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The Banks
Does It Get Any Better For The Big Four?
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blacksheep
post Posted: May 15 2018, 09:19 PM
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In Reply To: Mags's post @ May 15 2018, 08:59 AM

QUOTE
And yet, last night I watched, laughed and cried at the four corners story on HSBC


A little closer to home is this investigation by Sentry - suggest you watch the video in this article - Court document sheds new light on alleged money laundering case involving former South Sudanese military general

extract
QUOTE
According to The Sentry, an anti-corruption watchdog set up by actor George Clooney and activist John Prendergast, military generals in South Sudan earn up to $65,000 a year and the wealth amassed by some of them and their families is unexplained.

The Mai family was on The Sentry's list.

They discovered the luxury house in Narre Warren while investigating corruption in South Sudan for a report published in 2016, War Crimes Shouldn't Pay.

This prompted the Australian Federal Police (AFP) to start an investigation.

The ABC has seen the affidavit that outlines the AFP's case.

Red flags
According to the document, an initial deposit of $155,171 was wired from a bank account belonging to Hoid Establishments, a development company in Uganda, directly into the trust account registered to the Melbourne-based real estate agent that handled the sale in June 2014.

John Chevis, who spent 12 years working on fraud and corruption cases for the AFP and is now an adviser on money laundering for the United Nations, said the transaction should have been the first red flag.

"The real estate agents involved in the sale of the house in Australia should have conducted their own due diligence on the source of the funds, although Australia's anti-money laundering laws do not currently require it," he said.

The AFP investigator claims the balance of the million-dollar property and a luxury car was paid by money that was transferred from Africa into National Australia Bank (NAB) business accounts held by a luxury car business registered in Nguoth Oth Mai's name.

The NAB said in a statement that it conducts checks and due diligence on all customers.

However this case raises serious questions around its banking process.

"They should possibly have noticed that the funds travelled a circuitous route for which there is no apparent commercial reason," Mr Chevis said.

"Having identified these transactions as unusual, the banks should then have sought further information on the source of the funds and then, assuming they identified the source as illegitimate, rejected the transactions."

Where did the money come from?

That circuitous route is revealed in the AFP's affidavit.

More than $1.5 million was transferred in five instalments from companies located in Uganda and Kenya, sometimes going through banks in Dubai, into the NAB business account registered to a luxury car business — Sportscars Dealers — a company where the former general's son, Nguoth Oth Mai, was both director and majority shareholder.

The AFP stated the company did not trade any vehicles.

The police allege the unexplained payments came from companies owned by two businessmen, Humphrey Kariuki and Idro Taban, both known to the anti-corruption watchdog, The Sentry.

"Records show that firms owned by these businessmen received contracts from the SPLA [Sudan's People's Liberation Army] during Hoth Mai's tenure as chief of staff, including Belgravia Services Ltd, Dalbit Petroleum and LOID Investment," The Sentry said in a statement.

"LOID Investment was listed as the 'notifying party' for a weapons shipment and that Dalbit Petroleum had wired hundreds of thousands of dollars into the personal bank accounts of two South Sudanese generals in 2014.

"Like Hoth Mai, one of those generals also used the funds for the purchase of a home outside South Sudan."

Centrelink benefits and tax evasion....................

http://www.abc.net.au/news/2018-05-14/cour...ng-case/9738920



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
Mags
post Posted: May 15 2018, 08:59 AM
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In Reply To: early birds's post @ May 14 2018, 09:35 AM

QUOTE
the golden day of our 4 big banks are over.


Part of me says you're correct, but there's another part that says : Nah

It's a bit of a laugh: Years ago, some researchers in USA come out and said that the most profitable sector in the world is : Australian Banks.

And yet, last night I watched, laughed and cried at the four corners story on HSBC. Offices in over 100 countries, it's truly a global bank, so big that when the USA wanted to prosecute, UK government steps in and stops it, for 'global stability'..

HSBC makes ~$20 billion profit: Globally.

And here's our little banks putting up huge numbers, but in an economy that's minuscule.... Is it any wonder our private debt is out of control.

I'm not sure what will come out of the royal commission, it almost hinges on the up coming federal election: Turnbull will want the commission, shut down and quietly pushed aside, Shorten will want to continue, and broaden it's scope. What 'recommendations' are made, who knows, and what will be implemented, who knows and then again, what will be enforced????

These banks are so massive, they can continue to do what they like. No politician with a future post politics in mind will come down hard on the banks: We all know they have the nicest paying consulting jobs and offices. never bite the hand that feeds you.


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blacksheep
post Posted: May 14 2018, 11:39 AM
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Should be an interesting watch
Banksters, by Jerome Fritel & Marc Roche for French broadcaster Arte and presented by Sarah Ferguson, goes to air on Monday 14th May at 8.30pm. It is replayed on Tuesday 15th May at 1.00pm and Wednesday 16th at 11.20pm. It can also be seen on ABC NEWS channel on Saturday at 8.10pm AEST, ABC iviewand at abc.net.au/4corners.
QUOTE
Banksters: the scandalous conduct of a global bank.

“You have to ask: if you don’t prosecute these people, who the hell are you going to prosecute?” Former US Senate investigator

HSBC is one of the world’s largest and most powerful financial institutions with offices on five continents, including in Australia. It likes to spruik its financial might and global reach. Behind the corporate gloss, it has a far less attractive reputation. The bank has been at the centre of several of the biggest financial scandals uncovered this century.

“Affiliates of drug cartels were literally walking into bank branches with hundreds of thousands, sometimes millions of US cash… that didn’t happen once, it didn’t happen twice, it happened systematically over the course of about a decade.” Former US Deputy Federal Prosecutor

HSBC, or the Hong Kong & Shanghai banking Corporation has been implicated in a raft of illegal activities, from money laundering for the mafia, to enabling tax evasion and currency manipulation.

“No matter where you live, no matter what kind of business you are in, if you wish to enter the offshore system, HSBC is likely to be your bank.” Investigative journalist

In this global investigation, the role of HSBC in these scandals is laid bare.

“There is simultaneously drug money, money from terrorism, money from Belgian diamond dealers, money of the French dental surgeons, money of the elite and the world of showbiz, of French and European aristocracy... it was a national sport, hiding money in Switzerland and at HSBC.” Reporter

Despite the revelations, the bank has flourished, leaving investigators frustrated.

“How many billions of dollars do you have to launder for drug lords before somebody says, ‘We’re shutting you down’”? US Senator

The film raises disturbing questions about who is in charge of regulating the banks in an increasingly globalised financial world.

“Who has jurisdiction over an institution that operates in a hundred countries? Who has the responsibility for taking on that kind of criminal undertaking?”Former US Senate investigator

Regulators stand accused of failing to adequately punish the bank and impose penalties that hold HSBC to account.

“Are we capable of regulating the banks properly? Of course we are. Do we want to, is really the probably important question.” UK MP

With the rise of China, HSBC is positioning itself as the bank of choice to drive China’s global economic ambitions, which makes investigators uneasy.

“As you have firms of the stature and the size of HSBC marrying up with rising Chinese banks that are now so huge, it’s a recipe for potential disaster.” Former undercover agent, Royal Canadian Mounted Police

http://www.abc.net.au/4corners/banksters/9747234



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
early birds
post Posted: May 14 2018, 09:35 AM
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Was the first half of the 2017-18 financial year as good as it gets for Australia’s four major banks?

Certainly the usual post reporting season reports suggest so and leading credit rater, Fitch, thinks the big four are faced with constraints on earnings in the next year.

The four big banks (CBA, Westpac, NAB and ANZ) earned statutory half-year profits totalling $15.0 billion for the first half of the 2017-18 financial year - an increase of 5.5% from a year earlier.

But their preferred cash profits fell 1.7% to $15.2 billion, thanks to a combined $1.4 billion in charges taken for regulatory, compliance and restructuring costs.

Westpac did best, according to analysts. Its return on equity (ROE, a key measure for local analysts, big investors and bank managements) rose to 14%, the average ROE for the other majors fell, and the sector average of 13.05% was at its lowest level since 2009.

That’s still a high return when the cash rate is 1.5%, but it is down 365 basis points from its post-GFC high in 2011.

The stockmarket performance in the past week shows us that the CBA is still on the nose - its shares fell 3% and they are now down 12.2% for the year to date and Friday’s close of $70.53 was the lowest January 2013.

The major influence remains the poor publicity from the banking royal commission and continuing fears about the financial fallout of that and the money laundering case brought against it by AUSTRAC.

While Standard & Poor’s reaffirmed the Commonwealth Bank’s ratings it did put the country’s biggest bank on a negative outlook, meaning there’s a one third chance there could be a downgrade within the next year to 18 months.

The Commonwealth’s third quarter trading update last week did nothing to change the opinion of a growing number of investors that there is something in Fitch’s outlook for the sector.

NAB shares were down 2.4% last week and have only lost 3.9% for the year so far, while Westpac shares rose 1.7% last week to be down 5.6% for the year to date.

The best performer last week was the ANZ whose shares rose 2.2% to be down just 2% for the year so far. A month or so ago its shares were down double that and more.

Fitch Ratings remains negative on the big four and last week rammed home its opinion with a warning they face further pressure on revenues and earnings from slowing home lending (as we saw in the March housing finance data on Friday with a 9% slide in investor loans).

Fitch, which has held a negative outlook for the Australian banking sector since the start of 2017, also thinks the banks’ non-interest revenue was likely to remain stagnant or decrease.

“Credit growth, especially in the residential mortgage segment, is slowing and non-interest revenue is likely to remain stagnant or decrease,” Fitch Ratings said. As a result the ratings group reckons the banks will have to raise lending margins to maintain profitability and that looks a challenging prospect in the face of the current royal commission which will run to late this year.

In other reports on the big bank half-yearly result accounting firms, EY, PwC and KPMG all highlighted how higher restructuring and regulatory costs depressed cash profit across the sector over the past six months, forcing banks to go harder on simplification of business models.

The ANZ has been leading the way in selling assets, NAB has been active and will separate its MLC business, the Commonwealth has sold its insurance arm and will spin off or sell its huge Colonial First State asset management business, while westpac has been less active, but has separated itself from BT (now renamed Pendal).

“These results are perhaps the first sign that the ‘ ualitative’ economic, competitive and conduct challenges we have been calling out over the past few years, even in the face of record earnings, are now translating into quantitative financials,” said PwC’s banking and capital markets leader, Colin Heath said in his firm’s report.

The latest bank earnings season was again assisted by ultra low levels of bad and doubtful debts (which helped all four), which fell again despite observations over previous years they couldn’t get any lower. Lower bad debts lifts cash profits, but also works the other way. Net interest margins rose for the CBA, NAB and Westpac in the half year periods, but fell for the ANZ.

Fitch expects the banks' bad loan charges to increase from their current historic lows in the short term but noted a reduction in the banks’ risk appetite would improve the long-term quality of their loan books.

That reduction in risk will come about via the blowback from the royal commission (banks have already started taking a tougher line on home loans in particular), and the continuing fall in interest only loans and the move by some borrowers to normal principal and interest mortgages also destress loan books.

While the Commonwealth Bank on Wednesday said the number of its home loans more than 90 days in arrears rose in the three months to March 31, from 0.59% of mortgages to 0.65%, Westpac had a different, more relaxed story.

Westpac pointed out in its March 31 half year report that there was “Little change to 90+ day delinquencies over the half” and that “Properties in possession reduced to 398 over the half, out of a portfolio of about 1.6 million loans.”

And banks can’t be hoping for the Reserve bank to help with a well-timed rate rise - official rates are on hold until 2019 and perhaps 2020 (if the forecast from Dr Shane Oliver, the AMP’s chief economist is any guide). he said at the weekend that there is stil a chance of a rate cut if conditions do not pick up.
=================================================

fitch always tough than spx and moody ...it seems. but i kinda agree with Ceo of ANZ -----the golden day of our 4 big banks are over.



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nipper
post Posted: Nov 1 2017, 05:23 AM
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The Thoughts of BlackRock CEO Larry Fink
QUOTE
Household investing is only a problem if household income rises slower than inflation and or you have rising unemployment. Over the last three years or I think the Australian banks have been pretty good at keeping a good loan to value ratios and low default rates."

"I am less fearful of the banks. Two years ago I would say the banks were very expensive versus international banks; "in the last two years the banks, based on the stock prices are flat, Macquarie is probably the only one that has been rising.

"But the majority of the banks haven't really moved, whereas JPMorgan's stock price has doubled. BNP Paribas's stock price has more than doubled. So, all the rest of the banks are now closer to the valuations of the Aussie banks.

"Australia has its share of governmental issues, like so many democracies, like the UK and the US. "Generally when there's political instability the first line of attack is against the banks. When there is uncertainty around governments there is generally uncertainty around banks.

"But I don't think the banks overall in Australia are unusually bad. I would say that the banks by and large are pretty strong in the foundational beliefs of doing the right thing. "But I believe the Australian banks have done a very good job overall.

"Now could there have been some lending practices that could have been better? Sure. Obviously, there's no excuse for money laundering, so I'm not here to say that there is not some evidence of some bad practices. There has to be change when you see that type of bad behaviour if there is not the proper process.

"But I would say for the size of these entities these four banks in Australia and the scale of what they do in terms of what they do for a society and they are not so bad."

Read more: http://www.afr.com/brand/chanticleer/black...3#ixzz4x7CxhyYD





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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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nipper
post Posted: Sep 25 2017, 06:10 PM
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Mortgages account for roughly 60 per cent of major bank loans and have driven record profits for Australia's largest banks. But borrowers have recently begun moving away from high-cost interest-only loans, which have largely supported bank profitability.

PwC recently pointed out that new loans will be made on a principal-and-interest basis and to owner-occupiers. This would put a further squeeze on bank margins, given their lower interest rates.

Further to this, following the banks' decision to raise rates on interest-only loans – by about 0.5 percentage points – clients are now paying down their debt faster than ever.

"This doesn't bode well for Australian banks who are already fairly stretched," ..."This transition off interest-only loans for borrowers and the fact they're already relatively expensive versus global peers explains why global investors are likely to look elsewhere."...
AFR



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 


Mags
post Posted: Aug 24 2017, 09:18 AM
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In Reply To: blacksheep's post @ Aug 23 2017, 03:49 PM

The banks may be behind amazon in terms of data management....

But when amazon makes real profits, then I'll sit up and take notice, until then, they're just a cut price retailers, who jumped on the IT band wagon: Nothing they do is particularly special, they make turn over sure. Nothing they do is unique enough for them to have huge profits so it's just smoke and mirrors.

A few shareholders get spectacularly rich from speculators, but where is the real money??????


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blacksheep
post Posted: Aug 23 2017, 03:49 PM
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QUOTE
Tech giants like Amazon and Facebook more disruptive to banks than fintech start-ups: WEF
Companies like Amazon and Facebook pose more of a competitive challenge to banks than fintech, according to a report by the World Economic Forum.
Banks are lagging behind tech giants in the development of cloud computing, artificial intelligence and big data.

Ryan Browne | @Ryan_Browne_
Published 19 Hours Ago | Updated 9 Hours Ago
https://www.cnbc.com/2017/08/22/tech-giants...h-startups.html




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Aug 8 2017, 08:31 PM
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Why do the senior executives of Australian banks get paid so much? It's complicated
The World Today By David Taylor
Updated about an hour ago


QUOTE
Ever wondered how much a banking executive gets paid? Unsurprisingly, the short answer is a lot.

The Commonwealth Bank's board has announced it will cut the bonuses of senior executives in response to last week's sensational allegations it breached anti-money-laundering laws.

But why are they paid so much in the first place?

The ABC spoke to two corporate governance experts who said Australian banking executives were among the highest paid in the world.

It starts with the bonus system..................................


http://www.abc.net.au/news/2017-08-08/why-...so-much/8785534

QUOTE
Bank chief executive salaries

Statutory pay may not represent the total remuneration package in order to comply with accounting standards. For example, Ian Narev's total pay was $12.3 million in 2015-16.

BANK CEO STATUTORY PAY (2015-16)
1 CBA Ian Narev $8.77 million
2 Westpac Brian Hartzer $6.7 million
3 ANZ Shayne Elliott $5.07 million
4 NAB Andrew Thorburn $6.7 million




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: early birds  
 
nipper
post Posted: Jul 24 2017, 11:11 AM
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QUOTE
The Australian Prudential Regulation Authority (APRA) has detailed its new capital adequacy targets for the banking sector, increasing the Common Equity Tier 1 ratios from 9% to 10.5% for the four majors and Macquarie, to make them "unquestionably strong". Regional bank proposed targets were raised from 7.0% to 7.5%. Banks will have until January 2020 to implement the increased requirements and the capital requirements are far less onerous than the market expected, making it a distinct possibility that they will be able to meet the increased levels organically.

The new APRA targets may result in interest rate increases on loans for the banks to recover additional costs and maintain profitability, which in turn could put further pressure on the RBA to stand pat on interest rates for longer.

Following the announcement of the new APRA targets, Standard and Poor's raised the possibility of an upgrade to the banks' "standalone credit profiles" (from 'A-' to 'A'), which would in turn lift the ratings in their subordinated debt and hybrids.

Outgoing ASIC chairman Greg Medcraft labelled as "ridiculous" the suitability of hybrid instruments for retail investors, noting they were banned for retail investors in other markets such as the UK. Whilst I can appreciate the intent to protect uninformed investors against risk in complex instruments, I would point out that there are far riskier investments available to retail investors in Australia. For example, Betashares Australian Equities Strong Bear Fund (ASX: BBOZ) allows investors to take a leveraged short position in the Australian equity market – a trade that has lost 43% over the past 1 ½ years.
- from Mint Securities



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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