FINA2001 Corporate Finance: NAB and ANZ Detailed Comparative Report

This report provides a comparative analysis of National Australia Bank (NAB) and ANZ Bank, focusing on various aspects of corporate finance using data from their annual reports spanning from 2014 to 2016. The analysis includes a comparison of major shareholders, executive management, board of directors, and compensation structures for directors and top executives. It further examines the equity composition, including new share issues, debt structure, and sources of debt for both banks. The report also details the dividend policies of NAB and ANZ, highlighting their cash dividend policies, dividend reinvestment plans, and other options for shareholders. Mergers and restructuring activities are briefly mentioned, and the report concludes with a discussion on the stock valuation of both companies, offering recommendations on the potential benefits of investing in their shares. Desklib provides access to similar solved assignments and resources for students.

1
FINA2001 Corporate Finance
Group Assignment

2
Contents
Introduction......................................................................................................................................3
Comparative Analysis of NAB and ANZ........................................................................................4
Major Shareholders..........................................................................................................................4
Executive Management...................................................................................................................5
Directors of the Company................................................................................................................7
Compensation of directors and top executives..............................................................................11
Equity Composition of both the companies (including issue of any new shares).........................13
Debt structure and sources of debt.................................................................................................14
Dividend Policy.............................................................................................................................15
Mergers and Restructuring............................................................................................................15
Value of the Stock and comparison with the current market values.............................................16
Conclusion.....................................................................................................................................18
References......................................................................................................................................20

3
Introduction
Knowledge of the corporate finance is very essential to make decisions regarding various
business processes such as capital funding, valuation of company stock and bonds and many
other similar decisions. There are many ways to raise the capital funds but it is essential to
choose the best method according to the requirement and structure of company. Comparative
analysis between two companies provides financial information regarding the companies chosen
and provides deep insight into the financial performance companies selected (Horngren, 2012).
In this report comparative analysis of major banking sector companies of Australia has
been examined using detailed analysis of annual reports of the selected companies of last three
years. The companies selected for this purpose are National Australia Bank and ANZ Bank. Both
of these bank rank among top 10 banks of Australia. In this report comparison has been
performed between both the Australia Bank that includes detailed information about the major
shareholders of the companies, executive management of the company, directors of the
company, compensation provided to the directors and top executives, dividend policies and
comparative evaluation of the performance of the companies and valuation of stock.
Recommendations and conclusions will also be provided on whether it is beneficial to buy the
shares in companies or not. For the purpose of the comparison annual reports of year 2014, 2015
and 2016 has been taken as annual report of year 2017 of ANZ is not available yet (Giovanis,
2010).

4
Comparative Analysis of NAB and ANZ
Major Shareholders
Below is the list of the major shareholders of the NAB as described in annual report of
year 2016 is as under. Only such shareholders are named here that poses 5 % or more
shareholding during the year.
Name of Shareholder Number of
Shares
Percentage
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 561,686,718 21.14%
J P MORGAN NOMINEES AUSTRALIA LIMITED 338,106,136 12.73%
CITICORP NOMINEES PTY LIMITED 137,574,120 5.18%
(NAB Annual Report 2014, 2015 and 2016)
Below is the list of the major shareholders of ANZ Bank during the financial year 2016.
This data has been extracted from annual report of year 2016. The shareholders are provided here
have shareholding of 5 % or more.
Name of Shareholder Number of
Shares
Percentage
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 592,529,071 20.24%
J P MORGAN NOMINEES AUSTRALIA LIMITED 398,719,922 13.62%
NATIONAL NOMINEES LIMITED 207,699,829 7.09%
CITICORP NOMINEES PTY LIMITED 189,889,027 6.49%
(ANZ Annual Report 2014, 2015 and 2016)

5
Executive Management
Executive management of any company is responsible for day to day activities and to
make the important decisions in the business process. The management people are very
important people in the organization and they are considered as the leaders who lead the
company to the right path.
The executive team of the National Australia Bank is provided below:
Name of the Executive
Officer
Position in the company Other Information
Andrew Thorburn GROUP CHIEF EXECUTIVE
OFFICER & MANAGING
DIRECTOR
Has hold the position in
August,2014
Mike Baird CHIEF CUSTOMER
OFFICER – CORPORATE
AND INSTITUTIONAL
BANKING
Has hold this position from
April, 2017
Antony Cahill CHIEF OPERATING
OFFICER
Has hold this position from
August, 2016
Sharon Cook CHIEF LEGAL AND
COMMERCIAL COUNSEL
Has hold this position from
April, 2017
David Gall CHIEF RISK OFFICER Working in senior
management since 2008
Andrew Hagger CHIEF CUSTOMER
OFFICER - CONSUMER
Has hold this position from
August, 2016

6
AND WEALTH
Anthony Healy CHIEF EXECUTIVE
OFFICER BANK OF NEW
ZEALAND
Working at this position from
May 2014
Gary Lennon CHIEF FINANCIAL
OFFICER
Has hold this position from
March
Angela Mentis CHIEF CUSTOMER
OFFICER, BUSINESS &
PRIVATE BANKING
She hold this senior position
from August, 2016
(NAB Annual Report 2014, 2015 and 2016)
The executive management list of person in the ANZ Bank and it is given below:
Name of the Executive
Officer
Position in the company Other Information
Shayne Elliott Chief Executive Officer He has been appointed CEO
of ANZ 1 January, 2016
Maile Carnegie Group Executive Digital
Banking
She joined ANZ in year 2016
at this post
Farhan Faruqui Group Executive International He has joined the ANZ in
August 2014
Gerard Florian Group Executive Technology He has joined at this position
since January 2017
Alexis George Group Executive, Wealth
Australia
She has joined ANZ in year
2013 as the Managing

7
Director
David Hisco CEO New Zealand and Group
Executive, Asia Wealth,
Pacific and International
Retail
He spent almost 30 years of
life at ANZ and has been
appointed at this position in
year 2016
Graham Hodges Deputy Chief Executive
Officer
Has joined at this position in
May 2009
Michelle Jablko Chief Financial Officer She joined at this position in
July 2016
Fred Ohlsson Group Executive, Australia Joined since February 2016
(ANZ Annual Report 2014, 2015 and 2016)
Directors of the Company
The members of board of directors of NAB and ANZ and their information are discussed
as follows:
NAB
Board Of Directors Position Information
Kenneth R Henry C Non-executive director
and Chairman
Have 30 years of experience
in economic, policy and
governance.
Andrew G Thorburn Group Chief Executive
Officer
Have significant experience
in banking and finance and
has also served as Managing

8
director and CEO of the
Bank of New Zealand.
David H Armstrong Non-executive director Have significant years of
experience in professional
services and posses in-depth
knowledge in banking and
capital markets
Philip W Chronican Non-executive Director Have significant experience
ion banking and finance in
Australia and New Zealand.
Peeyush K Gupta Non-executive Director Have 30 years of experience
in wealth management and
has served the responsibility
of the director of many
corporate
Anne J Loveridge Non-executive director Have 30 years of experience
in the financial services
having wide knowledge in
banking sector.
Geraldine C Mcbride Non-executive director Former President of global
software company SAP and
also served the role of CEO
at Mywave company.
Doug A Mckay Non-executive director Member of the board audit

9
and nomination committee
in the company. Have a
significant knowledge an
experience in the Australian
banking market.
Ann C Sherry Non-executive director Have significant experience
in the banking and tourism
industries in Australia and
New Zealand.
Anthony K.T. Yuen Non-executive director Have over 40 years
experience in international
banking and finance and has
served the role of senior
executives in many banks.
(NAB Annual Report 2014, 2015 and 2016)
ANZ
Board of Directors Member Position Information
David Gonski Chairman and independent
non-executive director
He is an ex-officio member
of the board committee of the
company. He is regarded as
the most respected business
leader in the Australia
Shayne Elliott Chief-executive officer and Has over 30 years of

10
executive director experience within banking
sector of Australia.
Llana Atlas Independent non-executive
director and chairman of the
human resources committee
Has strong background in
financial services and legal
experience. He has also
worked at senior executive
roles in Westpac.
Paula Dwyer Independent non-executive
director and chairman of the
audit committee
Extensive experience in
financial markets and risk
management
Jane Haltom Independent non-executive
director
Has joined the company in
2016 and is also a member of
the human resources
committee of the company
Lee Hsein Yang Independent non-executive
director
Has joined the company in
the year 2009 and is also a
member of the risk
committee
Graeme Liebelt Independent non-executive
director
Has over 23 years of
experience off senior
executive roles in strategy
development
(ANZ Annual Report 2014, 2015 and 2016)

11
Compensation of directors and top executives
National Australia Bank (NAB)
The compensation of the directors and top executives of the bank are decided by the
remuneration committee developed by the board of directors. The remuneration framework is
developed as per the section 300A of the corporations Act 2001 (NAB Annual Report 2014,
2015 and 2016). The remuneration of the senior executives comprises of fixed remuneration and
short and long-term incentives based on their performances. The remuneration structure can be
illustrated as follows:
(Source:https://www.nab.com.au/content/dam/nabrwd/About-Us/shareholder%20centre/
documents/2016-annual-financial-report.pdf )
ANZ
The remuneration of the senior executives is developed on the basis of the Corporations
Act 2001 and comprises of fixed and variable remuneration (ANZ Annual Report 2014, 2015

12
and 2016). The fixed remuneration comprises of basic salary while variable consists of the
benefits achieved by the executives on the basis of their performance and can be illustrated as
follows:
(Source: http://shareholder.anz.com/sites/default/files/anz_-_annual_report_2016.pdf)
Equity Composition of both the companies (including issue of any new shares)
Equity is classified as the composition of the equity shares and other equity securities.
List of composition of equity in case of the Company NAB as provided in 2016 annual report as
given as under:
Particulars 2016
($m)
2015
($m)