This report aims to analyse the annual report of two financial institutions, which is The Macquarie Bank Ltd and The Commonwealth Bank of Australia and make a detail comparison between the performances of the bank in terms of business strategy, bank's liquidity and ratios. The findings reveal that The Commonwealth Bank of Australia has a well diversified business platform with leading domestic market position is banking, life insurance and wealth management. Besides that, the bank has strong asset quality that benefits from good underwriting and risk management policies.
As for Macquarie Bank Ltd, the findings reveal that the bank has a solid earnings track record since its first listing on the Australian Stock Exchange. The bank has a well diversified business operation and well-established risk discipline and conservative financial policies. As for the Commonwealth Bank of Australia, most of the earnings are largely on banking operations. Besides that, the bank is primarily reliant on Australian and New Zealand economies. Next, is that the bank's full leverage from investment and insurance divisions yet to materialize.
As for Macquarie Bank Ltd, the findings reveal that the bank's capital adequacy strained by increased appetite for private equity investment and the bank is facing highly competitive and inherently market segments, including investment banking. Banks are the dominant financial institutions within a financial system and account for the largest share of total assets. As such, they are important in facilitating the flow of funds between savers and borrowers. Investment Bank and Merchant Bank play an extremely important role in the provision of advisory services to their corporate and government clients.
These types of institutions are less inclined to provide actual debt finance to their clients, but rather will advice their clients on how to meet their funding requirements in domestic and international money markets and capital markets. Investment banks and Merchant bank manage debt and equity on behalf of their clients and also underwrite such issue. Other aspects of their off-balance sheet advisory include balance sheet restructuring, foreign exchange dealing, investment advice, risk management advice, mergers and acquisitions, project finance and securitisation.
Commonwealth Bank Australia The Commonwealth Bank Group is one of Australia's leading financial services organizations and provides retail, business and institutional banking, funds management, superannuation, insurance, investment and broking services. It is the most recognized brand in the Australian financial services industry. Macquarie Bank Ltd Macquarie Bank is a pre-eminent provider of investment banking and financial services. In Australasia, Macquarie provides a full range of investment, financial market and advisory products and services.
Internationally it focuses on select markets where we are able to provide special value. Commonwealth Bank Australia is a registered deposit taking institutions and a publicly listed company on the Australian Stock Exchange. (Appendix 1) As the deposit taking institutions, the bank is subjected to prudential supervision by the Australian Prudential Regulation Authority (APRA) that covers both banking and insurance sectors. The bank is the principal operating entity and the parent entity for the Commonwealth Bank Australia group. Macquarie Bank Ltd
"As a listed Australian corporation, Macquarie has a reasonably broad ownership base, with its share price increasing strongly since its public listing in July 1996, corresponding with consistently improving profitability. "(Nikki, T. , 1996) It commenced operations in 1969 as Hill Samuel Australia, before becoming a trading bank in 1985. Incorporated under the Corporation Act 2001, it is licensed bank under the Banking Act 1959, and is regulated and supervised by the Australian Prudential Regulation Authority (APRA). (Appendix 1)