Australia’s major banks face many challenges but they are strong and remarkably adaptive and resilient. They have also finally accepted they are too big to behave badly.
Tag Archives | Australian banks
This exclusive annual scorecard checks bank results in a difficult year, and looks ahead at the hurdles and opportunities for the sector that many Australians rely on for their income.
The history of the Big Four banks is littered with bad strategies by overpaid executives, taxpayer-funded rescues and a lack of competition. As the banks clean up the Royal Commission mess, Macquarie has overall done better.
Many people are hoping bank profits and share prices will resume growth once the Royal Commission is done with, but new competition from digital disruptors could mean disappointment for bank shareholders.
Australian retail customers typically still pay a hefty fee on FX transactions at the airport or through the banks. Fintech solutions are more competitive, and global banks are also offering multi-currency accounts.
Australian banks appear cheap and their shares trade below broker targets. But three analysts offer deeper explanations that suggest stronger credit standards will affect house prices and credit growth.
Our regular check on the ‘star’ performances from the Australian banks’ May 2018 reporting season in the face of low credit growth, increased regulatory scrutiny and the sales of insurance and wealth management divisions.
It’s not simply a Banking Royal Commission. There’s a lot in there on superannuation and insurance, and most executives in the super industry don’t like it. What can we expect with such broad Terms of Reference?
The Australian banks are on firm ground with strong capital ratios, few bad loan problems and sustainable dividends, but lower demand for credit, tighter margins and the bank levy give no room for complacency.
A look at the ‘star’ performances from the Australian banks’ financial results for 2017 and how they have handled non-bank competition, government levies and business divestments.
Understanding the difference between first- and second-level thinking can make for more informed investment decisions, finding things others miss or bringing insights others don’t possess.
There is popular and political support for a bank royal commission, but what can it really achieve? Two years of bank bashing for doubtful results in an already heavily-regulated and monitored industry.
The wealth management businesses of major banks may be efficient uses of their capital, but it comes with scrutiny of the vertical integration model and culture risks. There’s increasing focus on whether it’s worth having.
Arrium’s collapse provides a case study on how Australian banks failed to properly monitor loan quality and company developments. Compensation for risk is one thing, but equally crucial is return of capital.
Hedge funds have been short selling Australian banks for a while now, mainly due to perceptions about the property market. However, it is not house prices but unemployment that matters most for bank prosperity.
The Big 4 banks make up nearly 30% of the ASX, and Australian shares make up a significant proportion of most multi-asset portfolios. Even if you can’t resist the bank dividends, you should review your level of exposure.