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| From left to right: Chris McKenzie, BP Australia; Richard Coath, NAB; Rod Doyle, NAB; David Birrell, BP Australia |
In August 2004, we announced that the former Corporate & Institutional Banking division would be divided into global and regional divisions.
In the 2005 year, the global business will be known as Institutional Markets & Services (IMS), incorporating Markets, Portfolio Management & Syndications, Credit Products, Structured Products, Financial Institutions, Services and the New York branch. The Corporate Banking, Transactional Solutions and Custody Services will be incorporated into the regional divisions of the Group (with Asia reporting into the Australian region). This will enable us to better service the needs of our corporate customers, ensuring corporate banking is integrated with our other regional operations, while providing specialist institutional services globally.
For the 2004 Concise Annual Report, reporting is based on the former Corporate & Institutional Banking business. During the year, the $360 million foreign currency options trading losses, subsequent regulatory investigations, and changes in leadership and structure all represented significant challenges.
The former Corporate & Institutional Banking division reported a net profit* of $618 million for 2004, 29.5% down on last year.
Risk management
Following the unauthorised foreign currency options trading, we commenced a significant enhancement of our risk management systems and procedures. We are addressing the remedial actions outlined by the Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission (ASIC) enforceable undertakings, and we are working to produce a pro-active, positive risk management environment.
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| Robert Wiseman Dairies, UK corporate banking client. |
Serving our clients
Despite a difficult year for the business, in Australia we had significant transactional achievements, including project financing the Cathedral Rocks Wind Farm in South Australia, and becoming the exclusive provider of card acquiring services for BP Australia’s retail sites.
International highlights included managing Auckland International Airport’s bond transaction, acting as lead arranger in a kangaroo bond issue for a prominent Asian issuer, and building on strong banking relationships, including Robert Wiseman Dairies plc in Europe, who started business in 1948 with funding provided by the Group.
We also introduced several initiatives:
- Flexi Rate Asset Finance Facility (in Australia), providing clients with choices for managing their interest rate risk profile
- Capital guaranteed investment products (in Australia): the OM-IP series of investment products and the AMP Capital China Fund
- The New York branch established a public finance line of credit for states, counties, cities and their political sub-divisions to finance a variety of working capital and capital expenditure needs
- In Europe, Regional Corporate Banking was established to focus on the mid-market sector, working closely with the regional banks. A Structured Asset Finance team and an Asset Leveraged Finance team were also established
- We launched commodity hedging solutions to the New Zealand business sector in response to increased commodities activity
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| Markets Assistant, Kelli Sanderson, and Manager, Wealth Management Distribution, Markets, Paul Wegener, on the trading room floor in Melbourne. |
Our custody business, National Custodian Services, is one of the largest custodians in Australia (measure: assets under custody and administration, source: Australian Custodial Services Association, June 2004).
Transactional Solutions expanded its Australian Client Sales and Service team to provide tailored solutions for clients, as well as investing in its technology and operational support functions. An extensive product development program and a Business Transformation Team were also established in response to increased client demand.
In July 2004, we announced the closure of our UK Custodian Services operations, transferring clients to The Bank of New York Company, Inc. (subject to client approval). The decision (which did not affect the Australian or New Zealand custody businesses) was based on increased price competition and ongoing market consolidation in the UK, which impacted the likelihood of continued profitability in that market.
Developing our people
Investment in our people and a focus on continuous development demonstrated our commitment to learning, with training initiatives offered in leadership, lending accreditation, international financial reporting standards, credit, technical trading strategies and diagnostic selling, among other programs.
Community contributions
IMS fundraising and volunteering during 2004 benefited a number of not-for-profit organisations, including the Leukaemia Foundation (Australia), Cystic Fibrosis Victoria (Australia), Cancer Council (Australia), Royal Children’s Hospital (Australia), Muscular Dystrophy Association (USA), Leukaemia & Lymphoma Society (USA) and the Barbican Centre’s 10th London Australian Film Festival (UK). In Australia, we also sponsored a dynamic training ‘dealing room’ at Monash University.
* Net profit attributable to members of the Company before significant items.
Click here to download a PDF of the Concise Annual Report 2004 (2,596KB)
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