Nobody named Brian is ever competent

It’s an uncomfortable but unconscious truth that some first names are not associated with success. Those which immediately spring to mind include; Wayne, Kevin, and Nigel.

Brian is another example. Yes, the guitarist from Queen is highly competent in the fields of music and astrophysics, but he’s the exception, like Farage is amongst all the Nigels.

Australia has a classic “incompetent Brian” running (ruining?) the bank, Wokepac.

Luckily for Brian, he’s a member of The Club, which is handy because this time next year he’ll need to find a new job.

Why?

Two reasons:

Firstly, he’s been at the helm during the latter phases of the multi-decade ongoing decline of the weakest of Australia’s “big four” banks, culminating in the apologetic letter (from page 10) in the annual report.

Secondly, he’s got to find $8m cash in his personal bank account between now and March next year.

Now, I’ve no doubt Brian’s personal wealth easily exceeds that; he earns over half of that a year in the salary component of his package alone, notwithstanding his generous decision to waive his performance bonus.

The more pertinent question is whether or not he has enough personal belief in the future of Wokepac, the Australian banking industry and the Australian economy in general, to cash in $8m of his investments and personal wealth and transfer it to shares in the dog of the banking sector?

Bills Opinion

Since joining The Club, Brian has feathered his nest nicely whilst virtue signalling, using shareholder’s money, on matters LGBTQ+, Aboriginal, diversity and every other cause célèbre.

The time has come to see quite how committed he is to this as a future business strategy. Chicken or pig, Brian?

5 Replies to “Nobody named Brian is ever competent”

  1. Australian banks are strange unmovable cattle when it comes to share prices. Even with Wetspacs recent share price drop they are just like all the rest of the Australian banks overvalued, but investors still lap it up. NAB today announced a shocker and a trim of their dividend and their share price went up, crazy shit alright.

    Then there are the big miners and between the banks and the miners that is the majority of the ASX, the money is not to be made in these type of stocks. I am sure that in the life of Brian he knows this as well, but he also would know that the risk of capital loss is low as well and he will get the brownie points investing his hard earned back into the company that pays him and he leads. Actually just after their trading halt this week would have been a good time for him to buy into their share price drop and the wall of worry surrounding the Aussie banks at the moment.

    The sloth like big banks and big miners dominating and anchoring the ASX down, is the Australian anomaly and I doubt that it will ever change.

    See the share price to intrinsic value of Westpac compared to Barclays in the FTSE 100, they are 70% cheaper than Westpac on a like for like basis, I kid you not. Barclays are also the most profitable bank in Europe and their dividend is not being cut and as far as I know they still respect your manhood if you open up an account with them or buy their shares.

    https://ibb.co/PF2dF2L

    1. Yes, overvalued but “the market can stay irrational longer than you can stay solvent” is still true.
      We can do similar comparisons on, say, exec salaries by market cap, revenue, or staff employed.
      Australia is a strange beast in several ways.

      1. Superannuation is another one, and now we have this very unique spin off originating out of it.

        ……………………………………………………………………………………….

        Plan to expand the bank of mum and dad

        “Parents will be able to more formally support their kids to get on the property ladder using their SMSF on an arm’s-length basis,” he said.

        “The bank of mum and dad already provides $30 billion of support and we believe this could be a much larger amount.”

        https://www.afr.com/property/residential/domacom-s-grand-plan-to-expand-bank-of-mum-and-dad-with-superannuation-20191101-p536fr

  2. Westpac’s payout ratio is still a quite enormous 79%. Not really the kind of ratio that is found in businesses that are self identifying as under significant regulatory and competition pressure, that cannot possibly do more to change faster and are at capacity for pace and scale of investment. They do have large investment programs, but if you have a market leading cost to income, and a high payout ratio then it leads to some confusion when looked at in certain ways. Similar to revealed preferences, but on a larger scale. Insiders may feel that same confusion when using systems that were last leading edge in the 80’s, but are told that there is no money for upgrades. They will make incremental change, just like they always have.

    While there is some sympathy for the view that investing in nine females won’t deliver one child in a month, as opposed to nine months, it does feel that someone is getting a good deal, or taking some risk that they don’t recognise.

    I then layer over that these are largely the same people that resisted changing the industry while now overseeing enormous remediation bills, and seeing one of their key achievements for the year as ‘exiting wealth’. I always felt the need for a wash after meeting with the sales people that masquerade as financial advisers, and my key regret is not being louder about it. And just on that, if banks and their regulators would wake up to the fact that they employ sales people, rather than advisors, then it would save a lot of regulation and law and bring some honesty to labelling. But it is too long a leap to make it would seem. General advice is sales, not advice.

    Hartzer is toast. His service revolution is clearly failing and no one likes putting on his clown suit to get the message out. It will be 12 more months because there is no replacement ready yet.

    1. Maybe it’s time for more diversity.
      Perhaps Gail could be persuaded to come back and, I dunno, actually integrate St George this time?

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