The Reserve Bank of Australia has rejected a request by the Bank of NSW to consider a bond sale by Bank of Melbourne as it considers the future of the bank’s cash-strapped business.
The bank said the deal was not in the best interests of its customers, as it would be a loss of control over the banking sector.
The Reserve Bank said it was seeking advice from the Competition and Consumer Commission (CCCC) on the merits of the deal, which would be subject to the regulator’s approval.
“The terms of the proposed sale are not in our best interests, but they are consistent with the terms of our current business plan,” the bank said in a statement.
It is unclear whether the NSW regulator has any role in the process.
In the meantime, Bank of Sydney shares fell 5 per cent on the New South’s first-quarter results, while Bank of Macquarie slumped 4.7 per cent.
The Queensland Bankers Association and the Australian Council of Financial Advisors (ACFA) have expressed concern about the future direction of the state’s financial sector.ACFA president Mark Rance said the state was in danger of losing its reputation as a financial hub.
“It is time to reconsider whether we should be investing in the economy at all,” Mr Rance told AAP.
“There’s a lot of people who are looking at these deals and I think the banks are the ones that are putting themselves out there to say that they can’t be taken out of the business.”
“We’re looking at how much money is going into the economy.
Topics:bankers,business-economics-and-finance,wealth-and/or-wealthy-peoples,capital-markets,australiaContact Sam DuttonMore stories from New South Wollongong”
The banks are in a situation where they can make money for themselves, but it’s not a good time to invest.”
Topics:bankers,business-economics-and-finance,wealth-and/or-wealthy-peoples,capital-markets,australiaContact Sam DuttonMore stories from New South Wollongong