Showing posts with label banks and bankers. Show all posts
Showing posts with label banks and bankers. Show all posts

Wednesday 31 January 2018

ASIC reveals that AMP, ANZ, CBA, NAB & Westpac unlikely to act in customers' best interests


"The financial advice arms of Australia’s biggest banks have come under fire again, with the corporate watchdog finding their advisers failed to comply with the best interests of customers in 75% of advice files reviewed." [The Guardian, 24 January 2018]

Australian Securities and Investments Commission (ASIC), media release, 24 January 2018:

18-019MR ASIC reports on how large financial institutions manage conflicts of interest in financial advice

An Australian Securities and Investments Commission (ASIC) review of financial advice provided by the five biggest vertically integrated financial institutions has identified areas where improvements are needed to the management of conflicts of interest.

The review looked at the products that ANZ, CBA, NAB, Westpac and AMP financial advice licensees were recommending and at the quality of the advice provided on in-house products.

The review was part of a broader set of regulatory reviews of the wealth management and financial advice businesses of the largest banking and financial services institutions as part of ASIC's Wealth Management Project.

The review found that, overall, 79% of the financial products on the firms' approved products lists (APL) were external products and 21% were internal or 'in-house' products. However, 68% of clients’ funds were invested in in-house products.
The split between internal and external product sales varied across different licensees and across different types of financial products. For example, it was more pronounced for platforms compared to direct investments. However, in most cases there was a clear weighting in the products recommended by advisers towards in-house products.

ASIC noted that vertical integration can provide economies of scale and other benefits to both the customer and the financial institution. Consumers might choose advice from large vertically integrated firms because they seek that firm's products due to factors such as convenience and access, and recommendations of 'in-house' products may be appropriate. Nonetheless, conflicts of interest are inherent in vertically integrated firms, and these firms still need to properly manage conflicts of interest in their advisory arms and ensure good quality advice.

ASIC will consult with the financial advice industry (and other relevant groups) on a proposal to introduce more transparent public reporting on approved product lists, including where client funds are invested, for advice licensees that are part of a vertically integrated business. ASIC noted that any such requirement is likely to cover vertically integrated firms beyond those included in this review. The introduction of reporting requirements would improve transparency around management of the conflicts of interests that are inherent in these businesses.
ASIC also examined a sample of files to test whether advice to switch to in-house products satisfied the 'best interests' requirements. ASIC found that in 75% of the advice files reviewed the advisers did not demonstrate compliance with the duty to act in the best interests of their clients. Further, 10% of the advice reviewed was likely to leave the customer in a significantly worse financial position. ASIC will ensure that appropriate customer remediation takes place.

Acting ASIC Chair Peter Kell said that ASIC is already working with the major financial institutions to address the issues that have been identified in the report on quality of advice and management of conflicts of interest.

'There is ongoing work focusing on remediation where advice-related failures have led to poor customer outcomes, and the results of this review will feed into that work,' said Mr Kell.

ASIC is already working with the institutions to improve compliance and advice quality through action such as:
 
* improvements to monitoring and supervision processes for financial advisers; and
* improvements to adviser recruitment processes and checks. 
 
ASIC will continue to ban advisers with serious compliance failings.

ASIC highlighted that the findings from this review should be carefully examined by other vertically integrated firms. 'While this review focused on five major financial services firms, the lessons should be considered by all vertically integrated firms in the financial services sector.' 


Background 

The review took place during 2015 to 2017.

The licensees included as part of the review were: 

* AMP: AMP Financial Planning Pty Limited and Charter Financial Planning Limited;  
* ANZ: Millennium 3 Financial Planning Pty Ltd and ANZ Financial Planning; 
* CBA: Count Financial Limited and Commonwealth Financial Planning Limited;
* NAB: GWM Adviser Services Limited and NAB Financial Planning;
* Westpac: Securitor Financial Group Ltd and Westpac Financial Planning.

Monday 18 December 2017

And right-wing politicians still wonder why the general public is in favour of a genuine federal royal commission into banks and bankers?


Is it any wonder reading this that the Australian Government was finally compelled to call  a royal commission into banks and banking practices commencing in 2018.

ABC News, 14 December 2017:

The Commonwealth Bank's ongoing woes around alleged systematic money laundering operations by criminal gangs and terrorists have deepened, with fresh claims the contraventions are continuing.

The allegations were raised as AUSTRAC filed a further 100 alleged breaches of Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) as part of the existing Federal Court proceeding being run by the Government's financial transactions watchdog.

In one case, a client who had been convicted of terrorism charges in Lebanon, and was known to have tried to organise funding for terrorist acts in Australia, was given 30 days' notice of the closure of his CBA account before AUSTRAC was even alerted.

He also managed to withdraw funds from the account more than a week after it was supposedly closed.

"On 20 July 2017, CommBank erroneously processed a transfer of $5,000 from CommBank Account 184 [the alleged terrorist funder] to an account held by Person 138 [his brother] in Lebanon in spite of suspecting terrorism financing in relation to an identical attempted transfer on 19 June 2017," AUSTRAC's new court statement alleged….

Royal Commission Into Misconduct In The Banking, Superannuation And Financial Services Industry, Draft Terms of Reference, 30 November 2017.

Friday 1 December 2017

Pressure mounted in Australia for a royal commission into banks and Turnbull caved


It would appear that some federal government MPs and senators are becoming nervous about their party’s chances at the next general election and are looking for ways to appease the electorate.

So the politically insecure Australian Prime Minister and former merchant banker Malcolm Turnbull announced a Royal Commission into the alleged misconduct ofAustralia’s banks and other financial services entities in order to appease theses nervous nellies on his backbench.

Having been dragged kicking and screaming to this point Turnbull has made quite sure that the carefully worded Terms of Reference hides a scorpion with considerable sting in its tail:

1. c) the use by a financial services entity of superannuation members’ retirement savings for any purpose that does not meet community standards and expectations or is otherwise not in the best interest of members;

This opens the door for a sustained assault over the twelve months this commission is sitting aimed directly at the sixteen industry-based superannuation funds.

These low-fee super funds are supported by Australian unions and, it is no co-incidence that eight of the top 10 list for the 10 years to 30 June 2017 are industry funds.

Industry superannuation funds which the Turnbull Government wants to see transferred to the control of the big four banks.

No wonder the banks are now in favour of this royal commission.

It is being observed in mainstream media that; It is noteworthy that the letter to Morrison from the big four bankchairmen and CEOs seems to have been used as the template for the royalcommission announcement.

Brief Background

ABC News, 28 November 2017:

The calls for a full inquiry have been relentless for years, emanating from a broad section of the community — from farmers, small business and households, jaded and disillusioned with the industry's rampant profiteering, fee gouging and blatant disregard for the law.

How many times can a Commonwealth Bank chairman sincerely apologise for a yet another breach of trust? What, pray tell, will be the cause of next year's?

But the overwhelming reason for an inquiry rests on just one principle — accountability.

What has been forgotten in the endless round of scandals in recent years is that the Australian banking sector is a taxpayer subsidised industry.

It's an industry that pays ridiculously bloated salaries to its leaders; that showers itself with massive bonus payments when profits are soaring but instantly demands taxpayer protection and support when the tide turns. More on that later.

A summary of bank transgressions during the past decade compiled by former Deutsche Bank analyst Mike Mangan at https://assets.documentcloud.org/documents/4310476/A-Summary-of-Bank-Transgressions-During-the-Past.pdf.

The Guardian, 28 November 2017:

A majority of Australians would support a royal commission into the banks, with this week’s Guardian Essential poll showing 64% in favour, including 62% of Coalition supporters.
With Barnaby Joyce holding out the prospect that the Nationals might formally support an inquiry into the banks when the party room meets next week, and with dissident parliamentary numbers for the proposal building, the new poll finds public support for a banking royal commission has stayed constant for two years.

Support is highest among Labor voters at 72%, and people intending to vote for someone other than the major parties (71%), but there is also clear majority support among Coalition voters and Greens voters – 62%.

ABC News, 28 November 2017:

It seems inevitable that a bill calling for a wide-ranging inquiry into banks, insurers and superannuation providers would pass the Federal Parliament, after another Nationals MP pledges support for it.

Llew O'Brien is one of the fresher faces in the 45th Parliament, but he has parachuted himself into the political spotlight by confirming he would back the proposal from Nationals Senator Barry O'Sullivan.

Mr O'Brien gave his support on the condition the inquiry investigate discrimination by financial institutions against people with mental health problems.

The Australian, 24 November 2017:

Liberal National Party senator Barry O’Sullivan will move a ­motion in the Senate next week to establish a powerful probe into the financial services sector, staring down government opposition and criticism from former prime minister John Howard.

Senator O’Sullivan yesterday hit back at Mr Howard’s labelling of his proposed bank probe as “rampant socialism” after circulating a draft bill to establish a commission of inquiry into the banking sector.

Tuesday 28 November 2017

Australians to own their own banking, energy, phone and internet data? How wonderful! Except.....


Read the news coming out of Canberra…..

Assistant Minister for Cities and Digital Transformation and Liberal MP for Hume Angus Taylor, media release, 26 November 2017:

Australians to own their own banking, energy, phone and internet data

The Turnbull Government will legislate a national Consumer Data Right, allowing customers open access to their banking, energy, phone and internet transactions.

Australians will be able to compare offers, get access to cheaper products and plans to help them ‘make the switch’ and get greater value for money.

Assistant Minister for Cities and Digital Transformation Angus Taylor said it was the biggest reform to consumer law in a generation.

“Government is pursuing the very simple idea that the customer should own their own data. It is a powerful idea and a very important one,” Assistant Minister Taylor said.

“Australians have been missing out because it’s too hard to switch to something better. You may be able to access your recent banking transactions, or compare this quarter’s energy bill to the last, but it sure isn’t quick or easy to work out if you can get a better deal elsewhere.”

The Consumer Data Right was one of 41 recommendations from the Productivity Commission’s Data Availability and Use Inquiry, tabled in parliament in May this year.

The Government’s formal response to the inquiry will be published in coming weeks.

“It won’t be far down the track when you can simply tap your smartphone to switch from one bank to another, to a cheaper internet plan, or between energy companies.

Government is lifting the lid on competition in consumer services and technology is the enabler,” Assistant Minister Taylor said.

Following on from the Prime Minister’s recent agreement with electricity retailers, and the Treasurer’s open banking initiative, the Consumer Data Right will be established sector-by-sector, beginning in the banking, energy and telecommunications sectors.

Utilities will be required to provide standard, comparable, easy-to-read digital information, that third parties can readily access. New Commonwealth legislation to give effect to these reforms will be brought forward in 2018. [my yellow highlighting]

Take a minute to feel good about this.

Then realise that not all the publicly or privately held digital data retained about you will actually be ‘owned’ by you.

If anything it appears that individuals will have a limited joint right to certain data and what access to data they have will probably attract a fee to view and/or download.

It is also likely that data held about you by the banking, energy, phone and internet sectors will be transferred to third parties even when you prefer this didn't happen. It may become a condition of changing service providers as it will likely give the new provider a wealth of information about you and your credit rating.

It is also highly likely that the new legislation will allow third parties to access, disclose and trade in data sets and/or consumer data - without consumers necessarily being made aware this is occurring.

Eventually the Turnbull Government's consumer data rights along with those third party rights will apply to all sectors, including the insurance industry.

If you are interested in some background reading start with the Australian Productivity Commission’s March 2017 report here.

Tuesday 8 August 2017

"Which Bank?" Allegations of est. 1,610 suspect financial transactions possibly involving money laundering or terrorism funding


Calls for a royal commission into banks and banking practices will probably grow louder.......
ABC News, 3 August 2017:
The Australian Transactions Reports & Analysis Centre (AUSTRAC) today launched civil proceedings in the Federal Court alleging that the Commonwealth Bank failed to comply with the law on 53,700 occasions.
The allegations follow an AUSTRAC investigation into the CBA's use of intelligent deposit machines (IDMs) between November 2012 and September 2015.
The maximum penalty for each of the 53,700 contraventions is up to $18 million.
The potentially massive penalties would dwarf a $45-million fine imposed on Tabcorp earlier this year for failing to comply with anti money laundering and terror financing laws…..
The transactions in question had a total value of around $624.7 million.
ABC News, 7 August 2017:
The Commonwealth's allegations about the extent of the breakdown of CBA's legal obligations are breathtaking.
Reading between the lines in the statement of claim, it would appear Australian Federal Police (AFP) investigating at least four money-laundering syndicates discovered Austrac had no transaction records on those they had under surveillance.
In August 2015, CBA provided authorities with details on two of those missing transactions. Clearly, that caused panic within the bank. For just a month later, it sent Austrac details of a further 53,504 transactions dating back three years where $10,000 or more had taken place.
At least 1,604 of those late filings related to criminal gangs. Even more alarming, a further six filings related to five customers the bank itself had identified as posing a terrorism risk. But, incredibly, it didn't report them.
That is not the end of it. According to the statement of claim, the bank continued to facilitate transactions for drug syndicates even after being alerted by the AFP.
Even as late as January this year, 18 months after the breaches were first discovered, it is accused of failing to report suspicious transfers totalling $320,000 over five days.
The calamity is being sheeted home to the installation of whiz-bang new machines, intelligent deposit machines.
These accept cash or shares, count the money and then deposit it into a CBA account. From there, it can be sent almost instantly to anywhere in the world. And the neat thing, from a criminal or terrorist viewpoint, is that you do not have to be a CBA customer to do it.
Not only that, they would take up to $20,000 at a time. The machines may be intelligent but, sadly, no-one at the bank seemed to give a second thought to the reporting duties, either around the $10,000 limit or to look out for "structured" transactions — those attempting to fly just under the radar with slightly smaller amounts.
When they were first introduced in 2012, they proved popular. Almost $90 million went through in the first six months. That has since risen to around $1 billion a month.
As the debacle unfolded last week, the other banks — all of which have introduced similar machines — were keen to distance themselves from the drama, even if ANZ boss Shayne Elliott lamented that all would suffer.
Each said they had removed "non-compliant machines", whatever that means. For it is not the machines that are at fault. It is the oversight that has failed.
Interestingly, each of the CBA's three main rivals were keen to emphasise that their machines would accept a maximum of $5,000. In effect, that means no single transaction would ever come close to the reporting limit, thereby letting them off the hook……
The odds on a royal commission have now shortened dramatically, for the Turnbull Government's resolve to resist one must now be spent.
Not only that, the banks have lost any moral ground they may have thought they had in opposing the Federal Government levy.
If recent history is anything to go by, the bank and its leaders merely will attempt to pretend it is all a media beat-up and it is business as usual.
There will be the usual contrite statements, the promises of improving systems to ensure there is no repeat, an internal inquiry no less, most likely as early as this week when Mr Narev unveils a $9.8 billion profit.
This time, however, the attack will not be so simply to parry. It is not an angry but disorganised customer base baying for blood. These are issues of national security and the prospect of a concerted legal assault by the Australian Government solicitor.
Hold the bonuses? The fallout is likely to be somewhat larger.
Commonwealth Bank, ASX announcement, 4 August 2017:

Commonwealth Bank response to media reports regarding AUSTRAC civil proceedings

Friday, 4 August 2017 (Sydney):

Commonwealth Bank of Australia notes the media coverage of the civil penalty proceedings initiated yesterday by AUSTRAC for alleged non-compliance with the Anti-Money Laundering and Counter-Terrorism Finance Act 2006. The matter is subject to court proceedings. We are currently reviewing AUSTRAC’s claim and will file a statement of defence. We will keep the market informed of any updates in compliance with our disclosure obligations.

Thursday 4 May 2017

How soon will Adani go broke in the Galilee Basin?


Reading the information set out below leads me to wonder how the Federal Government and Queensland Government will cope, both politically and economically, if the Adani Group's Carmichael Mine and Rail Project leads to a massive derelict mine site with its twenty-six Australian subsidiaries under administration or in receivership.


2013


The Adani Group is highly geared:
 Against an external market capitalisation of US$5.17bn, The Adani Group has an estimated US$12bn of net debt, a significant portion of which is US$-denominated with limited hedging.
Adani Power is of particular concern, being loss-making with net debt over 300% of its current market capitalisation.

2015


The project would require a massive and improbable infusion of debt, but a growing number of global banks key to most major coal-mining investments have eschewed it, mostly because of the risk it would pose to the Great Barrier Reef. (The 11 banks that have taken a public pass on the project include Deutsche Bank; HSBC; Royal Bank of Scotland; Barclays; Morgan Stanley; Citigroup; Goldman Sachs; JP Morgan Chase and most recently Societe Generale, BNP Paribas and Credit Agricole. In May 2015 Bank of America announced it would move to exit coal lending entirely.


With the Carmichael coal proposal commercially unviable at current or forecast thermal coal prices, the project is increasingly unbankable. Fifteen of the world's largest financial houses have either ceased working on this proposal or ruled out involvement, including both CBA and Standard Chartered, where advisory mandates have expired.

Continued momentum in technological developments underpins the scaled up commercial rollout of renewable energy and energy efficiency globally. As such, the strategic 'moment' for large-scale export-focused greenfields coal mines has passed.

2017


Shareholders and financiers of Adani Enterprises face substantial risks due to the company's continuing development of the controversy-plagued Carmichael coal project in the face of major adverse structural shifts in market conditions.

The proposed mine, in Australia's remote Galilee Basin, remains a high-cost, high-risk project that is reliant on substantial public subsidies for it to be remotely financially viable. Even with concessional loans, IEEFA analysis shows the project is likely to be cash flow negative for the majority of its operating life.

Shifts in Indian energy policy and pricing have materially increased the risk of Carmichael becoming a stranded asset. Legal challenges and community opposition to the project persist and are likely to escalate if the project moves to construction.

With a market capitalisation of just US$1.9bn and net debt of US$2.5bn, Adani Enterprises Ltd will struggle to contribute equity for this A$5bn project. The project risks over-extending the balance sheet of Adani Enterprises to an extreme degree, creating a high level of financial risk to both shareholders and potential financiers……

In the years since Adani purchased the lease for the Carmichael mine, Indian government energy policy has shifted radically. Energy Minister Piyush Goyal has stated repeatedly that it is government policy to cease thermal coal imports—a policy that brings into question the very point of the proposed mine…..

* The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute's mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.
The Institute for Energy Economics and Financial Analysis receives its funding from philanthropic organizations.  We gratefully acknowledge our funders, including the Rockefeller Family Fund,  Energy FoundationMertz-Gilmore FoundationMoxie FoundationWilliam and Flora Hewlett FoundationRockefeller Brothers FundGrowald Family FundFlora Family FundWallace Global Fund,  and V. Kann Rasmussen Foundation.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Hindu, 5 May 2016:

"PSU banks are owed about Rs 5 lakh crore by corporate houses and of this roughly Rs 1.4 lakh crore are owed by just five companies, which include Lanco, GVK, Suzlon Energy, Hindustan Construction Company and a certain company called the Adani Group and Adani Power," he said.

The amount owed by this group "called the Adani Group" both in terms of its long term and short term debt on Thursday is around Rs 72,000 crore, he added quoting reports.
"Yesterday it was mentioned that the entire amount that the farmers need to pay as crop loans is Rs 72,000 crore. The Adani Group itself owes to the banks Rs 72,000 crore," he said.

The Hindu, 8 May 2016:

The billionaire Gautam Adani's Adani group, with Rs 96,031 crore debt [est. AUD $1.9 billion], is under pressure to sell its stake in the Abbott Point coal mines, port and rail project. The Adani Group's debt stands at Rs. 72,000 crore [est. AUD $1.4 billion]. Last year, Standard Chartered bank had recalled loans amounting to $2.5 billion as part of its global policy of reducing exposure in emerging markets. Global lenders have backed out from funding the $10-billion coal mine development project. State Bank of India has also declined to offer a loan despite signing an MoU to fund the group with $1 billion. An Adani spokesperson declined to offer any comments on the issue.


S&P Global Ratings revised its outlook on Adani Ports and Special Economic Zone Ltd. (APSEZ) to negative from stable. 

ABC News, 22 December 2016:

The business behind the planned Carmichael coal mine in North Queensland is facing multiple financial crime and corruption probes, with Indian authorities investigating Adani companies for siphoning money offshore and artificially inflating power prices

Companies under scrutiny for the alleged corrupt conduct include Adani Enterprises Limited — the ultimate parent company of the massive mine planned for the Galilee Basin.

Two separate investigations into allegations of trade-based money laundering by Adani companies are underway — one into the fraudulent invoicing of coal imports and the other into a scam involving false invoicing for capital equipment imports.

"They are very serious allegations and they are being conducted by the premier Indian government agency investigating financial crime," Australia's foremost expert on money laundering, Professor David Chaikin of the University of Sydney, told the ABC.

"The allegations involve substantial sums of money with major losses to the Indian taxpayer."

Adani denies wrongdoing.

Rediff, 10 January 2017:

For the past year, Adani Power has been undergoing an overhaul for its debt, including measures such as equity infusion and refinancing. These have helped the company survive the rough times since proceeds from the compensatory rates are yet to come by. 

The firm expects its recent equity infusion, debt refinancing and the compensatory rate to lead to a turnaround in its financial position….

On December 6, the Central Electricity Regulatory Commission granted a compensatory rate for Adani Power's Mundra unit on the grounds of changes in Indonesian coal policy and shortage of domestic coal. 

In the address to analysts, after the September quarter results, the management said: "Once we have clarity in the form of CERC orders, we would obviously have the reason to work with the rating agencies and then we will make our plans."

The CERC order, however, has not led to any change of credit ratings so far for the company as its implementation hinges on the required Supreme Court approval for the same. 

CatchNews, 14 February 2017:

Earlier this year, the State Bank of India reportedly approved a loan of around $1 billion (Rs 6,600 crore ) for the company's coal mine in Australia. However, after much hue and cry in the media due to the highly stressed balance sheet of the public sector bank, the approval was withdrawn.

Hindustan Times, 11 April 2017:

The Supreme Court on Tuesday set aside an order by the Appellate Tribunal For Electricity allowing compensatory tariff to Tata Power Ltd and Adani Power Ltd, sending down shares of both companies.

Shares of Tata Power reversed early gains to fall as much as 6.78%, while Adani Power slumped up to 20% to its lowest since February 21.

The tribunal, in April last year, had said the two companies needed to be compensated as the change in Indonesian laws on coal export prices were outside the control of these companies.

Financial Review, 11 April 2017:

Indian billionaire Gautam Adani has told Malcolm Turnbull his company will seek a taxpayer-funded concessional loan of up to $1 billion to support his proposed $21.7 billion coal mine in Queensland......
Following a meeting with Mr Adani and his executives in New Delhi on Monday night, Mr Turnbull cautioned the loan – to help build a $2 billion railway line to link the mine to the coast – would have to be approved on its commercial merits by the independent board which administers the $5 billion Northern Australia Infrastructure Fund.

The Northern Star, 16 April 2017:

Shares for Adani Power Limited, the Adani Group subsidiary energy provider in India, were trading at 44.25 rupees (AU$0.9) on Monday, but dropped to 32.90 rupees by the end of trading on Friday.
Adani Enterprises, the subsidiary connected with the Carmichael Coal project, traded on Monday for 120.10 rupees ($AU2.46) a share, but has also dropped, reaching 116.85 by the end of Friday.


….the International Energy Association’s (IEA) modelling indicates that under a two degree scenario thermal coal demand will peak in the current decade and decline thereafter…..

However, for new thermal coal proposals we will: Limit lending to any new thermal coal mines or projects (including those of existing customers) to only existing coal producing basins and where the calorific value for that mine ranks in at least the top 15% globally. We define the top 15% as having a specific energy content of at least 6,300 kCal/kg Gross As Received. This value is referred to as the Newcastle high energy coal benchmark.

Tuesday 2 May 2017

Westpac Bank pledges not to finance new thermal coal mines or projects in new coal producing basins


“However, for new thermal coal proposals we will:  Limit lending to any new thermal coal mines or projects (including those of existing customers) to only existing coal producing basins and where the calorific value for that mine ranks in at least the top 15% globally. We define the top 15% as having a specific energy content of at least 6,300 kCal/kg Gross As Received. This value is referred to as the Newcastle high energy coal benchmark.” [Westpac Bank, Climate Change Action Plan, April 2017]

Westpac Bank, media release, 28 April 2017:

* $10 billion target for lending to climate change solutions by 2020 and $25 billion by 2030.

* Tighter criteria for financing any new coal mines. Financing for any new thermal coal projects limited to existing coal producing basins and where the calorific value of coal meets the energy content of at least 6,300kCal/kg Gross as Received – i.e. projects must rank in the top 15% globally.

* Commitment to actively reduce the emissions intensity of the power generation sector, targeting 0.30 tCO2e/MWh by 2020.

* Continued commitment to a broad market-based price on carbon as the most efficient way to encourage emissions reductions at the lowest cost to the economy.
* Setting target to reduce Westpac’s direct footprint emissions (i.e., in our workplaces, across our branch network and IT operations) by 9% by 2020, and 34% by 2030.

* Building on our commitment to helping households become more climate-resilient, improving their energy efficiency, and reducing their environmental impact.

Westpac today released its third Climate Change Action Plan (PDF 1MB), as part of its commitment to helping limit global warming to less than two degrees.

The principles of the updated plan reflect a scientific, practical approach around lending to energy intensive and renewable sectors as well as reducing Westpac’s own carbon footprint. Westpac has had a clear and consistent approach to climate change since releasing its first climate change statement almost a decade ago.

Westpac CEO Brian Hartzer said: “Westpac recognises that climate change is an economic issue as well as an environmental issue, and banks have an important role to play in assisting the Australian economy to transition to a net zero emissions economy.

  “Limiting global warming will require a collaborative effort as we transition to lower emissions sectors, while also taking steps to help the economy and our communities become more resilient.
“As a major lender Westpac is committed to supporting climate change solutions that will drive the transition to a more sustainable economic model, and we have increased our lending target for this sector from $6.2 billion to $10 billion by 2020 and to $25 billion by 2030.

  “At the same time we recognise that energy security is essential for the long term economic health of Australia. That is why Westpac is committing to actively reducing the emissions intensity of our exposure to the power generation sector over time, and we have a target to reduce this portfolio to 0.30 tCO2e/MWh by 2020.

“In addition, we will limit lending to new thermal coal projects to existing coal producing basins only, and where the energy content of the coal ranks in the top 15% globally,” he said.

Westpac is also committing to help Australian households become more climate-resilient, improve their energy efficiency, and reduce their environmental impact.
Westpac was the first Australian bank to release a climate change statement in 2008, and was named the world’s most sustainable bank by the Dow Jones Sustainability Index for the ninth time in 2016.

Westpac’s principles-based approach to climate change is summarised below. These principles are based on a scientific approach, building on the scenario analysis undertaken in 2016 as reported in Westpac’s 2016 Sustainability Report.
Our Principles
Our Actions
1. A transition to a net zero emissions economy is required
1. Provide finance to back climate change solutions 
2. Economic growth and emissions reductions are complementary goals
2. Support businesses that manage their climate-related risks
3. Addressing climate change creates financial opportunities
3. Help individual customers respond to climate change
4. Climate-related risk is a financial risk
4. Improve and disclose our climate change performance
5. Transparency and disclosure matters
5. Advocate  for policies that stimulate investment in climate change solutions  

To date it does not appear that the Adani Group has approached Westpac in relation to the Carmichael Mine and Rail Project in the Galilee Basin, Queensland.

It is noted that there is no firm guarantee that all Adani project infrastructure would be barred from financing through the bank – although so many people across Australia are hoping that such a prohibition exists.

Concerned citizens need to keep an eye on the ball, because it is possible that the Turnbull Government will begin to pressure Westpac concerning its firmer policy on climate change.

Wednesday 29 March 2017

New campaign warns industry super members and consumers of bank attempts to dismantle successful superannuation model


Medianet Release
  MEDIA RELEASE
20 March 2017

Keep bank ‘foxes’ out of the super henhouse, new campaign warns

A powerful new campaign warns industry super members and consumers of bank attempts to dismantle the model used by the most successful part of the superannuation system, and put at risk the retirement savings of millions of Australians.

At the centre of the Industry Super Australia campaign is a 30-second television segment which depicts the hand of a federal politician opening a hen house to waiting foxes. The tagline is “Banks aren’t super”.

The commercial responds to bank attempts to secure unfettered access to Australia’s default superannuation system for those who don’t choose their own super fund.

To achieve this, government would be required to dismantle the Fair Work Commission’s merit-based process of shortlisting workplace default funds for employees who are otherwise disengaged from the super system. 

These mostly not-for-profit default funds consistently outperform the retail super products sold by banks and others, ultimately leaving their members in a stronger financial position at retirement.

Industry Super chief executive, David Whiteley, said: “The banks are quietly pressuring federal politicians to remove the laws that protect Australians who save through workplace default funds”.

“Not-for-profit industry super funds have consistently outperformed bank-owned retail funds by almost 2 per cent per year over the past twenty years[1][1]”.

“If the banks succeed in bringing the default system down, the super savings of millions of Australians could be at risk,” he said.

Research conducted ahead of the campaign shows strong public distrust for banks             when it comes to super.

“The 5 million Australians who entrust their savings to an Industry Super fund expect us to call out exactly what the banks are up to - and our politicians to stare them down,” said Whiteley.

The advertisement broadcasts from Monday 20 March, 2017. View it here

In 2016, the federal government tasked the Productivity Commission with exploring alternative ways of allocating default super fund products. The Commission’s baseline is for a system with no defaults. A draft report is expected in the coming fortnight.

The government has also vowed to reintroduce a bill, defeated by the senate in 2015, that will change the way not-for-profit super funds are governed so they are more like the banks.

Industry Super Australia Pty Ltd ABN 72 158 563 270, Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514. Consider a fund’s Product Disclosure Statement (PDS) and your personal financial situation, needs or objectives, which are not accounted for in this information, before making an investment decision.) Past performance is not a reliable indicator of future performance.


Distributed by AAP Medianet

[1][1] Source: ISA analysis of APRA Superannuation Statistics