Westpac....the canary in the coal mine?

Discussion in 'Markets & Economies' started by Slimey, Nov 4, 2019.

  1. Slimey

    Slimey Active Member

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    Loans under stress...capital raising....dividend cut.
    Could it be the first sign of bigger things to come?
    Check out this article from August.

    https://www.smh.com.au/business/ban...se-amid-housing-weakness-20190819-p52ijf.html

    You will find reference to a couple of analysts that are blinded. They didn't think to investigate further to determine if the overall financial position of Westpac would effect the dividend....WRONG.
    A cut in dividend and a dilution of the stock.
    It is the job of these analysts to analyse risk. Perhaps if they had of done there job properly instead of shmoozing up to 'Leaders of Industry" they would have kept ahead of the ball instead of dropping it.
     
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  2. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    I read about their AUD2.5bn capital raising earlier on and the issues at hand, inc capital adequacy ratio being just above APRA requirements. Remember, they were one of two Aust banks who got funding (very quietly) from the US Fed in 2009/10 rather than going to the public.

    I also have memories of their near death experience in 1991/92 due to corporate and property lending write-offs (in proceeding years) and what was then the largest ever capital raising in Australia of AUD1.2bn......which if not underwritten by Credit Suisse would have not raised the cash needed. That capital raising (at AUD2.00 a share) also made Kerry Packer a few quid on the way through.
     
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