TE-BO: Budget 2014 – Banks – they deserve to pay more for the Government Guarantee …
|TE-BO: Budget 2014 – Banks – they deserve to pay more for the Government Guarantee …
| Author: TE-BO – The Eye-Ball Opinion| Date: May 6th, 2014 |
The Major Banks are amid their half-year reporting period. The ANZ announced a $3.7 billion profit against a forecast $3.5, WBC announced today a $3.77 billion profit against forecast of $3.64 billion, and the NAB announced their half-year result at $3.5 billion against a forecast at $3.2 billion. The CBA reports mid year.
Collectively the major banks have reported $20-$25 billion p/a profits over the last few years – this against the GFC impact and when stacked up against all other industries, apart from sections of the mining and resource industries, the Banks have demonstrated they literally do have a license to print money.
WBC boss Gail Kelly came out today in defense of Bank margins and how they will fight to keep their margins are current levels. Read story below:
The Government gave the Banks a big boost when they issued additional investor guarantees when the GFC first hit. [These 2008 additional guarantees can be read further at this link – all Bank guarantees in existence can be read here.]
Banks have increase their profitability every year since the GFC, and much of this is due to the guarantees issues by the RBA and the Government.
Treasurer Hockey should review the cost the Banks pay for this guarantee structure as a part of his Budget crisis review. There is no doubt the guarantee impacts and improves the Banks profitability and their international credit rating. This allows the Banks to borrow at cheaper rates and increases their profitability as a direct result. Take away the guarantee and the Banks profitability would fall significantly. Why should the Banks have a privileged status and grow their shareholder returns at the expense of the budget measures that will impact of all Australians?
The Federal Government went after the miners with a ‘super profits tax’, why not the Banks?