SINGAPORE – Australia’s recent tensions with China have led more companies to consider diversifying into other parts of Asia – rather than focusing on China alone, said Australia and New Zealand Banking Group CEO Shayne Elliott.
ANZ – one of Australia’s biggest banks – has spoken with companies in Australia and New Zealand about opportunities in Asia, he told CNBC’s Will Koulouris on Thursday.
“One of our messages is: Asia is not just China. There is a big difference between opportunities in Japan, or Korea, or Singapore, or the Philippines or India, and we want to introduce people to that,” said Elliott.
Geopolitically, it opens people’s minds to be a little wiser about Asia’s multiple strategies, than just you know, choosing one place to do business.
Elliott said the latest developments have opened people’s minds to think more about their strategy in Asia.
“There are some good things about the issue recently. Geopolitically, it is opening people’s minds to be a little wiser about multiple strategies in Asia, than just you know, choosing one place to do business,” he told CNBC.
The CEO spoke with CNBC after release of the bank’s full year results, which reported full-year cash profit fell 42% to 3.76 billion Australian dollars. That’s better than the $ 3.51 billion Australian estimate, according to a Reuters poll.
Banks were under pressure as the Australian economy experienced its first recession in 30 years amid the coronavirus pandemic, and interest rates were at record lows.
When asked when revenues will get back on track, Elliot said the banking industry faces “some kind of crisis, fairly regularly” every 7 to 10 years.
“What they really mean is that you suddenly get this shock to our system and customers, whether they are mom and dad, small business, big business, suddenly have all the new needs they didn’t have before … This is actually time is full of opportunity, “he said.
He added: “So I didn’t know that anything would return to normal, I didn’t know that ANZ would ever look what it used to be.”
What will it look like, says Elliott, will be a focus on more digital, data-driven and sustainable finance initiatives.
“That’s what we really have to learn – investing in satisfying those customer needs, which is going to be very, very different,” he said.
ISLAMABAD: Prime Minister Imran Khan Thursday witnessed the signing ceremony of two financing agreements worth $ 1,150 million (Rs187.6 billion) with the World Bank on hydropower and renewable energy development.
Minister of Economy Khusro Bakhtiar, Minister of Electricity Omar Ayub Khan, Chief Minister Khyber Pakhtunkhwa Mehmood Khan and Advisor KP CM Himayatullah Khan attended the occasion.
This is concession financing provided by the World Bank for two projects to support hydropower and renewable energy development in the KP, evacuation and transmission of electricity from the DASU Hydropower Project.
The goal of building the KP Hydropower and Renewable Energy Development (KHRE) project worth $ 450 million is to increase renewable energy generation and strengthen the capacity of relevant institutions in KP.
This project is a transformation program that will assist in building capacity and institutions to harvest the enormous renewable energy potential of KP. This project will support (i) the construction of the Gabral-Kalam 88MW Hydropower Project; and (ii) construction of the 157MW Madyan Hydropower Project. It will provide planning and management capabilities to help transform the Pakhtunkhwa Energy Development Organization (PEDO) into a world-class entity for the development of renewable energy resources.
Evacuation of Electric Power from the $ 700 million DASU Hydroelectric Power Project (Phase-I) aims for the evacuation and transmission of power from the 2.160MW Dasu Hydroelectric Power Project (Phase-I) to the respective Disko load centers with the construction of a transmission line 765KV dual circuit from DASU HPP to Islamabad via Mansehra. It will also facilitate the evacuation of electricity from an upcoming new project in the area.
Noor Ahmed, Secretary, Division of Economic Affairs, signed two loan agreements on behalf of the Government of Pakistan, while representatives of the Khyber Pakhtunkhwa Government, Wapda and the National Transmission and Shipping Company (NTDC) signed their respective project agreements. Najy Benhassine, Country Director, World Bank signs the agreement on behalf of the World Bank.
Imran Khan stated that Pakistan appreciates its partnership with the World Bank and the government will continue with the aim of improving the socio-economic of the Pakistani people. The Director of the World Bank reiterated his commitment to supporting Pakistan and appreciated the government’s determination, efforts and actions in fighting COVID-19 and its continued efforts for structural reform.
Khusro Bakhtiar, while thanking the World Bank for its ongoing support, said that the Government of Pakistan is committed to continuing the structural reform process in the country.
In the middle of the Pacific Ocean are the Marshall Islands – a small archipelago with a population of about 75,000 people. In 2018, his government passed a law that placed the Marshall Islands on the crypto asset map. The introduction of the Sovereign Currency Act allows the creation and issuance of a sovereign (sov) – a new blockchain-based unit of account that will be supported by the finance ministry.
Sov will be a specially created government-issued digital currency
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SYDNEY (Reuters) – Australia’s prudential regulator on Tuesday introduced a new surveillance system to strengthen its focus on non-financial risks for banks, insurance companies and pension funds.
The regulator is updating its model to assess risk due to the emergence and prominence of other prudent risks, such as failure of corporate governance, accountability, culture, remuneration and cybersecurity, he said.
The new “risk and intensity” system will replace the “likelihood and impact of failure” model that has been used by the Australian Prudential Regulation Authority (APRA) since 2002, he said in a letter to banks, insurance companies and funds.
“The new model … and its design features ensure a greater increase in non-financial risk while maintaining the importance of financial resilience,” the regulator said in the letter.
The entity’s score will place it in a five-stage surveillance intensity system, regulators said. Phase 1 will require “routine” supervision, and increased from there.
The regulator said entities will be notified of their new risk rating after the new assessment, which is carried out in secret. Adoption of the new system is expected to be completed by June 2021.
Reporting by Paulina Duran in Sydney; Edited by Simon Cameron-Moore
MILAN (Reuters) – Italian cleaning scheme for Monte dei Paschi in Siena BMPS.MI was set for approval by the state-owned bank’s shareholders on Sunday after two years of planning, but did not appear to be enough to attract buyers.
The government rescued Monte dei Paschi (MPS) in 2017, paying 5.4 billion euros ($ 6.3 billion) for a 68% stake now worth 1 billion euros, which must be sold next year under the 8.2 billion euros bailout terms.
To increase the appeal of the world’s oldest bank still in business, Italy has worked on a scheme to cut MPS’s non-performing loan ratio below the industry average, releasing 8 billion euros in bad debt to state-owned bad loan manager AMCO.
However, to combine MPS with its rivals, the country must also provide adequate compensation for billions of euros in legal claims from investors, said bankers, who inflated bills for Italian taxpayers.
“The Ministry of Finance has a very narrow road ahead. Exiting the MPS at a significant loss would shake the idea of state intervention in the economy. It will be difficult to justify more equity investments in the near future, ”said Stefano Caselli, professor of banking and finance at Milan’s Bocconi University.
To authorize the purge, which shaved 1.1 billion euros off MPS capital and had to be completed by December 1, the European Central Bank has demanded MPS raise new capital through costly issues of Tier 1 and Tier 2 debt.
MPS pays 8.5% for Tier 2 issues, and analysts say that Additional Tier1 (AT1) debt is a non-starter for banks that hope to stay at a loss until 2022 and will not be allowed, thus, to pay coupons on it.
The Treasury Department plans to avoid AT1’s troubles by grabbing a merger deal before Christmas, sources said, but MPS is proving tough sales in an industry whose weak profitability has been hit by the COVID-19 pandemic.
The surprise takeover of Italy’s second healthiest tier bank UBI Banca by heavyweight Intesa Sanpaolo ISP.MI this year it took two potential candidates from the table, leaving the Treasury Department few options, according to people familiar with the matter.
The MPS has not attracted interest from foreign lenders and the Ministry of Finance has seen both UniCredit CRDI.MI and Banco BPM BAMI.MI, respectively, the second and third largest banks in Italy, as potential buyers, the people said.
Someone close to the sales process said UniCredit would be best to take over MPS given its larger size and strong balance sheet.
But any potential buyer would seek to replicate the deal Intesa secured in 2017 when it bought healthy assets from two failed Italian regional banks with one euro tokens, sources said.
In the sale, AMCO took out more than 18 billion euros in non-performing loans and committed to taking another 4 billion if it turned out to be unprofitable. Intesa got 4.8 billion euros in state cash to fully offset the blow to regulatory capital and cover the costs of restructuring.
It also has a public guarantee of 1.5 billion euros against future risks and claims.
Analysts calculated the restructuring costs alone in the MPS deal of 2 billion-3 billion euros. The Ministry of Finance has so far set aside 1.5 billion euros to support the MPS.
A government source told Reuters that the Ministry of Finance wanted to avoid a repeat of the Intesa deal, which complies with EU state aid rules because the two banks were liquidated under national law.
UniCredit, however, was unable to reduce its capital buffer, which CEO Jean Pierre Mustier had worked hard to increase.
UniCredit has put aside the merger and Banco BPM has rejected any interest in MPS.
Sources said the two may still consider a deal on favorable terms, although Banco BPM may now head into merger discussions with France’s Credit Agricole. CAGR.PA.
Caselli of Bocconi University said the Treasury may have to rethink how to find buyers quickly.
“The current delay is probably the most sensible solution,” he said.
Italy is in talks with the European Commission to revise plans for restructuring the MPS and possibly extending the 2021 deadline.
MPS has been underestimated over the years of mismanagement, erroneous acquisitions and risky derivatives deals.
It faces 10 billion euros in lawsuits, mostly from disgruntled investors who have lost money in a series of 18.5 billion euros worth of cash calls in the past decade.
MPS expects part of the claim will be dropped and has set aside funds that only cover a small part of the request.
The ruling 5-Star movement has asked the country to keep the MPS and Prime Minister Giuseppe Conte has delayed signing a decree paving the way for a bad loan spinoff.
Two sources with knowledge of the matter said a compromise had been found and that all necessary documents would be prepared by a shareholder meeting on Sunday.
($ 1 = 0.8522 euros)
Additional reporting by Giuseppe Fonte and Stefano Bernabei in Rome; Andrea Mandala in Milan; Edited by Susan Fenton