Banking & finance briefs: Westpac's Aussie union deal, ANZ's Asian deposit dilemma

Banking & finance briefs: Westpac's Aussie union deal, ANZ's Asian deposit dilemma

1. Westpac-Aussie union reach pay agreement - In the first deal reached between the bank and the union in nearly a decade, Westpac has reached an in-principle agreement with Australia's Finance Sector Union (FSU), The Australian Financial Review reports. The deal includes Westpac agreeing to annual pay rises of 4%, improved parental leave and offering greater potential for staff to work from home. The deal covers about 26,000 Westpac staff. It includes a 2% pay rise around the middle of the year for employees whose performance is rated as "effective" or better, plus pay rises of 4% in January 2011 and January 2012.

2. ANZ's Asian deposit doubts - Doubts are emerging that deposits ANZ has "harvested" in Asia will qualify as "stable funding" once new regulatory rules come into force, The Australian Financial Review reports. ANZ's recent half-year results noted a 39% increase in deposits from outside Australia with CEO Mike Smith saying the jump in Asian deposits had reduced the difference between ANZ's deposit and loan books by A$7 billion in 2010. But the AFR notes the bulk of the growth came from institutional clients, not retail customers, which will be of limited help under Basel III regulatory rules proposed by the Bank of International Settlement.

3. Propertyfinance Group burnt by "contagion" - Propertyfinance Group's chairman Barney Sundstrum apologised to shareholders after telling them they won't get a return from the liquidation of the company, Alan Wood at The Press reports. He blamed a "contagion effect" from subprime loans linked to the US housing market, which hit PFG from 2007 onwards.

"They say timing is everything. We got caught badly on time – we apologise for that," Sundstrum said on behalf of his fellow directors Darryl Queen and Peter Taylor.

Shareholders voted for the liquidation and delisting of PFG at a special meeting in Christchurch yesterday.

"There will be no recovery there for the shareholders," Queen said at the meeting.

Directors also indicated a lower return for secured debenture stockholders in PropertyFinance Securities Ltd – a subsidiary of PFG. Queen said it was estimated debenture stockholders would get 91 cents in the dollar under a "long-term moratorium wind-down" under the stewardship of trustee Covenant Trustee as well as Sundstrum and himself.

4. Busy times at Devon - It has been a busy couple of days for Paul Glass' Devon Funds Management. The former Brook Asset Management principal has hired three key staff from his old firm, -  executive director Mel Firmin, and portfolio managers Chris Gaskin and Slade Robertson. Devon, created after Glass bought Goldman Sachs JBWere's funds management business earlier this year, has also launched a new fund, the Devon Alpha Fund. With an Australasian focus, the Fund will have the ability to hold up to 100% of its assets in either New Zealand or Australia.

5. NAB gets Axa extension - BNZ's parent National Australia Bank has been given a further six weeks to try and cut a deal with the Australian Competition and Consumer Commission on its hoped for A$14 billion acquisition of fund manager Axa Asia-Pacific. The Sydney Morning Herald reports NAB will use the extra time, up until July 15, to try and reach a deal with the ACCC over the bank's control of retail investment platforms which stymied its initial proposal.

6. Provisions for Allied Nationwide - Allied Farmers subsidiary Allied Nationwide says its results for the half-year to June 30 will include loan provisions of about NZ$10.7 million.

Allied Farmers also advises that it has provided further capital support to Allied Nationwide Finance Limited, by way of an immediate increase in the existing credit support facility provided by Allied Farmers from $5 million to $10 million. The credit support facility provides cover for losses incurred by Allied Nationwide Finance on existing and future impaired loans.

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