Banks told to stump up $1.5b cash buffer
WESTPAC, NAB and ANZ have been ordered to set aside an extra $1.5 billion in capital until they have finished refunding customers for their various wrongdoings and improved at spotting risk.
The Australian Prudential Regulation Authority yesterday said it had written to Westpac, NAB and ANZ to tell them they each need to hold an extra $500 million in capital.
The instruction followed APRA’S decision in May last year to apply a $1 billion capital add-on to Commonwealth Bank in response to the findings of the Apra-initiated prudential inquiry that followed its money laundering scandal. IT has been a long way to the top for billionaire technology entrepreneur Richard White.
Wisetech Global, the company founded by the former guitar technician for AC/DC, has climbed to a record valuation, overtaking Australian icon Qantas Airways in the process.
Shares in Wisetech eclipsed $30 for the first time yesterday, giving the logistics software maker a market capitalisation of $9.61 billion.
Mr White, 64, is chief executive of the company and still owns a 48.8 per cent stake, giving him a net worth of $4.69 billion.
It’s a far cry from the dirty deeds that Mr White, who used to repair guitars for AC/DC and The Angels, used to do dirt cheap.
His first job was dishwasher at a Sydney function centre run by his grandfather. He’s also a qualified refrigeration engineer.
APRA chair Wayne Byres yesterday said Australia’s big four banks were still falling short when it came to identifying risk, which in CBA’S case led to it breaching money-laundering laws and a $700 million fine – the largest civil penalty in Australian corporate history.
“Australia’s major banks are well capitalised and financially sound but improvements in the management of non-financial risks are needed,” Mr Byres said.
“This will require a real focus on the root causes of the issues that have been identified.”
CBA’S major rivals were among 36 institutions asked by APRA to look at their own risk as
Earlier this year, Mr White was ranked 20th on a list of Australia’s richest 250 people.
At the price Wisetech shares are trading at now, he would be worth more than Clive Palmer, who was 13th on the list with a net worth of $4.51 billion. sessment systems in the light of a report that had suggested many issues were “not unique to CBA”.
NAB, ANZ and Westpac did so and reported back to APRA, although only NAB had made its self-assessment public until Westpac followed suit on Thursday. Westpac’s self-assessment said some of the issues at CBA resonated with Australia’s second largest lender and chief executive Brian Hartzer said executives were committed to addressing shortfalls.
“(But) the prominent behavioural characteristics at CBA identified by the Prudential Inquiry, particularly a sense of chronic ease, complacency, and
Fellow Wisetech shareholders and non-executive directors Charles Gibbon and Michael Gregg also made the list, with wealth of $470 million and $320 million respectively.
Company co-founder Maree Isaacs is well placed to join the list certain governance-related issues, are not similarly prominent at Westpac,” the report said.
ANZ had yet to release its selfassessment. The big four banks have together shelled out more than $5 billion in customer remediation over two years in the wake of revelations at the financial services royal commission.
The $500 million requirement, to be applied through an increase in risk weighted assets, will apply from September 30 and will remain until Westpac, NAB and ANZ complete their planned remediation to strengthen risk management, and close gaps identified in their self-assessments. next year, with holdings worth about $350 million.
Mr White started the software company in 1994. After deciding he wanted to ditch the music industry, he moved through a list of ventures from lighting design to computer wholesaling.