Westpac Banking Corp (WBK-N)

Australian banking is similar to Canadian banking by not having the same issues in 2008 that affected the US and European banks. The big issue facing Australian banks is not dissimilar to Canada where people are really worried about the housing market. In Sydney, housing prices have skyrocketed for similar reasons that they did in Vancouver. In the long-term they will do well, but there is a small risk of the housing market affecting them.

All of the Australian banks are sort of like Canadian banks, but on Speed. The Australian property market was an even bigger boom and bust, and now they have to pull back. The Australian dollar has cratered, even more so than the Canadian, primarily because a 3^rd of their exports go to China.. Well-run and a good bank, but the underlying fundamentals of the Australian economy and property market are not great. Probably not where you want to be for the next couple of years.

Likes Australian banks for structural reasons. Australia has a superannuation program that has been in place since 1976. About 9% of every dollar you earn has to go into the superannuation fund and that money finds its way into the Australian banks, real estate markets, etc. He would like to see a little more international focus to it. You can hold this for 5-10 years and it will be a very good company.

Probably equivalent to Bank of Nova Scotia (BNS-T) in Canada. Very corporate banking focused. Good bank. Has a progressive dividend growth profile. Very Australian focused meaning heavy exposure to a mining sector, overheated real estate market and an economy that is slowing down. On the positive side they have a superannuation fund where $.09 of every dollar earned on an income basis is put into, effectively an RRSP program, run by the government. On balance it is a good investment and is a well-run company with an attractive dividend. You can buy this and put it away and you’ll be fine.

Would worry about getting into Australian banks if he wasn’t there already. Had a very good run. Australia has gone through a very, very long expansion and housing prices are very steep so there is a risk of a selloff in housing.

Australian banks performed very well during the fiscal crisis. Third biggest bank in Australia. Concerned that currency is very high compared to historical levels. He is weary of the commodity and the currency unless it drops aback.