KPMG’s Major Australian Banks Year-End Analysis Report 2018-19 finds that the four majors reported a combined cash profit after tax from continuing operations of $26.9 billion, down 7.8% on FY2018.
Read MoreWestpac’s earnings result fell short of Morgan’s forecast, although adjusting for “transient items” produces a better underlying result. The dividend of 80c, down from a 94c interim, is -4c lower than the broker forecast.
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NAB shares slid yesterday in the wake of Westpac’s surprise $2.5 billion capital raising and dividend cut as investors said the Melbourne-based lender would be the next major to cut its payout or even approach shareholders for more money.
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Westpac shares went into a two-day trading halt before the ASX opened on Monday morning to allow it to make a surprise capital raising of around $2.5 billion to big shareholders.
Read MoreWill we see more customer remediation costs on the way for Westpac after a loss in the Federal Court that saw the bank severely criticised and its actions taken to task by the three judges sitting on the appeal?
Read MoreWestpac has announced additional charges for customer remediation and wealth management restructuring. Additional charges reduce Morgan Stanley’s cash profit estimates by -6.5% for the second half and -3.5% overall for FY19.
Read MoreWestpac has joined rivals, NAB and ANZ in revealing more hits to the bottom line for 2018-19 from customer remediation and compensation costs.
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In its second and final stability review for 2019, the RBA has warned on a combination of factors that will depress bank earnings, starting with the continuing rise in customer remediation over abuses exposed by the Hayne Royal Commission.
Read MoreThe banking regulator, APRA continues to get tougher with banks and other financial groups it supervises. Yesterday it issued what amounts to a very expensive traffic fine for Westpac.
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The chances of the banks paying higher dividends in the coming years look to have diminished after APRA ordered Westpac, NAB and ANZ to set a total of $1.5 billion in extra capital aside.
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Weaker bank shares helped take the wider market lower for another session, but the day’s loss was nowhere near as damaging as Monday’s 1.2% slump.
Read MoreThe RBA’s second 0.25% rate in two months had a predictable impact on bank share prices – down they went, taking the ASX 200 with them.
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Redemption? Sort of; but the way the share prices of Australian banks rebounded in the June half year was extremely helpful to super funds and self-managed funds and investors generally.
Read MoreWestpac is having a second go in a few months in overhauling the way it calculates executive pay.
Read MoreANZ and Westpac failed to pass on the full 0.25% cut from the Reserve Bank to its mortgage customers and immediately faced pressure from the central bank.
Read MoreBank shares had a second good day on the ASX yesterday after their post-election surge on Monday. Monday it was Prime Minister Morrison’s surprise win, yesterday it was APRA as the financial prudential regulator revealed plans to relax a key restriction on home loans.
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Some brokers have started to upgrade their recommendations to “BUY” on the banks and believe that they represent value in and around these levels. I still strongly disagree.
Read MoreIt was a messy result, the broker notes, due to accounting changes, but Westpac’s cash earnings and dividend met the broker’s expectation.
Read MoreWestpac has held interim dividend at 94 cents a share despite a 22% slump in cash earnings for the six months to March.
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Ahead of the release next Monday of its 2018-19 interim profit Westpac has surprised the market with an after trading revelation of a $617 million earnings hit from customer compensation charges.
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With three big banks reporting interim results in early May, it will pay investors to look at the first Financial Stability Review of 2019 from the Reserve Bank and remarks on the profits and earnings.
Read MoreWe got a sign of those pressures on the big banks again yesterday when Westpac joined the Commonwealth in cutting interest rates on some of its fixed-rate home mortgages – with some of the cuts aimed directly at the weak investor sector.
Read MoreThe bank has announced that first half cash earnings will be reduced by around -$260m amid further customer remediation. This remediation does not include aligned dealer group fee-for-no-service, which is still to come.
Read MoreWestpac has leaked some more red ink out into the market warning that H1 profit will take a $260 million hit from refunding customers in its financial advice, consumer and business banking arms.
Read MoreWestpac investors yawned yesterday at the news the bank was quitting the financial advice sector while overhauling its management structure that will two of its most senior executives leaving the bank.
Read MoreIt’s only been a month since Hayne’s final report has been released, but far from driving a stake through the financial hearts of the Big Four Banks – Commonwealth, Westpac, ANZ and NAB – their position is returning to being as dominant as ever.
Read MoreWestpac has slipped out a Q1 update revealing a 6.8% rise in cash earnings, BoQ however expects its earnings for the half-year to be down 6% to 9% when it releases them in April.
Read MoreMore than $20 billion was added to the value of listed financials – lead by the big four banks yesterday after investors concluded the outcome from the Hayne banking and finance royal commission would not damage their business models our futures.
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The National Australia Bank is in the gun following the release of the final report from the royal commission which contained very sharp criticism of the bank’s chairman and CEO.
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The long-awaited final report from the finance and banking Royal Commission will be released this afternoon at 4.10 pm (there is a media lock up this afternoon ahead of the release) and while there will be a lot of heat and light and promises from the Morrison government, there will be nothing concrete.
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Australia’s big four banks, already reeling from a stagnant home loan market and revenues, the fallout from the Hayne Royal Commission and censure from upset shareholders, now face more financial problems in their most profitable offshore market – New Zealand.
Read MoreWestpac has suffered a stunning vote of no confidence in the bank board and management at a level we have seldom seen in Australia.
Read MoreASIC and Westpac now have to start a court case all over again after the Federal Court rejected the bank’s offer to pay a $35 million settlement for contravening responsible lending laws.
Read MoreMore hybrids and other issues to come from our slimming banks? That could be the outcome of a new move by APRA, the banking regulator to force banks to hold more loss-absorbing capital by 2023.
Read MoreAnother difficult year looms for Westpac and, while mortgage re-pricing should boost first half performance, slower wealth revenues and further customer remediation are likely to weigh.
Read MoreThe big four banks have survived a tough year financially unscathed, but with their reputations sullied what does 2019 look like?
Read MoreInvestors liked the flat annual result from Westpac yesterday and didn’t take too much notice of the mixed outlook (while many commentators and business media focused on it).
Read MoreWestpac has joined rivals ANZ and NAB in not inflicting direct financial pain on shareholders as a result of the impact from the banking and finance royal commission.
Read MoreAmerica’s third-quarter earnings season is nearing the end while in Australia, the September 30 results continue with Westpac revealing its full-year figures this morning, along with a first-quarter update from the Commonwealth Bank midweek.
Read MoreBanking analysts at Morgan Stanley have lifted their estimate for customer remediation costs for the banks to $3 billion over the next two years, up from an earlier forecast of just $500 million.
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