banks like Bendigo and Adelaide Bank or Tasmania's MyState may be alternatives

 

Anyone taking Parkins advice on alternatives might want to wait until after they appear before the house economics committee on Friday - as per Michael West article - https://www.michaelwest.com.au/the-barangar...banking-regime/

 

The questions now is which bank is next? Bank of Queensland, Bendigo, Macquarie, Suncorp and Adelaide Bank all faced the house economics committee on Friday. National Australia Bank, whose share price tracked the fall in Westpac shares after the news, is rumoured to be vulnerable, a likely target for Austrac.
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some good news .

 

All the Banks rallied on the RBNZ review - Final decisions in RBNZ capital review still require $20b increase for banks but composition of capital is softened and banks get 7 years instead of 5 to adapt

- https://www.interest.co.nz/banking/102858/f...nks-composition

 

Seems there may be another WBC scandal about to be revealed, according to Investigative Journalist Anthony Klan

Anthony KlanVerified account

@Anthony_Klan

****SCOOP****

Massive new Westpac scandal. Billions gouged from 950,000-plus BT superannuation members over decade. Forensic investigation.

Details soon...

https://twitter.com/Anthony_Klan

post-330173-1575533461_thumb.png

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  • 3 months later...

Westpac's acting chief executive Peter King says the big four banks are strong enough to withstand a sharp rise in bad debts and a freeze in credit markets but warned that the biggest issue was how long they can keep afloat business borrowers with no cash flow.

 

Throwing some of the burden back on to the federal government, Mr King said the crisis "was a real economy issue that needs to be dealt with as a real economy issue," as households and businesses would require unprecedented support.

 

 

Westpac's incoming acting chief executive Peter King says the coronavirus crisis is a 'real economy' issue. Louie Douvis

 

"A bigger focus is how small businesses and consumers, and even big business, navigates during a period of low economic activity,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ he told The Australian Financial Review.

 

Mr King, who took the reigns at the nation's second largest lender after the anti-money laundering compliance scandal led to the resignation of former CEO Brian Hartzer, said the lender was conscious of its role in supporting and sustaining the economy whilst remaining strong.

 

"We are planning for very tough conditions and hoping for the best. We are gearing up for if people need help âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ if a small business has cash flows that are impacted or someone has reduced hourly pay and needs help with payments."

 

RELATED QUOTES

WBCWestpac Banking Corporation

$18.12

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1 year

1 day

Apr 19

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15.00

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Updated: Mar 16, 2020 âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 8.16am. Data is 20 mins delayed.

View WBC related articles

A plunge in economic activity looms in the second quarter, as industries such as tourism, education and entertainment grind to a halt. Westpac like other banks, will have to manage a rise in late payments, whilst remaining open to new lending.

 

Mr King said that the bank had spent the last decade building capital and liquidity buffers but "now was the time to use those buffers".

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We are not meant to stay at 'unquestionably strong' through all parts of the cycle,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ he said.

 

The 2014 David Murray-led Financial System Inquiry demanded the banks increase the amount of capital held to a level that could withstand losses to unquestionably strong levels.

 

To meet that definition, Australia's banks were required to rank among the top 25 per cent globally on this measure.

 

Crisis spills into credit markets

If the banks experience a rise in bad debts, the losses will result in a reduction in capital ratios, potentially to below the stated targets. This week, the Bank of England told UK banks it would relax capital targets as part of a broader support package.

 

Mr King's comments came after one of the most volatile weeks in financial markets history, that spilled into credit markets.

 

The cost of insuring against the default of Westpac's five year bonds soared from a little under 30 basis points on February 24 to almost 87 basis points last Friday, a three-fold increase.

 

National Australia Bank and Macquarie were forced to pull hybrid capital raisings late last week, after two of the worst trading days in the history that meant investors who had subscribed to those offers would face an immediate loss of at least 10 per cent.

 

On Friday, the Reserve Bank provided a record $8.8 billion of short term financing to the money markets, which the banks tap for funding. That came a day after the Morrison government announced a $17.6 billion fiscal support package.

 

The Reserve Bank is also expected to roll out a funding facility, similar in nature to the Bank of England's term funding facility, that would encourage the banks to lend to small businesses and households even as interest rates fall to near-zero levels.

 

Mr King said Westpac had ample 'liquidity' and he, along with the bank's treasurer Curt Zuber had issued long-term debt that does not need to be repaid for several years before the coronavirus induced market panics led credit markets to close.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The GFC was about banks not being confident with each other âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ but that is not the case," Mr King said.

 

"We can sit out for longer periods without dealing with each other. We are well prepared to stay out of the market.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

Years of change

The big four banks are heading into coronavirus well prepared as regulatory changes have forced them to increase their capital levels whilst also upping their holdings of safe assets that can be sold into the market on short notice to fund deposit withdrawals.

 

The banks have also been forced by regulation to spread the proportion of long-term debt they raise further into the future, reducing the amount they are required to re-finance in any given year.

 

But Westpac, like other banks, have endured years of rolling scandals and regulatory probes that have led to management upheaval, increased compliance costs, and an erosion of public trust, that culminated in a royal commission.

 

Mr King said the bank's balance sheet was set up well, and it had an experienced, crisis-hardened staff.

 

"We have a few people that were in and around in a hands on way during the last crisis. We know the tools and techniques, and the interface with the Reserve Bank and the government are working well.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

Westpac employs over 35,000 staff across Australia and Mr King said the 202-year-old institution was playing its part in relation to the coronavirus "to slow down the spread within the community."

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We have a playbook if we have a positive [coronavirus] result âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ how we manage those people, how we clean the office and how we communicate to the team âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ that lines up with government policy."

 

Mr King said Westpac was thinking about fulfilling the critical capabilities to the economy, That includes âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“having branches open, ATMs working, internet and digital banking operating, making sure our cyber teams are focused on protecting data at critical points, and keeping lending going.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

===========================

Mr King said Westpac was thinking about fulfilling the critical capabilities to the economy!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

 

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here comes my guess work

1, King asking Govt. to let WBC off the hook lightly about their money laundering thingy

2, if Govt does that then whole banking sector will be lifted , that will lift asx200 as financial sector provide support for the market

 

it make sense for Govt to do that with current situation, but it's just my educated guess work. :blush:

WBC PRICE

if govt didn't do that , market already priced in WBC will be hit hard with fine---they will trade current price, but id Govt, do what i guessed than WBC will shoots up 10--20% in one hit. with current panic situation it is really a posibility.

 

i hold heaps WBC, so i'm really biased ,

 

please......DYOR before take any action.

 

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On a bigger stage, but keeping with the theme

So when exactly does a coronavirus-triggered corporate market meltdown officially turn into a full-blown financial crisis? Thatâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s a question many market participants, and banks in particular, must be asking themselves.

 

If there has been any silver lining to the current market shock and the recession that is likely to follow, it is that it hasnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t been a 2008-style banking crisis âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€šÃ‚ of the kind that jumps like a virus between highly leveraged global financial institutions and causes them to bleed dry.

 

The Dodd-Frank and Basel III regulations that followed in the wake of the subprime crisis were designed to mitigate that risk. Banks, required to hold larger quantities of high-quality assets, were made to do less trading, and more traditional lending.

 

That worked, up to a point. The virus-induced brake on consumer activity and labour markets, which has in turn triggered a corporate credit run, is what caused the market panic this time, rather than risky trading on the part of global banks.

 

Today, it is not Wall Street financial institutions, but companies in a variety of industries that are stressed, as a simultaneous supply and demand shock means they need to tap credit lines to pay their bills...

- different pathway, same destination?

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