insto - Australian financial markets

Suncorp-Metway announced at full-year net profit of A$780 million, representing a strong year-on-year increase of A$432 million.  The insurance-banking giant, previously one of the most troubled of the large local financial institutions during the GFC, benefited from solid returns in its core insurance business, but its bank operations remain weak.

Westpac chief economist Bill Evans says investors have overdone the Australian bond market rally, which he says has created a 50 percent probability of an RBA rate CUT by the end of the year.

BHP Billiton reported an annual net profit of A$14 billion, its second highest on record, up 16 percent from the previous year, as Chinese growth spurred on renewed commodity demand. CEO Marius Kloppers, while cautious about global growth in the short-term, remained confident about long-term commodity prices, allocating a record A$17 billion for growth projects in the year ahead. “Given the volatile environment we’ve had over the last year, we consider these a very pleasing set of result,” he said.

RBS prices $A1.5bn 3-year fixed/FRN

Royal Bank of Scotland issued A$1.5 billion in a three-year fixed/floating bond, with maturity date 27 August 2013. Details are:

Fixed
A$750 million, coupon 7.25 percent

FRN
A$750 million, coupon 3-month BBSW + 245bps

Going to London to find work at a bank is no longer mission impossible. The UK economy may still be struggling, but financial services job vacancies are picking up, at least for now.
Compared with July 2009, there was a 71 per cent increase in new jobs in London’s financial district in July 2010, according to the most recent survey from recruitment firm Morgan McKinley.

As non-bank lenders seek to fund their mortgage obligations, proposed S&P rating methodology changes could make capital raising more prohibitive in the future for the smaller players in the domestic market.

The prospect of a hung parliament, the first in 70 years, will unsettle financial markets with increased volatility seen in equities, the Australian dollar and bonds when markets open this morning.

BHP Billiton, the world’s largest mining company, made a hostile A$44 billion bid for Canadian fertilizer firm Potash Corporation, laying the foundations for what may become the biggest takeover of 2010. BHP is keen to expand into potash, a crucial ingredient to most fertilizers, with a successful bid transforming it into the market leader in the global fertilizer industry and diversifying its offerings beyond mining.

ANZ said it recorded unaudited underlying profits of A$3.6 billion for the nine months to June, up 26 percent for the corresponding period last year. This puts it on track to deliver earnings above A$4.5 billion for its 2010 financial year, ending September 30. CEO Mike Smith said that its core businesses were performing well against the backdrop of Australia’s “solid” economic performance, continuing Asian growth and the recovery in New Zealand.