insto - Australian financial markets

Crises create challenges, but also opportunities, and Insto’s 2009 Banker of the Year Mike Smith has made the most of finding opportunities in turbulent times and positioning his institution for exciting growth.

Financial Services Minister Chris Bowen, perhaps frustrated at ASIC’s lack of success in the court room over 2009, is proposing wideranging powers and beefed up penalties to stamp out insider trading and other market misconduct.

New Australian Bankers’ Association head Steven Munchenberg has been very restrained in his comments since his appointment was announced, but that may be because he is still under contract to his outgoing employer, the NAB.

Macquarie headaches

Macquarie Group has problems in the property sector after the refusal of banks to roll over nearly US$100 million of debt held by the listed Macquarie DDR Trust, the owner of mid-sized shopping centres across the US.
DDR has a combined US$413 million worth of debt due to expire by the middle of next month.
Six banks behind the Head Trust facility have advised DDR they are not prepared to extend loans “on current tersm.”
Talks are continuing.

ANZ gets Indian licence

ANZ has reached an out of court settlement with former institutional banking chief Steve Targett, who sued the bank for A$57 million after being passed over as chief executive.

The case was due to be heard in the Federal Court next week, but the two parties reached agreement to end a two and a half year legal dispute in a move which takes a potential A$57 million liability off the ANZ balance sheet.

Targett left London in 2004 from Lloyds TSB to join ANZ, reporting to former chief John McFarlane.

South Canterbury Finance’s long-term rating has been lowered to BB from BB+ by Standard & Poor’s and placed on CreditWatch Negative due to asset quality deterioration.

Yesterday, the New Zealand finance company announced to shareholders they were suffering high loan-loss provisions.

‘Although the capital injection into SCF will help absorb these bad debt charges, it does not, by itself, restore financial strength to a level that we consider is consistent with a BB+ rating’, said Derryl D’silva, Credit Analyst from S&P.

RBA has increased the cash rate by 25 basis points as expected from 3.75pct to 4pct after its monthly board meeting today. This is a further modest step in RBA’s planned tightening cycle this year.