ARAb StAtES diSMAyEd At WESt'S cOMPlAcENcy - Kuwait Times

SATURDAY, MAY 4, 2013
BUSINESS
Westpac posts record first-half profit
SYDNEY: Australian heavyweight
Westpac Banking Corporation Ltd yesterday
reported a better-than-expected 11
percent increase in first-half net profit to a
record Aus$3.3 billion ($3.4 billion) as it
chases growth. The country’s second
largest bank by market capitalisation said
cash earnings, the preferred measure
which strips out volatile items, were up 10
per cent to Aus$3.53 billion against the
first half last year. Analysts had forecast
cash profit of Aus$3.47 billion for the six
months to March 31.
The bank noted that all its Australian
businesses produced double-digit cash
earnings growth and costs had also been
reduced. Despite the record results, chief
executive Gail Kelly said: “The operating
environment continues to be challenging,
with subdued lending growth. “However,
in line with our strategy, we are actively
targeting opportunities in higher growth
areas where conditions are more
favourable such as deposits, wealth, trade
finance and natural resources.”
“Momentum continued to build over
the period, with all our Australian businesses
producing double-digit cash earnings
growth,” she said. Westpac said lending
increased three percent to $15 billion,
driven by Australian housing loans.
Customer deposits soared 12 percent to
$360 billion. “However you look at the
headline numbers from Westpac this
morning, they can only be seen one wayinvestor
pleasing,” said IG market strategist
Evan Lucas.
Kelly said that Westpac’s capital
strength helped it to pay a higher interim
dividend of Aus$0.86 per share as well as
a surprise special dividend of Aus$0.10. In
early deals, Westpac shares rose but, IG
market strategist Stan Shamu explained,
it “turned negative as short-term traders
who had positioned themselves for a
monster result by the bank locked in
gains”. Westpac shares closed down one
percent at $33.55 while the benchmark
ASX200 index was flat on 5,130 points.
The results followed rival ANZ’s record
$2.94 billion half-year net profit posted
earlier this week. A rally in Australian bank
shares in the past 12 months has pushed
the market value of Westpac above $100
billion with some analysts warning of a
possible bubble in the sector. — AFP
LONDON: State-backed Royal Bank of
Scotland yesterday pushed for the
British government to start selling its 82
percent stake as early as next year even
though it could mean a loss for taxpayers.
Chairman Philip Hampton said the
aim was to have a business in strong
enough shape to start preparing a
prospectus with the government for a
sale from the middle of 2014. “It could
be earlier, that’s a matter for the government,”
Hampton said in an interview on
the bank’s website.
Britain pumped 45.5 billion pounds
($71 billion) into RBS during the 2008
financial crisis, leaving the government
with a controlling stake. The bank has
been through a big restructuring - shedding
underperforming assets and cutting
jobs. It reported its first quarterly
profit in 18 months yesterday. But taxpayers
are still sitting on a paper loss of
19 billion pounds, based on RBS’s current
share price.
The government is keen to start selling
its holding but is under pressure to
get a good deal for taxpayers ahead of a
general election in 2015. RBS is pushing
LONDON: A blue sky over the headquarters of RBS Bank is seen yesterday. — AFP
RBS eyes return
to private sector
RBS to show first profit in 18 months
for a sale so it can run its business without
state interference. Hampton has said
the bank needed freedom to execute its
recovery plan without political meddling.But
rival Lloyds Banking Group, 39
percent state-owned after a bailout in
the crisis, could prove a more attractive
business to sell. Lloyds reported a big
jump in first quarter profit on Tuesday,
pushing its shares close to a price where
the government could break even if it
sold out. Sources with knowledge of
government plans told Reuters a sale of
shares in RBS or Lloyds in 2014 was realistic.
A decision would depend ultimately
on the share performance of the two
banks in the interim and whether the
government would sell at a loss, the
sources said. Other factors affecting the
decision included the outcome of talks
on capital requirements between the
banks and Britain’s financial regulator
and a review into banking standards by
a parliamentary panel. The Treasury and
UK Financial Investments (UKFI), which
manages the government’s stakes,
declined to comment.
RBS Chief Executive Stephen Hester
said the government might have to take
a loss initially when it starts selling, given
the depressed state of bank shares
and tougher regulation of the industry.
But he expected the UK taxpayer to
make a profit in the long run. “There
may well be a cogent case for starting at
a lower price but I believe the average
(sale) price can, and should, be above
the government purchase price,” Hester
told reporters.
RBS shares were down 5.7 percent to
290 pence at 1200 GMT, well below the
407 pence mark which the government
regards as its buy-in level. Under
Hester, RBS has shed around 900 billion
pounds in assets and is focusing on
lending to British households and small
businesses. He said the bank was starting
to see a pick-up in loan demand,
echoing comments from Lloyds, which
said its core loan book had returned to
growth quicker than expected. The
long-term prospects for RBS and Lloyds
are closely linked to Britain’s economy
as their domestic focus means profitability
will be constrained until UK
growth picks up. —Reuters
Economist to
lead Canada’s
central bank
OTTAWA: The Bank of Canada on Thursday named an economist
and longtime bureaucrat, Stephen Poloz, as its new governor,
succeeding Mark Carney who is leaving to head the
Bank of England next month. Poloz has worked in Canada’s
public service for 25 years, including since 2011 as chief executive
of Canada’s export credit agency, which helps Canadian
exporters and investors expand their international business.
“Mr. Poloz has significant knowledge of financial markets and
monetary policy issues and extensive management experience,”
David Laidley, chair of the bank’s search committee
said in a statement.
“We are confident Mr Poloz will make an outstanding contribution
to the work of the bank and uphold its reputation as
a leading central bank.” Poloz starts his new job on June 3, for
a seven-year term, hinting on Tuesday at a press conference
that he intends to stay the course on monetary policies set by
his predecessor. During his term, Carney lowered the bank’s
key interest rate to a near record low of 1.0 percent-where it
still stands-in hopes of keeping the Canadian economy afloat
during the worst global economic and financial upheaval in a
century. “The global economy still has its fragilities or issues
that it faces, so we aren’t out of the woods yet, and Canada
will feel all of those shocks as they occur,” Poloz said.
“But I think the framework that we work with here has
proved itself very well and so I think we’re well equipped to
press forward.” Analysts quickly noted that Poloz has otherwise
not commented on monetary policy for some time and
so it is hard to judge how he perceives the current central
bank stance.
Even so, the Bank of Canada’s rate decisions are taken by
consensus by its governing council and so most analysts
expect rates to remain at their current levels for now. Nomura
bank analyst Charles St-Arnaud of Nomura bank commented
that as chief economist at Export Development Canada, Poloz
worked “intensely on the productivity and competitiveness
issues that have been plaguing the Canadian economy over
the past decade.”
“This could be important given that the recent Bank of
Canada forecast pegged a lot of hope on an export-led recovery,”
he said. Citing a report released by Export Development
Canada, Poloz told reporters to expect “pretty strong growth”
in Canadian exports in the coming year as the recovery in the
United States, Canada’s largest trading partner, picks up. He
also noted that since 2008 many small companies in Canada
had folded. “What we’re looking for now is the resumption of
creation of new companies, and that is just beginning.”
“So the supply side of the economy is also in a rebuilding
phase,” he said. A native of Oshawa, Ontario, Poloz graduated
from Queen’s University in 1978 with a bachelor’s degree in
economics, and subsequently received a master’s degree and
a PhD in economics, both from the University of Western
Ontario. He worked for Canada’s central bank from 1981 to
1995, occupying increasingly senior positions including chief
of the research department. He then spent five years with
Montreal-based BCA Research before returning to the public
sector. Finance Minister Jim Flaherty pointed to Poloz’s
decades of experience in financial markets, forecasting and
economic policy, to say: “I am confident he has the skills and
experience required to lead the Bank of Canada at a time of
global economic uncertainty.” Poloz said his appointment as
the central bank’s ninth governor was both “an honor and a
privilege.” — AFP