The Favorite Financial Fivesome – MQG, NAB, ANZ, IAG, SUN

  • Nov 30, 2019 AEDT
  • Team Kalkine
The Favorite Financial Fivesome – MQG, NAB, ANZ, IAG, SUN

Financial Sector of any economy is primarily understood to be the backbone of the economy. The contribution of this sector happens to play a pivotal role and provides a strength to the development of economy. Australia possesses a sophisticated financial services sector, which is mainly supported by a mandated retirement savings scheme and advanced business infrastructure. In order to provide a fillip to the sector, some players such as exporters, investors in Australia, fund management & superannuation companies provide their share of contributions. Let’s have a look at five financial companies and how they are performing in order to gauge their role in the development of the economy.

Macquarie Group Limited (ASX: MQG)

Macquarie Group Limited (ASX: MQG) works as a Non-Operating Holding Company for the consolidated entity. However, the activities of the consolidated entity are to provide banking, financial, advisory, investment as well as funds management services. The company and its controlled bodies corporate have recently become a substantial holder in Bellevue Gold Limited with the voting power of 5.17%.

A Look at First Half of Financial Year 2020 Results

  • Recently, the company has updated the market players with its results for the half year ended 30 September 2019, wherein it reported net profit after tax amounting to $A1,457 million, reflecting a rise of 11% against 1H FY19.
  • The company delivered a net profit contribution of $A1,717 million, reflecting a rise of 15% in comparison to 1H FY19 and 11% against 2H FY19, which have been helped by the Annuity-style activities undertaken by Macquarie Asset Management, Banking and Financial Services and certain businesses of Commodities and Global Markets
  • In 1H FY20, Net operating income (NOI) of the company stood at $A6,320 million, reflecting a rise of 8% on 1H FY19, while operating expenses of $A4,480 million were up 9% on 1H FY19.
  • During the same period, the company raised A$1.7 billion of equity capital via a $A1.0 billion institutional placement and $A0.7 billion share purchase plan.

Also Read: What technical factors says about Macquarie Group Limited?

The stock of MQG closed the day’s trading at $138.320 per share on 29th November 2019, reflecting a rise of 0.196% with a market capitalization of $48.92 billion as on 29th November 2019. The stock has generated a total return of 12.67% and 12.63% in the time span of three months and six months, respectively.

National Australia Bank Limited (ASX: NAB)

National Australia Bank Limited (ASX: NAB) is a well-known bank in Australia, which provides financial, banking and related services. The bank recently announced that David Hugh ARMSTRONG has made a change to his holdings in the company by disposing 900 Convertible Preference Shares II (NABPB) at the consideration of $91,638. Post-change, director possesses 12,074 ordinary shares.

Agreement to Settle Class Action

  • NAB, through a release dated 20th November 2019 announced that it has decided to settle down a class action suit which was initiated against the NAB by Slater & Gordon related to Consumer Credit Insurance.
  • The company mentioned in the release that the proceedings against NAB and MLC Ltd in the Federal Court of Australia had started in the month of September 2018, which was related to the sale of 2 Consumer Credit Insurance products such as NAB Personal Loan Cover and NAB Credit Card Cover
  • Subject to approval of the Federal Court of Australia, the settlement includes a payment amounting to $49.5 million.

Issue of Notes

  • As per the release dated 18th November 2019, the company announced that with respect to domestic Debt Issuance Programme, NAB has issued:
  • A$1,175,000,000 subordinated floating rate medium term notes, which will due on November 2031 and A$225,000,000 subordinated fixed rate medium term notes having their due date in November 2031.

Also Read: A comparison between Commonwealth Bank of Australia and NAB.

The stock of NAB closed the day’s trading at $25.950 per share on 29th November 2019, reflecting a fall of 0.789% with a market capitalization of $75.48 billion as on 29th November 2019. The stock has generated a total return of -2.82% and 0.15% in the time span of three months and six months, respectively.

Australia and New Zealand Banking Group Limited (ASX: ANZ)

Australia and New Zealand Banking Group Limited (ASX: ANZ) is in the banking industry, where it provides banking and financial products as well as services to business as well as individuals.

Actions to Prevent Financial Crime

  • Recently, the company through a release announced that it has undertook actions in order to assist in the prevention of financial crime in the Australian banking system.
  • It was mentioned in the release that ANZ has been prominently working with AUSTRAC in order to detect, prevent as well as disrupt serious financial crimes, which include terrorism, money laundering, tax evasion, child exploitation as well as human trafficking.

Issue of Subordinated Notes

On 21st November 2019, Australia and New Zealand Banking Group Limited, with respect to its US$60 billion Euro Medium Term Note Programme, has issued Euro 1,000,000,000 1.125% subordinated notes, which will be due in 2029.

The stock of ANZ closed the day’s trading at $24.890 per share on 29th November 2019, reflecting a rise of 0.08% with a market capitalization of $70.5 billion as on 29th November 2019. The bank has generated a total return of -5.22% and -11.18% in the time span of three months and six months, respectively.

Insurance Australia Group Limited (ASX: IAG)

Insurance Australia Group Limited (ASX: IAG) is a provider of general insurance, which include full range of personal and commercial insurance products.

Security Trading Policy

  • The company through a release dated 25th November 2019 released its security trading policy which includes description of requirement for dealing in securities of the company by Directors, Employees and Contractors.
  • The purpose of security trading policy primarily includes assisting Employees, Contractors and Directors by safeguarding them so that there is no breach of the law by engaging in prohibited conduct, which is known as “insider trading”.
  • The objective also includes to help the company mitigate its legal as well as regulatory obligations.

Chairman’s Address to Shareholders

  • The Chairman of the company Ms Elizabeth Bryan, at 2019 Annual General Meeting addressed the shareholders and stated that FY19 has included the last numerous months of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
  • Pursuant to investment portfolio, it was mentioned that IAG has restrained itself from making investments into companies which are engaged in mining thermal coal as per its investment mandate.
  • The company’s investment processes for its equity portfolio exclude or restrict investment in high risk companies with poor climate change risk management. It supports the companies which are improving their performance by decreasing their carbon risk and investing in renewables.
  • At the end of June 2019, then company had $79 million of investment in green/social bonds.

The stock of IAG closed the day’s trading at $7.890 per share on 29th November 2019, flat with respect to the previous close and with a market capitalization of $18.23 billion as on 29th November 2019. The company has generated a total return of -1.38% and -0.38% in the time span of three months and six months, respectively.

Suncorp Group Limited (ASX: SUN)

Suncorp Group Limited (ASX: SUN) is engaged in providing banking, insurance, wealth and other financial solutions to the retail, corporate and commercial sectors.

Capital Notes 3 Offer

  • The company via a release dated 19th November 2019 announced the opening of the Capital Notes 3 offer. The offer will close on 10th December 2019 at 5:00 PM.
  • With respect to the announcement on 15th November 2019, after the successful Bookbuild, an amount of $300 million has been allocated on a firm basis under the Broker Firm as well as Institutional Offers. In addition, the Margin has been set at 3.00% per annum.
  • The total corpus to be raised under the Offer would depend on the volume of applications received and accepted under the Reinvestment Offer and Securityholder Offer.

Key Highlights of UBS Investor Conference

  • The company recently published a presentation, where the key personnel of the company outlined its key priorities for next 18 months and key initiatives and others.
  • With respect to General Insurance business in Australia and New Zealand, the programs of the company primarily include (1) Reinvigorating its multi brand strategy, (2) Maintaining a disciplined approach to underwriting, and (3) continuing to reduce earnings volatility via innovative use of reinsurance.
  • It continues to maintain focus towards meeting the insurance requirement of small business customers by giving a direct business insurance customer proposition as well as making it easy for SME customers to deal with the company via digital channels. The following picture provides an overview of key priorities for FY20:

Also Read: Resignation by CEO and MD Michael Cameron.

The stock of SUN closed the day’s trading at $13.380 per share on 29th November 2019, reflecting a fall of 0.889% with a market capitalization of $17.02 billion as on 29th November 2019. The company has generated a total return of -0.63% and 0.56% in the time span of three months and six months, respectively.


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