Companies in the news ... and how they were assessed
Australian banks: shenanigans down under
Plenty of people in Britain think it’s lamentable that there has never been a comprehensive inquiry into our banking system. Not so in Australia, where the country’s “largest financial institutions” have just been savaged by a damning Royal Commission report, said Karen Maley in the Australian Financial Review. This once-in-a-generation report has laid bare a culture of greed and dismal advice – notably in the form of “feesfor-no-service”, where customers were charged for advice they never received, in some cases after they had died. The report also made 76 recommendations for tackling the problems. It doesn’t make pretty reading, said Stephen Johnson in the Daily Mail Australia. The report is packed with evidence of misconduct, and testimonies from broken businesses and ripped-off individuals. But will it make any difference, asked Clara Ferreira Marques on Reuters Breakingviews. True, the boss of Australia’s largest wealth manager, AMP, has been sacked and the top honchos at National Australia Bank “were singled out for a particular lashing”. But for Aussie bankers generally, it could have been worse. The report “largely recommended the implementation of rules that already exist”, challenging neither the banks’ structures nor their lending criteria. “It was supposed to be judgement day down under.” In the event, “it wasn’t quite”.
Deutsche Bank: marriage rumours
Just when you thought things couldn’t get any worse for Deutsche Bank, which has just “shrank for an eighth straight quarter”, it appears to have been “given an ultimatum”, said Dealbreaker. The powers that be seem to have said: “shape up, or face a fate worse than being Deutsche Bank… merge with Commerzbank”. Talk of an arranged marriage between Germany’s two troubled flagship banks has been “bubbling” for a while. It isn’t “exactly a match made in heaven”: shares in both banks fell by more than 50% last year. Meanwhile, CEO Christian Sewing’s cutbacks at Deutsche have been “almost gallingly severe, even for a German”. Still, a tie-up looks likely now that it has reportedly been “pre-approved” by Germany’s finance minister, Olaf Scholz. Deutsche Bank hasn’t completely lost its nose for risk, said The New York Times. It emerges that the bank – “for two decades, the only major lender to give Donald Trump money” to finance his property operations – said “no” when he approached it in 2016 during his presidential campaign. There were concerns that “if he won the election and then defaulted, Deutsche Bank would have to choose between not collecting the debt or seizing the assets of the president of the United States”.
Sofa.com: that sinking feeling
Being pipped at the post over HMV ( see below) has impeded Mike Ashley’s empirebuilding campaign. But the Sports Direct boss has come away with a consolation prize, said The Observer. In the “most baffling” move in his “current spree”, Ashley has found “a few more coins” down the back of the sofa, and put them towards buying Sofa.com. True, the latter is a supplier to House of Fraser, Ashley’s £90m department store purchase. But it “wouldn’t have been up for grabs for a nominal sum if it weren’t struggling”. Does Ashley have a grand plan? Does he spy “cheap opportunities that others are afraid to take”? Whatever the answer, “he has one more headache to solve”.