Lurking in the background of the buy now, pay later (BNPL) market is the original BNPL company, Klarna, a Swedish-based private bank that offers online payment solutions.

With its BNPL app launching in Australia in late January, just in time for the lockdowns, Klarna’s local operation is a joint venture with the Commonwealth Bank of Australia (ASX: CBA). CommBank has taken a 5.5% stake in the Klarna and the companies will jointly fund and own (with 50:50 ownership rights) Klarna’s Australian and New Zealand business.

An impressive entry 

Australian Associated Press (AAP) reports that consumers will see Klarna as an option at checkouts as a payment option before the end of the year, and it can already be used for online purchases. In fact, more than 50 retail groups in Australia accept Klarna payments online. According to the AAP article, its Australia and New Zealand boss Fran Ereira says it will definitely be in stores by 2021. 

There have been more than 250,000 downloads of the program since it became available in late January – that’s approximately 50,000 per month. In contrast, Afterpay Ltd (ASX: APT), the undoubted market leader, has had approximately 90,000 downloads for every month to June. Next in line was was Zip Co Ltd (ASX: Z1P), which was downloaded about 80,000 times per month.

For a product with very little marketing so far, I think that’s very impressive from a standing start. In addition, Klarna will be offered to the 7 million users of CommBank’s digital banking services. At the moment Afterpay boasts 3 million Australian users. So while Klarna is playing catch up, the CommBank partnership provides significant competitive advantages.

One of these is the onboarding process. As research for this article, I downloaded and opened an account with Klarna. It asked me if I wanted to link it to the CommBank app, which I did. In less than 2 minutes, I had an account with payment cards already registered, and set up with my fingerprint for security. The company is also working to make it function by swiping your phone, much like payment with a credit card.

What’s more, customers can use the Klarna app with the Apple store and Amazon.com. This is currently not available direct from these companies with Afterpay in Australia. So, while Afterpay recently announced a deal to have its product on all Apple Pay and Google Pay accounts, Klarna is already there. 

The Australian BNPL market

This is undoubtedly going to have a major impact on the Australian BNPL market. In fact, Australia is one of the few sizeable markets where this sort of partnership would work, in my view. As one of the big four banks, CommBank has a massive national network. It is undeniably Australia’s major payments processor already.

In addition, from my perspective there is no consumer loyalty to Afterpay or Zip Co. Why would there be? It is a simple service. If another company can provide it just as easily, then why not use that?

While it is going to take some time, in my opinion Klarna’s impact on Afterpay, Zip Co, Splitit Ltd (ASX: SPT) and Openpay Group Ltd (ASX: OPY) will be gradual and corrosive.

I think the Australian market is already too crowded. While OpenPay and Splitit have slightly different business models, I am unsure whether both of these will survive over the next, say, 3 years. Moreover, there are still others with slight variations on the business model, as well as others preparing to list soon.

Between Klarna, Zip Co, and Afterpay, I cannot really see the room for any others. Earlier in the year I invested in Sezzle Inc (ASX: SZL), and I did so because Sezzle does not trade in Australia, it is just listed here. The company launched in the wide blue ocean of the US$5 trillion retail market, rather than the tight waterways and creeks of Australia and New Zealand (to stretch a metaphor).

With Klarna now starting to post strong signs of initial momentum, that thesis is stronger than ever with me. In addition, the Australian environment, as well as the European environment, is very heavy on regulation. I feel that is going to cramp the progress of Australia-bound BNPL companies. 

Foolish takeaway

I have long been bearish on Afterpay, mainly due to its current market cap of nearly $20 billion. While Afterpay will probably still remain the big dog in the BNPL market, I think the company’s market share will come under threat from the Klarna–Commbank partnership. I think this also applies to Zip Co.  

However, both the large players and Sezzle are building a great customer base in the US, and Afterpay and Zip are also growing in the UK. Results from these markets, and maybe Canada, will be very interesting to watch over the next 18–24 months.

More reading

• What APRA’s latest release means for ASX bank shares like Westpac
• 3 Warren Buffett quotes to start the week off right
• Why these brokers are telling you to buy the crashing IAG share price today
• Is it time to dollar-cost average into ASX shares?
• All Technology Index celebrates 6 months with stunning outperformance

Daryl Mather owns shares of Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s hard to believe that the CSL Limited (ASX: CSL) share price is almost exactly where it started the year, at $275 per share. Well, at least it was until this morning’s open which has seen the CSL share price climb 0.78% to trade at $277.89 at the time of writing. 

A global health crisis should be CSL’s time to shine! The problem is that CSL’s products rely heavily on donated plasma as a key ingredient. This plasma comes from donors in the United States and Europe where coronavirus related shutdowns have created supply issues.

Plasma is used for CSL’s immunoglobulin and albumin business lines which in the 2019 financial year made up 56% of the company’s revenue. It’s no surprise then that analysts are forecasting a decline in revenue in the year ahead.

But looking at the company’s long-term prospects, I think there are a lot of attractive reasons to own shares in the company today.

CSL could be one of the world’s best companies

I think CSL could be one of the world’s best companies because of its strong flywheel effect. A flywheel is a combination of processes that feed off each other and can rapidly grow a business over time.

CSL’s focus on new, innovative treatments and reinvesting profits has helped the company to compound returns rapidly over the last nine years.

CSL has a wide intangible asset moat

You can give your wealth a serious boost by buying and holding shares in companies that have strong economic moats, or competitive advantages. Economic moats work to protect the company from the attack of competitors. In my view CSL has built a wide intangible asset moat through its patented rights to produce and sell lifesaving medicines and immunotherapies. Although these rights can be challenged and have a finite life, CSL’s diverse portfolio of products makes the moat more robust, which bodes well for the CSL share price.  

CSL has a monster 42% return on equity

One of the benefits of being a top dog with a large competitive moat is that you can produce huge returns on investor equity. In fact, CSL’s monster 42% return on equity (ROE) is far above the 21% sector average for pharmaceuticals according to data from valuation guru Aswath Damodaran.

Is the CSL share price a buy today?

The slowdown in plasma collections will certainly have a negative impact on the short-term growth of the CSL share price. However, I still think that CSL will be a great performer in the years to come. Perhaps it is finally time for me to add the company to my own long-term portfolio.

More reading

• Will the CSL share price crack $300 in August?
• 3 unloved ASX growth shares that could make you rich
• 3 junior ASX healthcare shares with explosive growth potential
• ASX 200 Weekly Wrap: ASX has week of high volatility
• Should fixed-interest investments be part of your ASX share portfolio?

Regan Pearson has no position in any of the stocks mentioned.

You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Temple & Webster Group Ltd (ASX: TPW) share price is storming higher after the release of its full year results.

At the time of writing the online homewares retailer’s shares are up 5.5% to a record high of $8.21.

How did Temple & Webster perform in FY 2020?

For the 12 months ended 30 June 2020, Temple & Webster reported revenue of $176.3 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of $8.5 million. This represents a 74% and 467% increase, respectively, on the prior corresponding period.

One key driver of this strong growth was a 77% year on year increase in active customers to 480,000.

Temple & Webster reported a cash flow positive year, with ending cash of $38.1 million and no debt. These figures exclude the proceeds from its recent $40 million placement.

“Great set of numbers.”

Temple & Webster’s CEO, Mark Coulter, was very pleased with the company’s performance over the 12 months.

He said “I am pleased to report a great set of numbers in the face of some very tough retail conditions. I am so proud of the Temple & Webster team who have risen to the challenge of continuing to look after our customers while transitioning to a work from home environment.”

Mr Coulter was particularly pleased with its net promoter score. This measure of customer satisfaction reached a record of 65%+ during the fourth quarter.

“Out of all the great numbers that we are releasing today, the record level of customer satisfaction is the one that I am most proud of. Many customers are trying online shopping for their homes for the first time out of necessity and it’s clear the inherent benefits of online, being range, value and convenience, have resonated with those customers,” he commented.

Trading update.

Pleasingly, Temple & Webster has started the new financial year in a positive fashion.

Management advised that July’s revenue growth rates are in line with those experienced throughout the fourth quarter. Fourth quarter revenue was up 130% on the prior corresponding period.

Looking ahead, Temple & Webster advised that it is committed to a high growth strategy to take advantage of the structural shift towards online. It intends to capitalise on both organic and inorganic opportunities.

This strategy supports Temple & Webster’s stated goal of becoming the first place Australians turn to when shopping for their homes and work spaces.

More reading

• Which ASX furniture share has the edge?
• All Technology Index celebrates 6 months with stunning outperformance
• 2 ASX shares leveraged to the eCommerce shift
• Extended jobkeeper: Which ASX shares to buy?
• 4 trends to invest in before August earnings season

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Bigtincan Holdings Ltd (ASX: BTH) share price is charging higher following the release of its fourth quarter update.

At the time of writing the sales enablement automation platform provider’s shares are up 6% to 98 cents.

How did Bigtincan perform in the fourth quarter?

Bigtincan continued its strong form in the fourth quarter and recorded customer cash receipts of $10.4 million. This was an 89% increase on the prior corresponding period.

As a result of this strong finish to the year, Bigtincan’s annualised recurring revenue (ARR) grew 53% in FY 2020 to $35.8 million. This means that its ARR has now grown at a compound annual growth rate of 50% over the last five years.

On an organic basis, the company’s ARR grew 40% for the year to $32.7 million. Management believes this demonstrates the ongoing strength of the organic growth engine at Bigtincan.

CEO and Co-founder, David Keane, commented: “Bigtincan closed FY20 with a strong quarter, achieving a total ARR as at 30 June of $35.8m, up 53% from 30 June 2019, with organic ARR growth of 40% to $32.7m and a 5-year CAGR of 50%, demonstrating the ongoing success of our organic growth engine, together with the benefits of strategic M&A activities.”

At the end of the fourth quarter, Bigtincan had cash and cash equivalents of $71.9 million. This was boosted by a $35 million institutional placement and a $7.5 million share purchase plan during the quarter.

Positively, the company advised that it saw no impact on payment terms from enterprise customers during the pandemic. Nor did it have extended potential bad debt exposure.

Market commentary.

In addition to its results, the company provided investors with an update on how the pandemic is impacting its market.

The good news for Bigtincan is that the International Data Corporation expects spending on the digital transformation of business practices, products, and organisations to continue at a solid pace despite the challenges presented by the pandemic.

Management notes that the focus on digitisation and Bigtincan’s unique strength in mobility, provides it with opportunities for tailwinds going into FY 2021.

In light of this, it appears confident that it is commencing the new financial year well positioned for future growth.

Finally, the company continues to expect to deliver on its 30% to 40% organic revenue growth in FY 2020 with a stable retention rate.

More reading

• 2 ASX tech shares to buy and hold beyond 2025
• 4 ASX tech shares to buy that aren’t BNPL shares
• 3 exciting small cap ASX shares to watch in FY 2021
• Why Nearmap and 2 other ASX tech shares are surging higher today
• How to get rich by investing in small cap ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX gold miners are in for another strong trading day after the gold price surged to a record high this morning even as some question its ability to break over US$2,000 an ounce.

The spot gold price jumped 0.5% to US$1,953 and is comfortably ahead of its previous peak of US$1,921 that it hit in September 2011.

The precious metal couldn’t spend much time at those dizzying heights nine years ago and quickly tumbled. Is gold facing the same fateful outcome this time round?

Path of least resistance

No one can say for sure, but I think there are more reasons for gold to run higher than capitulate. This means the next stop for the safe haven commodity is US$2,000, as outlined back in April on the Motley Fool.

There are a few significant differences to gold’s ascend this time compared to 2011 that makes me a bull.

For one, gold is peaking at the start of the COVID-19 crisis while it hit a crescendo two years after the GFC.

Fundamentals shining brighter

This means there are still more fundamental levers for gold to pull to extend its run in 2020. We can’t quite say the same about the post-GFC era when the global economy was on the mend.

Sure, if we get the touted V-shape recovery from the COVID-19 fallout, gold’s time in the sun could be short-lived. But even then, gold still can outperform into 2021 – and there are enough signs for us to question the probability of a V-shaped snapback.

Further, the era of record low interest rates and central bank/government stimulus isn’t about to come to a close in the near-term either. If anything, these tailwinds for the gold price is likely to continue till at least 2022.

Currency tailwind just starting

The other significant difference in 2020 is the US dollar. As gold historically moves in opposite direction to the greenback, the outlook for the currency is important.

Back in 2011, the US dollar was struggling to emerge from a three-year crash. Remember a time when the Aussie was fetching well over US$1?

Gold’s fortunes started to turn about the same time as the US dollar stabilised and started to climb. This time, the US dollar was trending higher and seems to have reached a peak.

The US Dollar Index (a measure of the greenback against a basket of key currencies) is currently trading at 93.7 after falling around 9% since March. Back in September 2011, the index was trading around 80 as it came out of a trough.

Socially-distanced crowded trade

The third difference is we have fewer gold bulls this time than the last. Back then, a few leading brokers and experts predicted gold is heading to around US$5,000 an ounce (or a target that’s similarly outlandish).

I’m starting to see a few of these blue-sky forecasts creeping back into the media, but it’s nowhere at the level as we witnessed in the aftermath of the GFC.

This is significant because nothing says “this is the end of a trend” like a crowded trade.

More reading

• ASX 200 falls 0.7%, Qantas and Afterpay make a partnership
• Why Adbri, Domino’s, Event, & Viva Energy shares are dropping lower
• The latest ASX 200 stocks crashing on broker downgrades
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 worst performing ASX shares last week

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The gold price hit a new high of over $2,700 an ounce yesterday as investors sought safe haven assets. Continued political tension between the United States and China have added to uncertainty, along with rising coronavirus cases. The gold price is now up more than 20% since the start of the year when it was trading around $2,200 an ounce. 

Gold has been used as a method of wealth preservation for decades. It can be used as a hedge against inflation and to provide diversification benefits thanks to its negative correlation with paper securities. One way to gain exposure to gold is through ASX shares in gold miners.

Here are 3 ASX gold miners that will help you get on the gold train. 

Newcrest Mining Limited (ASX: NCM)

Newcrest is one of the world’s largest gold mining companies, operating gold, silver, and copper mines in Australia, Canada, and Papua New Guinea. The Newcrest share price is up 21% for the year and 67% from its March low.

The gold miner reported a strong fourth quarter with gold production up 7% to 573,175 ounces. Over the full year, Newcrest produced 2,487,739 ounces of gold, in line with guidance. Silver production was 983,431 ounces in FY20, with 137,623 tonnes of copper produced. 

Northern Star Resources Ltd (ASX: NST)

Northern Star Resources is a gold miner and explorer operating in Western Australia, the Northern Territory, and Alaska. The Northern Star share price is up 43% for the year and 76% from its March low.

The company reported record gold production in the quarter ending June 2020, with 267,261 ounces of gold recovered. Over the full year, Northern Star recovered 905,177 ounces of gold. At the end of the quarter, the company had cash, bullion, and investments, of $770 million with corporate debt of $700 million. The company also announced that $200 million in corporate debt was repaid in early July. 

Saracen Mineral Holdings Limited (ASX: SAR) 

Saracen is involved in the exploration and mining of gold and other minerals in the Kalgoorlie Region of Western Australia. The Saracen share price is up 95% for the year and 122% from its March low.

In the quarter ending June 2020, Saracen produced 145,830 ounces of gold with full year production of 520,414 ounces, ahead of guidance. Production guidance for FY21 is for upwards of 600,000 ounces. Saracen reported cash and bullion of $369 million at 30 June 2020 and debt of $321 million.

More reading

• Why 5G Networks and these ASX shares just hit record highs
• 5 things to watch on the ASX 200 on Tuesday
• Gold hits record high! Is it too late to buy this gold miners ETF?
• ASX 200 up 0.25%: Lynas rockets on U.S. deal, gold miners surge, bank shares tumble
• Why Lynas, Northern Star, REA Group, & Sezzle shares are storming higher

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Do you have $1,500 to invest into ASX shares? There are a few shares that I’d buy today.

You could decide to invest your entire amount into one share pick or split it across two or even all three ideas. However, it probably wouldn’t be very efficient to invest just $500 into three picks – it would cost more brokerage.

Here are my three ideas:

Bubs Australia Ltd (ASX: BUB)

I believe that Bubs has a very promising long-term future. The infant formula business just announced its final quarter of FY20 which saw a revenue decline due to the huge amount of growth in the FY20 third quarter.  However, the company reported a strong 32% increase in FY20 revenue to $62 million.

I think Bubs an exciting ASX share because of a few reasons.

The biggest reason is the large potential of the international markets for Bubs. In the last quarter of FY20, China direct sales increased by 26% compared to the prior corresponding period and represented 22% of gross revenue. Other export markets, which excludes China, saw fourth quarter sales growth of 71% and this represented 8% of total sales.

Asia alone is a huge market and can support a much larger Bubs business. Hopefully it can continue to grow its revenue by pleasing double digits each year.

The company also made two other exciting announcements yesterday. Jennifer Hawkins will be its global brand ambassador and it also launched Vita Bubs, a vitamin and mineral supplement range. The company expects this will materially add to domestic revenue.

In five years I believe the ASX share will be much larger, particularly if it’s able to win a decent market share with its organic grass-fed (cow) milk infant formula range.

I’d be very happy to buy shares at the current Bubs share price, particularly after yesterday’s dip.

Magellan Global Trust (ASX: MGG)

Magellan Global Trust is one of my favourite ASX share picks at the moment.

The listed investment trust (LIT) has a number of positives. It only invests in high-quality global shares like Alphabet, Microsoft, Tencent and Alibaba. These types of companies have business models that should have resilient demand even in the face of COVID-19. I like the diversification the LIT offers. 

The Aussie dollar has strengthened considerably against the US dollar, it’s now worth around US$0.72, which is the highest it’s been over the past year. It’s better to buy US shares when the Aussie dollar is stronger rather than lower (all other things being equal).

I like being able to buy LITs and LICs (companies) at a discount to their net asset values (NAV). At the current Magellan Global Trust share price it’s trading at a 3.5% discount to the NAV. Not a huge discount, but it’s cheaper than if you paid for the underlying shares yourself.

As a bonus, the ASX share targets a 4% distribution yield. I think that’s a good yield in the current world we live in where interest rates are almost 0%.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is LIC that also largely avoids ASX shares. It targets international shares. It’s actually run by Magellan Financial Group Ltd (ASX: MFG) co-founder Chris Mackay. He has steered MFF to strong returns over the past decade. MFF’s total shareholder returns has been an average of 17.4% per annum over the past ten years.

One of the main benefits about investing in MFF Capital is that it has lower costs compared to most other internationally-focused LICs. MFF pays a fixed management fee in dollar terms. So as MFF gets bigger its costs as a percentage of assets reduces.

It has two large, high-conviction ideas with Visa and Mastercard, the payment giants. Those two holdings alone make up more than a third of the LIC’s holdings. I really like them as ideas because they’re leveraged to whatever happens next with COVID-19. An increase of ecommerce purchases would help Visa and Mastercard. More in-store purchases would also be beneficial if global COVID-19 cases and COVID-19 restrictions improve.

The ASX share also has a large cash position (41.3% of the portfolio) which is a useful thing to have when share prices are so high, COVID-19 is still spreading and there’s an unpredictable US election coming up. It’s defensively positioned for whatever happens next. 

The MFF Capital weekly pre-tax net tangible assets (NTA) was $2.78 on 24 July 2020, compared to the current share price of $2.64. That’s a 5% discount. I’d prefer to buy with a double digit discount, but a 5% discount is good for this strong-performing LIC.

Foolish takeaway

I really like all of these ASX shares. At the current prices I’d probably go for Bubs. Though I think the US election will open up some opportunities for US shares.

More reading

• My ASX share of the week
• 2 top ASX growth shares to buy for long-term growth
• Why I would buy Pushpay and these ASX growth shares in August
• Why Bubs, IAG, Star Entertainment, & Webjet shares are dropping lower
• Bubs share price sinks lower on Q4 update and new product launch announcement

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd and MAGLOBTRST UNITS. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The oOh!Media Ltd (ASX: OML) share price closed down 3.6% yesterday.

Last week, oOh!Media looked to have snapped a lengthy losing streak, finishing the week up 6.3%. But yesterday’s losses resume the downward trend that has battered investors in the stock since the outset of the COVID-19 pandemic.

The company’s share price is now down a painful 65.8% since 20 February, when the broader market hit all-time highs. Over that same time, the All Ordinaries Index (ASX: XAO) has managed to claw back much of its early losses, currently down 15.0% from the high.

What does oOh!Media do?

Brendon Cook founded oOh!Media in 1989 under the name Outdoor Network Australia. It’s since become one of the largest operators of outdoor advertising in Australia.

Among other outlets, the company operates digital billboards in South Australia, New South Wales and the Northern Territory. It counts both Qantas Airways Limited (ASX: QAN) and Sydney Airport Holdings Pty Ltd (ASX: SYD) as major customers.

What next for oOh!Media?

Advertising companies across the board have been hit hard by the fallout of COVID-19. oOh!Media is no exception.

You need look no further than its 2 major clients listed above to see why. Many Australians have been literally stuck in their homes under rigorous lockdown conditions, and very few have travelled interstate, let alone internationally.

Hence Qantas share price has tanked 45% since 20 February, and Sydney Airport’s stock has tumbled 34.2%.

It’s hard to envision a more difficult environment for an outdoor billboard company.

At the current share price, the stock trades at a price-to-earnings ratio of 17.9 times. Until social distancing restrictions ease and travel resumes, it’s hard to see the earnings part of that equation rise.

In the meantime, the share price may have further to fall. But in my view, this stock is one to keep an eye on. It could bounce strongly on any news of a vaccine or lifting of travel restrictions.

More reading

• ASX 200 Weekly Wrap: ASX has week of high volatility
• A top ASX dividend share to buy next week
• How are 2019’s tech IPOs performing?
• Which ASX 200 shares are the safest?
• Is the Qantas share price in the buy zone?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended oOh!Media Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price will be on watch on Tuesday after the release of an update on its dealings with AUSTRAC this morning.

What did Westpac announce?

This morning Westpac provided the market with an update on a reporting issue related to Threshold Transaction Reports (TTRs) that were described in its interim results in May. TTRs are bank transfers of more than $10,000 into and out of the country.

In its results Westpac noted that it had self-reported TTR issues to AUSTRAC. This includes TTRs filed with incomplete or inaccurate information, as well as an estimated 60,000 to 90,000 TTRs that had not been reported to AUSTRAC.

However, since then, in response to a notice from AUSTRAC and following further investigations, Westpac has provided the financial intelligence agency with updated information relating to these TTR issues.

This includes approximately 175,000 transactions that were not reported to AUSTRAC and approximately 365,000 TTRs that were reported to AUSTRAC but may have contained incomplete or inaccurate information.

What happened?

The company explained that a significant proportion of the potential reporting issues relate to a range of complex scenarios where the legislation requires Westpac to exercise judgement on how multiple transactions may be aggregated and whether a threshold transaction has actually occurred.

In light of this, not all of the above TTRs may be breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act.

Westpac advised that it continues to engage with AUSTRAC in relation to its TTR issues, and notes that the numbers above may change. It also reminded investors that AUSTRAC has warned the bank that it may amend its statement of claim to include allegations arising from its investigations into these TTR issues.

New Chief Operating Officer appointment.

In other news, Westpac has announced the creation of a new Group Operating Office, bringing together Group Operations and Group Technology, and has appointed Scott Collary to lead this division as Chief Operating Officer (COO).

Mr Collary joins Westpac from the Bank of Montreal in Canada where he has held the role of Chief Information and Operations Officer for its North American Personal & Business Banking, Private Wealth and Global Asset Management divisions.

Prior to this, Mr Collary held senior positions at Australia and New Zealand Banking GrpLtd (ASX: ANZ) and Citigroup.

More reading

• What APRA’s latest release means for ASX bank shares like Westpac
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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