Daily Dispatches: Macquarie makes another move into Wall Street

Now they are saying that wholelsale funding is expensive. Our response to this to CBA and Westpac as a shareholder is why did you not take advantage of the times in the past to be proactive in corporate lending while the wholesale funding is still cheap. Maybe you should change and replace your risk heads. For CBA we know they just added and enhnaced the risk structure just early this year. This goes the same with Westpac and NAB has just started in September 2009. This reasoning is not acceptable.

Lets just hope the domestic banks are not just growing corporate loans to show that they are working for the shareholders. We hope that they are convince that growth should continue and this is not just a political campaign from them to show that they are working for shareholders. We know that a lot of corporate credit lines were not revisited in the past five years hence there was little activity in this sector. To us it shows that they do not want to do the hard work and they do not wantt to put resources to diversify portfolio client exposure. To be honest they were not productive and did not help in propeling the economy of Australia by limiting the financial assistance to the corporate sector in the past five. Further concentration in FI made them susceptible to systematic risk. Credit exposure to FI is important but it should be coupled with exposure to corporate to diversify the portfolio and mitigate any concentration risk. This is a very simple formula but it was not done prior 2008. This just shows you the quality of the risk department in the banking industry (credit analyst, risk manager). This is true to all the banks.

Macquarie why only now?????? You ahve to wait for a financial crisis 2008 or the collapse of Lehman brothers to review your market positioning strategy!!!!

Growth in corporate loan expsoure of domestic banks is long overdue. This is expected to happen 3 to 4 years ago. So what did CBA, NAB, and Westpac did prior years? They just started being proactive January this year. Ironically as Georgia mentioned everyone have exurbetant bonuses and base pay since 2003 from the front office to credit analyst to CEO. In short from top to bottom. A lot of corporate credit lines were not reviewed since 2008 and this is not because the banks do not have the money to fund the growth. It is because the credit analysts in the credit and risk department were slack. You definitely cannot say that companies in Australia are too risky to be given a loan. You have got to be kidding me. A part of the problem is lack of resources on these department as well but mostly mismanagement. Of course you do not expect the global bank to have the leg to do this on the corpoarte side given that the domestic banks have more branch offices across Australia. This is more expectation from the domestic banks which is long overdue.

I agree CEO and CIO's salary needs to be realistic nothing more than 500k base. They are not running a country they are just running a company. They are paid even more than our prime minister in Australia and he gets the shits when the banking system gone dysfunctional. Although I undetsrand the banking industry plays an important part in the society but its growth does not soley rely on the CEO and CIO and head of the departments. This is a group effort in the bank.