Friday, June 6, 2008

Ralph Norris will pounce, you can bank on it

Given the recent marriage between Westpac and St George Bank[SG.AX] to forge Australia's biggest bank, to surpass the size of The Commonwealth Bank of Australia [CBA.AX] it seems unlikely that Ralph Norris, the CEO of CBA, will rest on his laurels.
Australia's banking sector has been ripe for consolidation for some time and talk of marriages and takeovers of various Aussie banks has been rife for the last few years.

It just so happens that Gail Kelly, the current CEO of Westpac Banking Corp [WBC.AX], was the former head of St George until August 2007 and she has wasted no time in making her presence felt at Westpac by moving to swallow the fifth largest bank in Australia, St George.

Ralph Norris is going to be biting at the bit to get his hands on one of the smaller sized oz banks as he cannot make a bid for any one of the "big 4" for competition reasons. Suncorp Metway [SUNN.AX], Australia's 6th largest bank and 4th largest insurer, would be a great fit for CBA and given slumping banking company share prices the current economic turmoil conditions would be a good time to pounce.

Even some of the smaller state banks like Adelaide Bank & Bendigo Bank [BEN.AX], merging themselves in August 2007, or the Bank of Queensland[BOQ.AX] would be possibilities for Ralph and CBA. These state banks have a strong presence in their home states but also have smaller niches in neighboring states.

Ralph is the sort of individual who doesn't like to be beaten. As an aggressive head of CBA's subsidiary in New Zealand, The ASB Banking Group, he helped turn that particular company from a strong regional Auckland based bank into the leading countrywide lender for mortgages today.

Whatever happens in the Australian banking sector though you can be sure that owning any of the smaller Australian banking stocks is going to be an exciting time for shareholders and it is only a matter of time before a few good ones are snapped up by Ralphy.

Australia is really a microcosm of what is happening world wide when it comes to banking stocks though. Right at this time in Thailand, where I am presently sunning myself, there is consolidation going on. In the US we have seen troubled banks gobbled up by competitors and Europe is having a good go at it too.

Ralph Norris will be on the hunt in OZ, he loves a bargain, so make sure as a shareholder you hold out for more come offer time!




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c Share Investor 2008