It seems Westpac is now on its own to fight the corporate regulator over claims it rigged the key Australian money market interest rate. The news didn’t startle the market and Westpac shares rose 0.6%, Nab shares were also ip 0.6%, as well as ANZ shares while Commonwealth Bank shares eased by 0.15%.
That was after ANZ Bank and National Australia Bank concluded their settlement discussions with ASIC over its case that both banks allegedly rigged the BBSW rate – which helps price many other interest rates in wholesale markets.
The case against Westpac will proceed in the Federal Court after NAB and ANZ were referred to a penalty hearing next month having settled with ASIC late last week.
NAB settled with ASIC for $50 million, while ANZ reportedly settled for the same amount.
Westpac had been under increasing pressure to settle the case after ANZ and NAB agreed to settle – it was reported yesterday that informal talks between ASIC and Westpac continued last weekend without settlement.
Fairfax Media reported yesterday “Westpac is readying to fight allegations by the corporate watchdog that it rigged one of Australia’s key interest rates, despite its co-accused, ANZ and National Australia Bank, settling their cases."
“Lawyers for Westpac told the Federal Court on Monday it would continue with the landmark case, despite the bank facing increasing pressure to settle with ASIC,” Fairfax Media reported.
ASIC has alleged the three banks separately rigged the bank bill swap rate, a key benchmark rate used when setting the cost of business loans, for financial gain.
NAB will come under pressure from analysts and the media to reveal more details at its 206-17 full year results release on Thursday, but the bank will demur, citing the penalty hearing next month.
NAB confirmed late last Friday it had settled with ASIC for $50 million. As part of the settlement, NAB has admitted to attempting to engage in unconscionable conduct on 12 occasions.
Last Monday, ANZ confirmed it had reached an in-principle agreement with ASIC.
Fairfax Media says NAB has agreed to pay ASIC’s costs of $20 million as part of its settlement and ANZ’s deal is also believed to cover ASIC’s costs. Investors should look closely at any one off items in NAB’s 2016-17 report on Thursday.
