Normally the semi-annual profit results from the Commonwealth Bank are fairly staid affairs, with the bank delivering consistent profits with few surprises. However, this reporting season the CBA result will face a far greater degree of scrutiny after the annus horribilis of 2018. Show More
In the AFR today I argue that nobody seems to have noticed that the royal commission's mandate is biased in favour of the imprudent over the parsimonious. It has spent most of its time agonising over the tiny number of "bad" borrowers who defaulted on their interest and/or principal repayments... Show More
CBA’s share price has currently bounced about 1.5 per cent—or $1.8 billion in market capitalisation terms—at the time of writing following news that it has settled the AUSTRAC money laundering litigation for $700 million. Show More
It’s not possible – or at a minimum exceptionally rare – to be able to buy a good company at a good price in a good market. Investors have to be prepared to sacrifice one of these ingredients. Our strong preference is to forgo the latter. In Australian Finance Group... Show More
It would be understandable if investors with large holdings in the four major commercial banks spent much of their time reviewing the recent mixed earnings results and negative newsflow from the Royal Commission. However, the vast amount of negative media and analyst coverage makes it tempting to spend too much... Show More
Since the Royal Commission kicked off hardly a day has gone by without Australia’s largest financial institutions in the news, for all the wrong reasons. Some of the accusations are quite shocking and make for great headlines. Show More
In the AFR I write today that one of the most enduring legacies left by the royal commissionwill be more conservative and risk-averse banks. This process was already underway after the Australian Prudential Regulation Authority (APRA) embraced the 2014 financial system inquiry recommendation that the banks deleverage. (direct AFR link... Show More
Financial services have been making headlines for all the wrong reasons in recent weeks. Following Rowena “Shock and” Orr’s public shellacking of the wealth management industry, AMP Limited has since lost almost its entire board of directors, as well as a big part of the executive team. The banks were... Show More
Wilson Asset Management held their shareholder presentation in Sydney today. Chris Stott, Catriona Burns, and Matt Haupt all took the stage this morning to share their view on the markets, their top themes, and a few stock ideas. Here are the highlights. Show More
The conclusion of our December 2016 Livewire article read... “Such would suggest that the 2015 peak valuations in the Australian banking sector could indeed have marked the top of a multi-decade cycle for Australian banks. The latent risks confronting Australia’s banks appear significant, suggesting a high likelihood that in the... Show More
The Royal Commission into Banking. My lord! But rather than opine over the content, we are interested in the potential impact. Several months ago our economist Tim Toohey estimated the impact on consumer spending when interest only loans switched to principle and interest. We were pleased to see Deputy Governor... Show More
The Royal Commission into the Australian banking system has triggered shocking headlines of abuse, particularly around financial advice. But there is a danger that while the inquiry identifies issues and delivers a regulatory response, it doesn’t get to the core of the problem. Show More
In my AFR column I explain why UBS's banking analyst Jon Mott has jumped to incorrect conclusions in regard to the quality of Westpac's mortgage book (click on that link to read for free or AFR subs can click here for direct access). Excerpt enclosed: Show More
The revelations last week at the Banking Royal Commission illustrate the economic principle that people respond to incentives. Charlie Munger long ago summed this up with “show me the incentive and I will show you the outcome”. The rewards for ripping off customers are substantial, the probability of being caught... Show More
In my AFR column I open-up with both barrels on vertically-integrated institutions (click on that link to read for free or AFR subs can click here for direct access). Excerpt enclosed: Show More
I have to be honest, when the royal commission into the Banking, Superannuation and Financial Services sector was first announced I was skeptical. I thought that the commission would be akin to a “Dog and Pony show” with banking executives grilled for hours about already known scandals and they in... Show More
Well a fair bit happened in the past week. Amazon opened in Australia and there’s been that small issue about a banking royal commission. Graham takes us inside a presentation on behavioural finance and I’ll share some insights from one of Australia’s most respected hedge funds. Show More
In the AFR today I argue that the Royal Commission will give us even more conservative and risk-averse "narrow" or "utility" banks with fewer non-core businesses (bye bye planners, wealth, insurance, funds management and proprietary traders). As with the Austrac saga, the end game is stronger banks with lower risks... Show More