Westpac says bank levy will cost $260m

Reuters

To dimension the impact of the Levy for our shareholders, the $260 million after tax cost is equivalent to around 8 cents per share (using the above estimates).

Taxpayers will be sharing part of the burden of the government's bank levy, according to Westpac, which revealed its expected cost for that bank in a statement to the ASX this morning. In a letter to shareholders, the Sydney-based lender also highlighted concerns about plans in the budget to give regulators a greater say over executive pay.

The bank says calculations of the announced 0.06% Government levy are based on its impacted liabilities of $615 billion as at 31 March 2017.

"Your CEO Ian Narev and I would like to hear your views and respond to any questions you may have on the new tax".

"Given the limited detail available to us it is hard to precisely calculate the Levy", the banks writes.

Mr Maxsted stressed no decision had been made on what Westpac would do with the levy. Westpac reported an unaudited cash profit of A$7.82 billion in the year ended September 30. But he also said that if the full impact were passed on to shareholders it would be equal to a dividend cut of 8c a share. Now only Westpac, Commonwealth Bank, ANZ, National Australia Bank and Macquarie Group will be targeted by the 0.06 percentage point charge on bank borrowings.

Spurs beats Man United in stadium finale to secure 2nd spot
Hull joined Sunderland and Middlesbrough in dropping into the second tier after losing 4-0 at Crystal Palace. Talisman Harry Kane, quite fittingly, netted their final White Hart Lane goal early in the second half.

To address the issue, Westpac suggested that a "sunset clause" should be included in the levy. It's also worth noting that although the central bank is technically independent, it can not act as a lender of last resort unless the market has total faith in the government that underwrites it. "It must be passed on somewhere", he said.

"While we must balance the interests of all of our stakeholders, the options available to us are limited". "In the second year it is $1.5 billion, because of the net".

"Foreign banks were first encouraged into the Australian market, for very good reasons, by Paul Keating in order to ensure that we had increased competition in the banking system". Last week, Assistant Treasurer Michael Sukkar did not rule out including foreign banks and Queensland MP Andrew Laming says they should be taxed as well.

Finance Minister Mathias Cormann earlier rejected calls to extend the levy to include foreign banks.

He said that still held and no foreign bank operating in Australia "is a major bank in Australia".

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