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Australian banks' market cap falls in Q4'19 amid alleged violations, misconduct

Among the 20 largest banks in Asia-Pacific, only Australian banks reported quarter-over-quarter drop in market capitalization in the three months ended Dec. 31, 2019, according to S&P Global Market Intelligence.

Mired in alleged regulatory violations and misconduct, Westpac Banking Corp. was hit the hardest, with its market cap down 15.40% as of Dec. 31, 2019, compared to a quarter earlier. It was followed by National Australia Bank Ltd.'s 15.22% quarter-over-quarter decline, Australia & New Zealand Banking Group Ltd.'s 13.59% drop and Commonwealth Bank of Australia's 1.15% fall.

In mid-November 2019, the Australian Transaction Reports and Analysis Centre, or AUSTRAC, filed civil penalty orders against Westpac, alleging the bank breached money-laundering laws on more than 23 million occasions, and failed to carry out appropriate due diligence on transactions that have potential child exploitation risks.

The bank is now under investigation by the country's banking regulator, the Australian Prudential Regulation Authority. The allegations had led to the resignation of then-CEO Brian Hartzer on Nov. 26 and prompted Chairman Lindsay Maxsted to bring forward his retirement to the first half of 2020. Shareholders had also voted down the bank's remuneration plan for executives.

NAB has also faced a court action since mid-December from the Australian Securities and Investments Commission for charging fees for no service from December 2013 to February 2019.

However, the rest of the top 20 Asia-Pacific banks reported gains in market cap in the same period.

Chinese banks continued to sit atop the list. Industrial & Commercial Bank of China Ltd. remained the largest bank in the region, with a market cap of US$294.54 billion as of Dec. 31, 2019, up 9.71% from the previous quarter.

Postal Savings Bank of China Co. Ltd., which completed its secondary listing in Shanghai in December, rose six spots to 9th after its market cap rising 39.46% quarter over quarter.

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