CBA offer for Count Financial points to consolidation of larger firms

Australian banking giant CBA announced on August 30 that it had offered A$373m for Count Financial, one day after the first bill for the FOFA was announced. Datamonitor believes that further consolidations involving larger-than-expected players are set to occur in response to the reforms.

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Card payments: corporate Australia holds prepaid promise

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Bankwest may have been propped up by Reserve Bank of Australia during the financial crisis

Documents tendered in an Australian court case suggest that Bankwest was kept afloat by RBA during the financial crisis, receiving up to A$3.75bn a month in funding. The troubled bank was subsequently purchased by Commonwealth Bank Australia at a book discount. The revelation challenges the prevailing view that Australia escaped the crisis without resorting to bank bailouts.

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Banks are wary of environmental risks, but a switch to green lending is not inevitable

Some of the world's biggest banks will make it increasingly difficult for companies involved in controversial industries to get funding for future projects. Growing environmental scrutiny is making it harder for lenders to finance polluting industries without suffering a blow to their reputation, but a continued focus on profit means improved lending for green ventures is far from guaranteed.

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Bank of Queensland raises A$108m

On January 28, Bank of Queensland announced that it had managed to raise A$108m in capital. The bank secured the money by accessing a combination of benefactors comprising institutions, high net worth individuals and retail investors. The funds will push Bank of Queensland's capital ratio past 8%, and will help the bank to sustain organic growth.

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Australian banking: RBA still confident about the financial system

The Reserve Bank has reiterated its confidence in the Australian banking system, while acknowledging that the situation will remain challenging in the near term. Governor Glenn Stevens also commented on the situation in the US, where investment bank Bear Stearns has been propped up by the Federal Reserve.

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Australia: rates on the rise

The repercussions from the recent Reserve Bank cash target rate rise are starting to be felt by Australian mortgagors, as major lenders have raised their mortgage rates in response to higher funding costs. The short-term outlook for mortgagors continues to be bleak as further rises are on the horizon.

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Australia: new Islamic Index is expected to appeal more to investors from overseas

Following last year's introduction of an Islamic equity fund, Thomas Reuters and Crescent Wealth have launched their first Islamic Australian index. The index offers domestic and international investors a tool to invest in the Australian market in accordance with Sharia law, although it is a product that will appeal more to overseas investors.

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Australia: interest rates on hold as economy slides toward recession

The Reserve Bank of Australia has left interest rates on hold, contradicting most analysts' expectations of a modest cut. However, subsequent economic data show that the Australian economy contracted by 0.5% in the December quarter, bringing the country closer to technical recession. Now, with the benefit of hindsight, the bank may well be regretting its decision.

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ANZ: bad debts partly offset by consumers' preference for major banks

On October 29, ANZ revealed that increased bad debts would reduce its profits for the 2009 financial year by 11% to A$2.94 billion, although there were also positive aspects to the company's results, with its revenues rising by 17%. Large banks such as ANZ need to exploit their size advantage to maintain market share as the economy recovers.

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