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Thread: WBC - Westpac

  1. #221
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    Default Corporate Debt Stress Test based on EOFY2019 balance sheet (Data 1)

    Quote Originally Posted by Snoopy View Post

    Westpac averaged Risk Weighted Assets EOFY2019 ($m)


    Asset Categories Risk Weighted Assets {A} Exposure at Default {B} Averaged Risk Weighted Factor {A}/{B}
    Corporate 74,807 139,173 0.54
    From p13 https://www.westpac.com.au/content/d...ember_2019.pdf

    Corporate loans carry an RWA value of:

    $74,807m/$139,173m = 0.54.

    Comparing that 'averaged' figure to the table (below) it looks like the 'typical' loan might be thought of as "A" grade.

    From page 7 https://www.bis.org/bcbs/publ/d424_hlsummary.pdf

    External rating of General Corporate Counterparty RWA Factor
    AAA to AA- 20%
    A+ to A- 50%
    BBB+ to BBB- 75%
    BB+ to BB- 100%
    Below BB- 150%
    Unrated 100%

    Yet even quite respected NZX listed businesses seem to have a significantly lower credit rating than that.

    Contact Energy BBB
    Sky City BBB-
    Skellerup (?)
    Spark A-
    Turners Automotive Group (No rating)

    I have trouble thinking how an 'averaged portfolio of corporate debt' can have an averaged Risk Weighted Asset factor just shy of grade 'A'.

    SNOOPY
    Last edited by Snoopy; 19-05-2020 at 06:59 PM.
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  2. #222
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    Quote Originally Posted by Snoopy View Post
    Next you speak of 'assistance'. What if the assistance is in the form a 'government guarantee' agreeing to repay the bank 80% of the loan if it goes bad? This makes no difference at all to the amount of bank capital needed to support the loan (as I see it). This is because a loan is graded on the likelihood of the loan being repaid in a 'customer operational sense'. So who might bail the lender out eventually, if the loan fails, makes no difference to how the underlying likely 'thin profit margin' customer business model works.
    I wonder if what I had hypothesised above has been manifested in the link below?

    https://www.rnz.co.nz/news/business/...slow-Robertson

    The radio equivalent of this story talked about business having to come up with a two years forward planning forecast as regards cashflows.

    Q/ How do you model cashflows in a post Covid-19 environment?
    A/ Think of a number!

    https://www.newsroom.co.nz/2020/04/2...n-for-business

    ---------

    Financial adviser Graham Smith of Keyman Insurance said emphasis on 'normal lending criteria' was the real problem with the scheme.

    Smith said banks had tightened up their lending criteria before the present crisis on the back of RBNZ restrictions to cool down the housing market.

    He said even if criteria were loosened a notch now, it would still be quite tough for most to meet.

    "The people who are managing to get additional funding, they're having to put assets on the line that they might not have had to in the past," Smith said.

    Smith said before the pandemic, a restaurant owner might have been able to get a loan for his business without needing to use his house as security.

    "Now the banks are saying we'll loan you the money, but now we want full security over your house as well," he said.

    ---------

    Having your house as security reduces the amount of bank equity required to back up the loan. Even a home loan with only a 10% equity deposit (RWAF=0.5) means the bank must hold 33% less capital than it would have to under the alternative scenario of funding the business directly ( RWAF=0.75 (Grade B business subject to business cycle vagaries) )

    The government's support for business loans, shouldering 80% of any capital lost -should it fail-, doesn't seem to help the equity required at the bank to back the loan up.

    SNOOPY
    Last edited by Snoopy; 19-05-2020 at 02:54 PM.
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  3. #223
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    Barramundi increased their weightings in the Australian banks, ANZ, CBA, NAB and Westpac in the middle of March
    Last edited by peat; 24-04-2020 at 12:11 AM.
    For clarity, nothing I say is advice....

  4. #224
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    And I've recently added a few more ANZ and WBC too.

  5. #225
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    Default Corporate Debt Stress Test based on EOFY2019 balance sheet (Data 2)

    Quote Originally Posted by Snoopy View Post
    From p13 https://www.westpac.com.au/content/d...ember_2019.pdf

    Corporate loans carry an RWA value of:

    $74,807m/$139,173m = 0.54.

    Comparing that 'averaged' figure to the table (below) it looks like the 'typical' loan might be thought of as "A" grade.

    From page 7 https://www.bis.org/bcbs/publ/d424_hlsummary.pdf

    External rating of General Corporate Counterparty RWA Factor
    AAA to AA- 20%
    A+ to A- 50%
    BBB+ to BBB- 75%
    BB+ to BB- 100%
    Below BB- 150%
    Unrated 100%

    Yet even quite respected NZX listed businesses seem to have a significantly lower credit rating than that.

    Contact Energy BBB
    Sky City BBB-
    Skellerup (?)
    Spark A-
    Turners Automotive Group (No rating)

    I have trouble thinking how an 'averaged portfolio of corporate debt' can have an averaged Risk Weighted Asset factor just shy of grade 'A'.
    I have had some more thoughts on why the RWA factor for 'corporate' debt is so low.

    The 'corporate' header is defined in the footnotes on p43 of the HY2020 result release as debt that:

    "typically includes exposure where the borrower has annual turnover greater than $50 million, and other business exposures not captured under the definitions of either Business lending or Small Business."

    There is no separate category for 'Commercial Property' in the 'Westpac Pillar 3 Report' from December 2019, which references the earlier end of the full year period of FY2019 (on date 30th September 2019). So I wonder if 'Corporate Owned Commercial Property' is included in 'Corporate Loans'?

    Commercial Real Estate (CRE) Exposure 'Loan to value' ratio RWA Factor
    <60% min(60% or RW of Counterparty)
    >60% RW of Counterparty

    Note that the above reference to commercial real estate refers to real estate owned for the owners use. Real Estate owned to rent out has a different RWA scale, which requires the bank to hold more capital against such commercial loans. Provided the loan value ratio is under 60%, then the RWA factor can be 60%. Depending on the size of the commercial property portfolio owned by corporates, such loans could help reduce the RWA factor of a 'corporate loan portfolio'.

    Total commercial property exposure as at 30th September 2019 was quoted as $66.9billion (p86 of FY2019 Presentation and Investor Discussion Pack).

    SNOOPY
    Last edited by Snoopy; 19-05-2020 at 08:53 PM.
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  6. #226
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    Default Provisioning for HY2020 (Part 2)

    Quote Originally Posted by Snoopy View Post
    I finally got around to seeing the HY2020 pre-result provisioning as announced in the 14th April 2020 Press Release update.

    Provisioning for HY2020

    Item Value Notes
    Internal Incremental Crime Fighting provision $80m (Tax deductible)
    Wrongly categorised business loan refunds $105m (Tax deductible)
    Missed collective court settlement + Refund of Wealth fees $130m (Tax deductible)
    Incremental remediation program cost $90m (Tax deductible)
    Litigation Matters $40m (Tax deductible)
    Capitalised Software Value Adjustment $100m (Tax deductible)
    Disentangling Westpac Life Insurance Services from BT Super $100m (Tax deductible)
    Bushfire Insurance Claims (Operational but Unusual) $140m (Tax deductible)
    Total Tax deductible Provisions $785m
    After Tax Effect (Total Tax deductible Provisions x 0.7) $550m
    AUSTRAC paedophile enabling punishment provision (Court to Determine) $900m (Not tax deductible, ref HY2020 Results p16)
    Total After Tax Provisions $1,450m

    However, the telling first line in this press release is that all this 'excludes impairment provisions'. That sounds ominous. According to my own impairment estimates to date, current ECL (Expected Credit Losses) already set aside may cover most of these. But I wonder if these provisions are exhausted, whether Westpac must immediately re-provision on a similar scale in expectation of future crises yet to materialise (in reality a continued slide down the existing COVID slide beyond this year's provision?) Anyone know?

    Provisions relating to the AUSTRAC civil proceedings have been expensed as costs, Provisions in relation to the Expected Credit Loss model and by extension Covid-19 are added to the 'impairment provisions' in the accounts.
    Westpac have now released the impact of their Covid-19 doubtful debt provisions for the half year. These are separate from the previously announced unrelated provisions in 'Provisioning for HY2020 (Part 1)'.

    However this is not likely to be the end of Covid-19 adjustments. From p1 of the HY2020 result release:

    "Given that COVID-19’s economic impact only escalated in March 2020, these metrics do not fully reflect the more challenging position beginning to emerge across the economy and its impact on customers."

    The Covid-19 provisions -so far- , combined with the previously declared provisions in Part 1 (my post 220), are as follows:

    Division Impairment Expense Total Net Loans + Provisions {L} %ge of Total Net Loans Impairment Expense + G.B. Reallocated {P} {P}/{L} Reference HY2020 Result Announcement
    Consumer ($A448m) $A390,400m 54% ($A702m) 0.18% (Section 3.1 p53)
    Business ($A805m) $A168,300m 23% ($A913m) 0.54% (Section 3.2 p57)
    Westpac Institutional Bank ($A315m) $A80,800m 11% ($A367m) 0.45% (Section 3.3 p60)
    Westpac New Zealand ($A200m) $A87,500m 12% ($A256m) 0.29% (Section 3.4 p62)
    Group Businesses ($A470m) (Section 2.0 p9)
    Total ($A2,238m) $A727,000m 100% ($A2,238m)

    It is important to realise that these incremental annual impairment adjustments are in addition to any impairment provisions already on the books. The total loan provisions on the books at the end of the FY2020 half year period add to $5,766m (HY2020 Result, Note 10 p113). $5.766m represents the end result of a process, a three scenario weighted probability rated assessment of modelled outcomes:

    1/ bad 40%
    2/ expected 55%
    3/ gentle 5%

    recessionary impacts. This equates to a total portfolio impairment provision rate of:

    $5,766m / $727,000m = 0.80%

    Looked at another way, within the $2,238m total half yearly charge, there is a $1,581m Covid-19 inspired Capital Asset Provision (CAP) adjustment (HY2020 Result, Section 2.2.9), which can be split into two parts.

    1/ Firstly, a $1,135 million increase in CAP is due to a more pessimistic 'weighted scenario analysis' coupled with changes in the macroeconomic forward-looking outlook. This $1,135m is calculated under the ECL (Expected Credit Loss) model (from HY2020 Result Note 10 p115). This current loss provision is centralised on a base case economic forecast. The central aspect to this forecast is for a relatively short and sharp economic impact followed by a subsequent recovery.

    2/ A second tranche of CAP adjustment of $446 million is best described as an increased COVID-19 overlay provision. This is primarily targeted in the future on industries and consumers where an increase in delinquencies, downgrades and defaults (HY2020 Result, Note 10 p116) are to be expected as a result of the economic shut down. Such an overlay will eventually be incorporated within the ECL modelling. But right now the ECL modelling covers only the general deteriorating economic conditions does not include any one off 'shock' effect that individual customers may suffer. Hence the extra $446m provision.

    $1,135m
    + $446m
    = $1,581m

    There is a third category of 'Other net ECL movement adjustments', unrelated to Covid-19. This $560m (HY2020 Result, Note 10 p115) adjustment includes loans migrating from stage 2 (performing) to stage 3 (non-performing). The actual number of 'Non Performing level 3 loans' on the provisioning books (HY2020 Result, Note 10 p113) increased from $1,355m at the last full year balance date of 30-09-2019 to $1,707m at 31-03-2020. This was a net rise of $352m. The actual transfers to stage 3 were $336m (HY2020 Result, Note 10 p114).

    $1,135m
    + $446m
    + $560m
    = $2,141m

    There is (see Section 2.2.9 p32) a separate net $181m Capital Asset Provision (CAP) on 'Individual Assessed Loan Provisions', and a separate summed $2,057m CAP against 'Collectively Impaired Assets'.

    $181m
    + $2,057m
    = $2,238m

    These CAPs (Reference Section 2.2.9 p32, 'First Half 2020 – Second Half 2019' comparison) include $61m in relation to the Australian Bushfires and ongoing drought.

    The remeasurements on the ECL model over the half year (HY2020 Result, Note 10 p114) were made up as follows:

    Balance at 30-09-2019 $3,913m
    add Business Activity During Period $184m
    add Net Revision of Provisions within ECL $2,141m
    less Write Offs ($579m)
    add Exchange Rates and Other Adjustments $65m
    Balance at 31-03-2020 $5,766m

    This is an increase of $1,853m over the half year.

    Note that the new business provisions added during the year and the write offs taken out of the system during the year are distinct from the ECL adjustments made during the year.

    SNOOPY
    Last edited by Snoopy; 01-07-2020 at 06:54 PM.
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  7. #227
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    Default Lost 'Available for Sale' assets found

    Quote Originally Posted by Snoopy View Post
    (6) At EOFY2019 the Pendal share price was $7.39. This represents a capital dollar value of:

    $7.39 x 30.814493m = $227.719m

    So the capital loss for the year was: $227.719m - $270.859m = -$43.140m

    Westpac's share of Pendal's 'Total Comprehensive Income' for the year was $14.993m (refer my post 179 on this thread). Subtract from that the corresponding period dividend money paid out to WBC during the year of $15.576m (refer my post 164 on this thread). This gives the incremental 'retained earnings value' ( $14.993m - $15.576m = -$0.583m ) that must be subtracted from the book value of the asset.

    Change in book value of Pendal shares = $227.719m - $270.859m - $0.583m = -$43.723m

    OR $270.859m - $43.723m = $227.136m.

    The 'Available for Sale' equity securities balance of $134m (AR2019, p176). What can explain this discrepancy?

    The accounting standard for reporting these matters changed over the year, with reporting now under AASB9. I don't understand how the equity securities balance in the 'parent entity' is calculated. But given it was $67m at EOFY2018 (AR2018 p172) and $66m at EOFY2019 (AR2019 p176), this indicates that in the grand picture of things very little has changed. My guess is that at the 'Consolidated' level, this 'missing' equity securities balance has been moved somewhere else within the consolidated accounts. But at the time of writing this, I don't know where!
    It has taken a few months, but today I just may have tracked down the answer to this 'March mystery' (my post 169 on this thread). What seems to have happened is that some 'Available for Sale' (old definition) assets have been reclassified separately as 'Trading Assets'. From AR2019 p149 'Reconciliation of the 'Opening Balance Sheet' (which is actually the 'Closing Balance Sheet' for FY2018).

    FY2018 Balance Sheet Reclassification Re-measurement FY2018 Balance Sheet Restated
    Trading Securities and Financial Assets measured at FVIS(*) $23,132m $275m $23,407m
    Available for Sale Securities $61,119m ($61,119m) $0m
    Investment Securities $0m $60,844m ($9m) $60,835m
    Total $84.251m $0m $84,242m

    {*) FVIS means 'Fair Value through Income Statement'

    'Equity Securities', in particular a subset of that -'Pendal Group'- , make up only a tiny fraction of 'Investment Securities' on the books. But you can't fit $227.1m worth of equity securities assets into a balance sheet allowance of just $134m. It wouldn't make sense to move just half of those Pendal assets over to be 'Trading Securities'. So I have to conclude that the whole lot have been moved.

    Now I move over to Note 10 (AR2019 p174). I can see that 'Other financial Assets measured at FVIS' are listed in a separate category from 'Trading Securities' within the broad classification. That distinction wasn't made clear on the balance sheet. It does appear there is some stuff in the 'Trading Securities bucket' that is not there to be traded. My guess is that the Pendal Group shares are in the 'Other financial Assets measured at FVIS' sub-bucket. There are certainly $344m of equity securities in there. $344m is enough to cover my outstanding balance of Pendal shares totalling $227.1m. So it looks like -finally- I have found where those Pendal shares got moved to. It was a nasty trick though - hiding shares in a one time subsidiary - now the independently listed Pendal- in what is in effect a share trading account. That Trading Securities bucket was something I never thought to look into the first time around back in March.

    SNOOPY
    Last edited by Snoopy; 19-07-2020 at 09:07 PM.
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  8. #228
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    Default Summary: Multi year effect of Pendal on Westpac (by WBC)

    Quote Originally Posted by Snoopy View Post
    Pendal (was BTIM) Shares Held by Westpac

    Pendal Dividend to Westpac (recognised in Westpac income statement) Capital Revaluation Gain (Loss): Pendal over FY Pendal as Associate Book Value EOFY Book Value: Pendal as Available For Sale EOFY Market Value: Pendal as Available For Sale EOFY
    FY2014 $42.568m (1) $0m N/A N/A N/A
    FY2015 $60.771m $1,036m $756m (2) N/A N/A
    FY2016 $34.060m $0m $718m (3) N/A N/A
    FY2017 $37.225m $262.5m N/A $340.5m (4) $341m
    FY2018 $12.523m ($69.6m) N/A $280.1m (5) $271m
    FY2019 $15.576m ($43.1m) N/A $227.1m (6) $228m

    Notes

    (1), (2), (3), (4) (5) and (6): See Post 169 on this thread
    I have been browsing the Westpac 'back catalogue' on this thread and found what must be the worst post I have ever read on Sharetrader. It was long, rambling, mixed up and incoherent in purpose and direction. Then came the ultimate moment of complete embarrassment when I realised that I had written it! Since my 'discovery' I have spent considerable time making a few corrections to my post 169, adding some salient information and generally reading and re-reading it until it made sense, for those who have the fortitude to tackle it (which I realise won't be many). The post still won't win any awards. But the summary of what I wrote is in the table I have requoted above, Then blow me down, when I had finally got to the stage of being able to extricate Pendal from the Westpac accounts, I see that in constructing Westpac's non IFRS 'Cash' accounts and Financial Statements someone from within Westpac has already done the exercise! As Charlie Brown would say "Arrrrrgh!". However all my effort has not been wasted.

    The real point of this exercise was to figure out how 'Subsidiaries', 'Associates' and 'Available for Sale' Investments are treated under Australian accounting rules. I feel that I have a much better grasp of this now. And I have the extra benefit of being able to compare what I did with what Westpac came up with. Here is how Westpac extricated Pendal from their own results. I have referenced and added Westpac's own comments made in the 'Segment Reporting' section of the respective annual reports for some explanation.


    Cash Earnings Adjustments Relating to Pendal Reference
    FY2015 (1) $665m AR2017 p136
    FY2016 (2) $0m AR2017 p136
    FY2017 (3) $171m AR2019 p158
    FY2018 (4) ($73m) AR2019 p158
    FY2019 (5) ($45m) AR2019 p158

    (1) AR2015 p68: "Partial sale of BTIM (Pendal) - During 2015 the Group recognised a significant gain following the partial sale and de-consolidation of the group's shareholding in BTIM. This gain has been treated as a cash earnings adjustment given its size and the fact that it does not reflect on-going operations."

    "The commencement of equity accounting for BTIM resulted in recognition of notional identifiable intangible assets within the investments in associates carrying value. The amortisation of these intangible assets (excluding capitalised software) is a cash earnings adjustment because it is a non-cashflow item and does not affect cash distributions available to shareholders."

    (2) AR2016 p89: "BT Investment Management Limited (BTIM/Pendal) is 29.5% owned by BT Financial Group (Australia) (BTFG) following a partial sale in FY2015, with the business being equity accounted from July 2015. BTFG works in an integrated way with all the Group's (other) Australian divisions in supporting the insurance and wealth needs of customers."

    (3) AR2017 p87: "During FY2017 the group recognised a gain, net of costs, following the further sell down of the group's shareholding in BTIM (Pendal). Consistent with previous treatment, this gain has been treated as a cash earnings adjustment given its size and that it does not reflect ongoing operations."

    (4) AR2018 p97: "In 2018 the group recorded an impairment on its current holding of Pendal shares. Consistent with prior years these items have been treated as a cash earnings adjustment given their size and that it does not reflect ongoing operations."

    (5) AR2019 p94: "Adjustment related to Pendal (previously BTIM): Consistent with prior years treatment, this item has been treated as a cash earnings adjustment given its size and that it does not reflect ongoing operations. From September 2018 this adjustment relates to the mark to market of the shares and separation costs related to the original sell down."

    You will notice a phrase 'cash earnings adjustment' on high repeat in the above notes. The thinking behind this is to remove one off effects, both positive and negative, that are not related to daily running the operations of the WBC business on an on-going basis. I would argue the phrase 'cash earnings adjustment' is poorly chosen. If WBC sells down a significant chunk of Pendal Group, for example, then what they get is cash. Yet this cash is removed from what is termed the cash profit! If WBC had instead used the term 'Ongoing Business Profit' instead of 'Cash Profit', then the whole 'profit correction' thing would be clearer for shareholders.

    -------


    So how did I do?

    The FY2015 and FY2017 capital gains look quite different. But my estimates are before tax. Australian companies have to pay a 30% tax on capital gains.

    $1,036m x 0.7 = $725m

    $262.5m x 0.7 = $184m

    Once tax is taken off, I am only 7 to 9 percent high. I haven't taken into account any sell down costs associated with these transactions. So I am reasonably happy with my calculated estimates. Both of us agree on FY2016 with no capital adjustment booked.

    The figures for FY2018 and FY2019 look close. But if I take tax off my figures:

    FY2018: ($69.6m) x 0.7 = ($48.7m)

    FY2019: ($43.1m) x 0.7 = ($30.6m)

    then they don't look so good. The difference with these two figures, compared to the other two from FY2017 and FY2015, is that no transaction has taken place. They are just 'mark to market' adjustments. So perhaps no tax adjustment is made in the accounts until an actual transaction occurs? That makes sense from my perspective.

    One thing that is a surprise is that there appears to be no allowance made by Westpac for the dividends that were paid to them from their Pendal holdings. I would have thought that if you wanted to wipe Pendal from the performance picture, then you would take out the dividends as well? Then again, when I look at the Westpac accounts
    it is not clear to me where those dividends are detailed (I got my dividend to Westpac information from the Pendal accounts). The best I have been able to say is that they look to be packaged up with other dividends from other sources. So maybe it is too difficult to disentangle these dividends from the Westpac accounts as presented? That is the best explanation I can come up with as to why Westpac has apparently not taken out the dividends paid to it by Pendal.

    SNOOPY
    Last edited by Snoopy; 30-07-2020 at 12:55 PM.
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  9. #229
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    Default Unpicking the WBC Internal Wealth Managment Business BTFG (Part 2)

    Quote Originally Posted by Snoopy View Post

    I am attempting to unpick the 'Wealth Management' side of WBC from what is left.

    "BT Financial Group Australia" , a part of Westpac, is an unrelated business to "BT Investment Management Limited", the listed entity.

    I need to 'unpick the wealth business' because:

    1/ Westpac have reduced their links to the separately listed wealth management arm "BT Investment Management Limited" (BTIM, now renamed 'Pendal Group') to around 10%, with the expectation that this residual holding will be sold.

    2/ Westpac have also disestablished their internal wealth management division "BT Financial Group Australia".

    This means historical comparisons are going to be difficult from here on in. Westpac have redone their comparatives for FY2018 and FY2017 to account for this latter change at least. But I want to do the full exercise for FY2016 and FY2015 as well.

    So let's get on with this unpicking exercise...
    -------

    On the FY2018 WBC balance date of 30th September 2018, the Westpac internally owned and managed fund business arm was still called "BT Financial Group Australia"!

    By EOFY2019, what was the Westpac division "BT Financial Group Australia" has been split up and the business sub units reallocated within other Westpac divisions. The effect of this can be demonstrated by looking at two different reporting perspectives the reallocation of FY2018 earnings between Westpac divisions in accordance with the table below:

    Westpac Business Unit Cash Earnings FY2018 (from AR2019 p157) FY2018 (from AR2018 p155) Difference
    Consumer Bank $3,423m $3,140m +$283m (+9.0%)
    Business Bank $2,756m $2,159m +$597m (+28%)
    BT Financial Group $0m $645m -$645m (-100%)
    Westpac Institutional Bank $1,093m $1,086m +$7m (+0.65%)
    Group Business ($141m) $101m -$242m (NM)
    Total Australian Cash Earnings $8,065m $8,065m $0m

    As you can see from AR2019 retrospective reallocation, what was the remaining BT business unit, the 'BT Financial Group' has been 'written out of history' a year down the track.

    As was reported in the news at the time:

    https://www.smh.com.au/business/bank...19-p515cr.html

    "Westpac will continue to provide life insurance and a wealth management platform, Panorama, under the BT banner and will refer clients seeking financial advice to a panel of firms, as it would with people needing accounting or legal advice."

    So Westpac still owns the "BT brand" and will still use the BT label on certain products.

    "Chief executive Brian Hartzer on Tuesday said selling investment advice had become unprofitable, citing rising costs and the impact of the Future of Financial Advice (FOFA) laws, which banned advisers from receiving commissions on investment products."

    This is an extraordinary thing to say when just one year earlier Westpac's internal wealth management division made cash profits of $645m (see above table). However, Hartzer must have only talking about giving 'personal advice'. Only the small bit of the internal wealth business ('personal advice') that hasn't been reallocated (see above table) has been on sold to "Viridian Advisory". So who are 'Viridian Advisory'?

    -------

    "Viridian Advisory will take over part of the bank's advice arm while the rest of Westpac's BT Financial Group businesses - private wealth, superannuation, life insurance and investments - will be rolled into its consumer and business banking divisions."
    We have unpicked the earnings (above). We now need to unpick what happened to the Revenues ('Net Operating Income before Operating Expenses and Impairment Charges')

    Westpac Business Unit Revenues FY2018 (from AR2019 p157) FY2018 (from AR2018 p155) Difference
    Consumer Bank $9,161m $8,494m +$667m (7,9%)
    Business Bank $6,924m $5,254m +$1,670m (+32%)
    BT Financial Group $0m $2,226m -$2,226m (-100%)
    Westpac Institutional Bank $3,007m $2,972m +$35m (+1.2%)
    Group Business $901m $847m +$54m (+6,7%)
    Total Australian Revenues $19,993m $19,793m $200m

    The difference figure should balance out to zero. It doesn't (quite). This is not an arithmetical mistake in my part.

    SNOOPY
    Last edited by Snoopy; 24-07-2020 at 09:35 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  10. #230
    On the doghouse
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    Default Unpicking the WBC Internal Wealth Managment Business BTFG (Part 3)

    Quote Originally Posted by Snoopy View Post
    We have unpicked the earnings. We now need to unpick what happened to the Revenues ('Net Operating Income before Operating Expenses and Impairment Charges')
    Time to repeat this exercise for FY2017

    Westpac Business Unit Revenues FY2017 (from AR2019 p157) FY2017 (from AR2018 p155) Difference
    Consumer Bank $9,084m $8,451m +$633m (+7,5%)
    Business Bank $6,567m $5,026m +$1,541m (+31%)
    BT Financial Group $0m $2,255m -$2,255m (-100%)
    Westpac Institutional Bank $3,070m $3,035m +$35m (+1.2%)
    Group Business $893m $680m +$213m (+31%)
    Total Australian Revenues $19,614m $19,447m $167m

    Westpac Business Unit Cash Earnings FY2017 (from AR2019 p157) FY2017 (from AR2018 p155) Difference
    Consumer Bank $3,452m $3,155m +$297m (+9.4%)
    Business Bank $2,554m $2,003m +$551m (+27.5%)
    BT Financial Group $0m $736m -$736m (-100%)
    Westpac Institutional Bank $1,163m $1,159m +$4m (+0.35%)
    Group Business -$24m $92m -$116m (NM)
    Total Australian Cash Earnings $7,145m $7,145m $0m

    SNOOPY
    Last edited by Snoopy; 24-07-2020 at 09:34 PM. Reason: Work In Progress
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

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