Are the Big Four too strong?

Socgen, Dex and BNP Pariba will all head home and close shop here in Australia, they dont even have their products team on the floor here yet they want to do all these cross sell, they need to know this is the big boys world now.

ASIC was also being too nice to them given that they are mostly government banks. You obviously do not want to inflict bad name on your own back yard. This will have implications to the share price of the big 4 and this can have a ripple effect on super and pension funds.

The big 4 was not also managed well. The big 4 banks are just lucky they are getting a lot of support from the government and regulatory bodies.

Actually one of the reasons why foreign banks pull ou from Australia is because they have a very limited options of business line where they can still operate with descent profits. Given that the big 4 banks already monopolised private banking, financial planning, asset management and distributon, and corporate banking. All that was left for the big banks are wholesale funding to the big 4 banks while premiums are not even competitive. This is why you the likes of Socgen pulling out their business from Australia to Hong Kong. Aside from the fact that Socgen did not have a good operation and IT support that is adding cost to Socgen without reasonable value add. This is why you see foreign banks pulling out their operation from Australia. Low market penetration and costly operation without value add, so why will they stay?

Foreign banks can actually still decide to maintain their operation in Australia and just put up satellite offices in ither Asia Pacific region but they chose to pull out and transfer their operation overseas because they are getting incompetent operation staff and IT staff in Australia. Like in the case of Socgen. In the last 5 years the IT and operation staff continued to provide sub standard services to the front office to the extent of even pushing their job to the front office. Front office was left doing operational staff which is counter productive to the core performance expected in the front offfice. The head of operation and IT was not productive in the past fie years. It is actually very surprising that the management in Paris put up with this for five years. It is only recently that they made approriate changes. We believe the like of WH Mark Sattin provided this candidates to Socgen. So warning to other global banks do not get candidates from WH Mark Sattin they will end up like the calibre of IT and operation staff from Socgen.

We also heard that in the past 4 years the previous front office business analyst and portfolio managers that already left Socgen in 2008 connived with operation and IT in not disclosing the complete actual positions in their balance sheet in Australia to the management in Paris. Even their group risk did not say anything to their Paris management for 3 years. This is why you cannot blame management in the head office pulling out their operation in Australia. You cannot run a business without transparency and honest people. The management in Paris is left to explain to share holders and it is too late when they find out a mess.