* New bank levy poorly designed - CBA
* Annual impact seen at A$220 mln for CBA, A$260 mln for
Westpac, A$245 mln for NAB, A$240 mln for ANZ
* Levy could encourage banks to change funding strategy -
(Adds ANZ comments)
By Swati Pandey and Cecile Lefort
SYDNEY, May 22 Australia's four biggest lenders
on Monday launched a strongly worded attack on the government's
new levy on big banks, estimating nearly A$1 billion ($745.00
million) in additional annual costs between them.
Banks have opposed the tax announced in the federal budget
on May 8, with Commonwealth Bank of Australia (CBA),
Westpac Banking Corp, National Australia Bank Ltd (NAB)
and Australia and New Zealand Banking Group Ltd (ANZ)
now putting a number on costs they say will be borne by
customers and shareholders.
On an annualised basis, the 0.06 percent levy on deposits
would cost about A$220 million after tax for CBA, versus A$260
million per year estimated by Westpac, A$245 million by NAB and
A$240 million by ANZ, the banks said in separate statements on
CBA said it had expressed serious concerns that the levy was
a poorly designed policy which would impact not just the banks,
but its customers and shareholders. Westpac said the tax was
"inefficient," while NAB said the tax could not be absorbed and
could affect profitability. ANZ said the tax could affect its
ability to maintain dividend payments at current levels.
Treasurer Scott Morrison did not immediately respond to a
request for comment. On May 14 he told reporters the tax
"reflects the way major banks are treated all around the world"
and said it would level the playing field for small lenders who
did not benefit from implicit government guarantees.
"We think this is absolutely something that the banks should
absorb, must absorb or, frankly, they're treating their
customers like mugs," he said.
The tax will apply to Australia's five biggest banks from
July 1. The government said it would deliver A$6.2 billion over
the next four years as part of revenue-raising measures designed
to bring the federal budget into surplus by 2020-2021.
Australia's so-called Big Four banks are very well
capitalised and extremely profitable. Westpac posted record
first-half cash profit of A$4 billion on May 8.
The tax will also apply to Macquarie Group Ltd,
Australia's biggest investment bank.
Industry players and analysts say the tax could encourage
banks to change their funding strategy such as beefing up
securitisation as a way to minimise the overall cost.
Pooled or securitised debt can be taken off bank balance
sheets and funded in the capital market.
With about A$180 billion of combined annual funding, the top
four Australian banks and Macquarie securitise only a fraction
of their debt - between zero and 10 percent.
($1 = 1.3428 Australian dollars)
(Reporting by Swati Pandey and Cecile Lefort; Additional
reporting by Jamie Freed; Editing by Stephen Coates and