#grindlays plc

[whats-in-a-sentence]

The review pointed out that Westpac's problem loans had been much in line with those of the National Australia Bank in the late 1980s but had recently deteriorated and were closer to the level of ANZ, whose performance had been adversely affected by its acquisition of the UK bank Grindlays PLC. The Westpac document noted:

Westpac had no such external influences. Its problems must therefore have been driven by a drop in the quality of the loan portfolio in its base business . . . Westpac has performed worse than the market. Westpac is presently underperforming shareholder expectations as a result of a reduction in loan quality. The general reason is that the credit risk management process has not yet made the transition from operating in a regulated environment. The specific reason is that Westpac has not been practising portfolio management . . . Management of credit risk is presently carried out through a combination of management of individual credits and a procedures-oriented approach to credit policy. The dominant concentration is on the approval process for individual credits. The theory behind this approach is that if individual credits are good, then the sum of the individual credits must also be good.

"Westpac: The Bank That Broke the Bank" - Edna Carew