They're basically employees by any other name.
Actually Nope.
Fully independent, own office, own staff, work long hours, no uniform and on the QT much more "courageous" with financing than any bank officer could afford to be.
FYI Peter
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They're basically employees by any other name.
Actually Nope.
Fully independent, own office, own staff, work long hours, no uniform and on the QT much more "courageous" with financing than any bank officer could afford to be.
FYI Peter
Being a CBA employee goes beyond wearing their badge and uniform. It's hardly independent if your only source of business is one lender.
As for the personal banker approach of CBA this is rubbish. Pimply 22 year old who don't know how to balance their phone account let alone an IP is waste. I think they have given up there.
I've met a few Big 4 relationship managers in my time and they are all pretty incompetent. The good ones these days go to the head office rather than in the branches...
Mike Hurst - Bendigo Bank: With housing loan rates priced where they were before last Friday, banks were making no money from those loans
So why the outcry?
You have to distinguish between privately created money and government created money.
Government money is the money made by the government - e.g. cash, notes, coins.
Privately created money is the money created by the private banks. In Hong Kong, for example, many of the bank notes are actually created by the two big banks in HK, Standard Chartered and HSBC. More commonly in Australia, private money is on a computer screen (banks 'lend' you money by creating a computer entry). Under the laws, the bank-created money is the same as government money - so you don't notice the difference. The permission given to banks to 'create money' is fractional reserve banking and is the foundation of our current monetary system.
Mech, I have been reading/watching stuff on fractional banking for many years and still can't answer that question.
If you listen to the bankers, every dollar they lend is borrowed or sourced from their balance sheet. There is a statuary reserve mandate that says they can't borrow more than ten times their equity. OK, but the concept of fractional reserve banking says that you can lend out multiples of your deposits without borrowing the difference. A lot of shonks do that at the highest levels of banksterism but I just don't believe our retail banks have the option.
Banks derive lots of their income from their wealth management areas and commercial lending. They're not 100% dependent on residential loans.
Why the outcry ?
Because, rightly or wrongly, we don't believe the banks when they say:-
"With housing loan rates priced where they were before last Friday, banks were making no money from those loans"
My sympathy for the banks will begin when they are not making profits in the billions and/or record breaking profits.
I know I'd like more than 1% ROA!
What profit would you like them to make?
According to this, they have made a 19% return on equity and a 1% return on assets. I know I'd like more than 1% ROA!
It doesn't matter what the RoA is because most of the money is not their own assets. It is money created by them...so basically the return is infinity. I would love that kind of return thank-you-very-much.
Got a WBC one today. They want $750 mil for Converting Pref Shares with an indicative price of 7.6 to 7.9%.I have a prospectus in hand for ANZ Subordinated Notes. They want to raise $500 mil @ the bank bill rate + 2.75 to 3% [subject a book build]. That works out at 7.11% at the lower premium.
They're not going to be keen to offer discounts on standard variable with THAT money.
Somehow, I think we would find their other revenue streams / profit centres are tied to the fact that they are in the home loan business which gives them a leg up into all of a customer's banking business (credit cards etc). If they ceased their home loan business, these other areas would suffer and suddenly the profits would slide, which says to me that even if (a big if) they make no direct profit from the home loan, they are making plenty of indirect profit.