There had been significant developments among the three large banks in Australia on 18 December 2019. NAB convened its first Annual General Meeting after the appointment of new CEO. WBC was subject of a class action lawsuit by a law firm. And, ANZ announced the appointment of CEO for NZ business.
Westpac Banking Corporation (ASX: WBC)
In an exchange release on 18 December 2019, Westpac noted that a class action lawsuit notice was served against the bank by Phi Finney McDonald on behalf of WBC’s shareholders, which were in books of the bank for the period between 16 December 2013 and 19 November 2019.
The bank said that the claim had not mentioned any amount sought by the suit, and it emphasises on market disclosure issues which were the subject of AUSTRAC proceedings.
Phi Finney McDonald Statement
According to the law firm, it is acting on behalf of Westpac shareholders in a class action commenced in the Federal Court of Australia. The shareholders include investors who had acquired shares on ASX, NZX and American Depository Receipts on NYSE.
It notes that since the market was made aware of the civil proceedings against the bank in relation to the breaches of provisions under the AML/CTF laws, the stock price of the bank had fallen 7% in between 19 November 2019 to 22 November 2019.
The law firm has alleged that Westpac breached continuous disclosure obligations, and it failed to inform the investors about;
- The bank’s systematic failures in detecting money laundering/terrorism financing risk along with non-compliance of provisions under the AML/CTF laws.
- This non-compliance involved the deficiency in monitoring customer transactions which is clearly reflective of misconduct.
- The bank is now subject of the civil proceedings by AUSTRAC, which could result in a large civil penalty.
The firm also alleged that the bank was engaged in misleading and deceptive conduct by informing the market that it had;
- policies, procedures and controls that ensure the compliance of AML/CTF law, and it was compliant with the provisions made under the laws,
- recognised desired improvements for compliance to the laws, systematic deficiencies were not the cause of failure, and the matters raised by AUSTRAC were disclosed to the market,
- appropriate systems were in place to ensure market disclosure to exchanges, and the bank had met its continuous disclosure obligations.
Moreover, Phi Finney McDonald has alleged that the bank’s share price was artificially inflated due to the aforementioned facts.
On 18 December 2019, WBC last traded at $24.5, down by 0.568% from the previous close. In the past one-month period, the stock is down 6.84 per cent.
National Bank of Australia Limited (ASX: NAB)
NAB had convened its 2019 Annual General Meeting on 18 December 2019. In his first Chairman address, Phil Chronican acknowledged the challenging period in the previous year, demonstrated by the Royal Commission.
The banks are revisiting the remuneration structure for all the employees and removed over 185 fees this year. The Board intends to deliver a substantial internal reform to revamp the culture of the bank.
NAB had 39 recommendations by the Royal Commission, and it has implemented five and work on the rest is underway. Around 1k employees of the bank are engaged in customer remediation work.
The business of the bank remains strong underpinned by small business lending, and core specialisation business–agribusiness and health. Due to the subdued market income and lower margins, the period was soft for Corporate & Institutional Bank.
A low-interest regime impacts the whole industry, and the bank’s net interest margin declined by 7 basis points to 1.78% in the previous year. The chair believes that interest rate measures have lost potency, and the emphasis should be on other reforms, specifically improving business investments.
NAB has been chosen by the Federal Government for its First Home Loan Deposit Scheme to offer mortgages. And, the bank has been making lending efforts in affordable housing, climate change, and emerging technology.
NAB’s CEO also made his maiden AGM appearance this time. In his opening remarks, Mr Ross McEwan stated that he met with stakeholders of the bank, including customers and employees, and the consensus was, to make NAB–a leading bank again.
The bank intends to lift the existing standards, including customer experience, employee engagement, return on equity and productivity and efficiency. He wants to revamp the picture of the bank, starting from customer, asset quality, technology, customer value, to colleagues.
On 18 December 2019, NAB last traded at $25.3, down by 0.667% from the previous close. In the past one-month period, the stock is down 6.74 per cent.
Australia & New Zealand Banking Group Limited (ASX: ANZ)
On 18 December 2019, the bank announced that the Board of ANZ Bank New Zealand Limited had announced the appointment of Antonia Watson as the Chief Operating Officer. She would be the first NZ woman to lead the bank.
In addition to the new role, she would be a Director of ANZ NZ. Also, the appointment of Ms Watson was approved by the Reserve Bank of New Zealand. Since May, she has been working in the capacity of Acting CEO.
Ms Watson would be a member of the Executive Committee, and she would be managing the responsibilities of Pacific as well. In 2009, she joined the bank as a finance controller, progressing through the ranks to become Chief Financial Officer in 2012. Later in 2017, she was appointed as the Managing Director of Retail and Business Banking.
She is a graduate from Otago University with an honours degree in commerce, and she is a qualified accountant as well. And, her previous employers include KPMG in New Zealand, Morgan Stanley in London, Sydney and Budapest.
On 18 December 2019, ANZ last traded at $25.03, down by 0.199% from the previous close. In the past one-month period, the stock is down 0.87 per cent.
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