Victorian Trades Hall Council. The voice of Victorian workers since 1856.Victorian Trades Hall Council. The voice of Victorian workers since 1856.

Members Equity Fine

15 September 2008
MEB is financially sound, has had its investment grade credit rating recently confirmed and is growing strongly despite the challenging market conditions facing all financial institutions. Suggestions by Victorian Shadow Treasurer Kim Wells yesterday casting doubt over MEB are completely without foundation.

 

Under the protection of Parliamentary privilege Mr Wells yesterday described an investment by the Victorian Funds Management Corporation as a “bail out to the Trade Union bank”and further alleged that the Australian Prudential Regulatory Authority   “is considering the Bank’s funding adequacy.”

 

These comments are an outrageous misrepresentation.   I have today written to Mr Wells demanding an urgent meeting to inform him of MEB’s sound financial position and the principles and governance protecting the Bank’s investment processes.

 

The facts are :

 

-The investment by VFMC is part of MEB’s routine capital raising programme. MEB typically raises up to $5 billion dollars each year to fund its lending activities.   So far this year we have completed approximately15 such transactions

 

-MEB’s credit rating remains unchanged and has been recently been re-affirmed by Standard and Poor's

 

-MEB is financially sound, profitable and is growing market share

 

-MEB has a secure funding pipeline

 

-APRA routinely reviews the capital adequacy of all Australian Banks including MEB.   APRA has expressed no concern at all regarding the VFMC investment.

 

-MEB is owned by 37 Industry Superannuation funds

 

Mr Well’s comments are irresponsible, demonstrate a lack of understanding of investment markets and were made without any attempt to seek the facts from MEB.

 

 


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