Triguboff’s had enough of bullied banks
16 December 2016
http://www.australianbankingfinance.com/banking/triguboff-s-had-enough-of-bullied-banks/
Billionaire developer Harry Triguboff has had enough of cowering Australian banks.
“They don’t explain themselves,“ he told AB+F. “They just come and take the blow and they cower down. They’re no good. I want them to be strong. I depend on them.”
According to Australia’s richest man, the nation’s big four lenders have lost the initiative, and consequently, their way.
“If they cower down when they do nothing wrong, what will happen - god forbid - when they do do something wrong. “
After an anus horribilis for Australia’s banking sector - culminating in the public dressing down of the country’s four top executive’s in Canberra - the 83-year-old owner of Meriton Group said he wanted the sector to draw a line in the sand for 2017.
“They have to be stronger and they have to respond, to communicate. Then everybody will better understand what their position here is. I think the banks should explain their situation,” he said.
Reputational disintegration
The problems - including the reputational disintegration of the sector - go far beyond communication, but that’s where the solution begins, Triguboff suggested.
“The banks must definitely tell their story, they must begin telling their story, they just don’t tell, so they are always on the receiving end," he said.
“Why did you do that, why did you do this … How would I run my business if the bank came to me and pointed its finger and asked me why did you do this? I would get frightened. And they are. So, they must believe in what they do.”
For Triguboff, the most alarming scenario for Australian lenders in 2016 was less a question of external but a failure of internal communication.
“They run their business different than me,” he said. “The top end doesn’t know everything that’s happening on the bottom. The bottom is lost. I suggest the top guys deal more with their own people. So, then they will really know the answers better. I want them to know the answers better.
“The little guy knows the answer, but nobody asks him. So its time they work among themselves. And make this story so we understand. They must believe in what they do and then, you know, we might start believing them too.“
The reluctant banker
Triguboff, whose own loan book has more than doubled since July following the sector’s backtracking on apartment and foreign income investors, said he was a reluctant banker and was only fulfilling a need. Nature and economics abhor a vacuum.
“I only do it when the banks suddenly stop. Because the world doesn’t suddenly stop. So I have to keep moving, we have to have a smooth run," he said. "If they (traditional lenders) refuse to give money for whatever reason, I will always step in."
The last time lenders wings were clipped, Triguboff, lent $600 million to underpin apartment sales, when his net worth was far less.
“I never compete (with the banks),” he said. “They have clauses there, which they use on the Chinese now. They can get out and not give the money for some reason. It's nonsense.
According to Triguboff the banks are allowing the regulators to cut their nose, to spite the entire industry.
“They gave the developers money because they know the Chinese will buy - they give the money to the builder, the developer - but then when it comes to the purchaser they say ‘I cant give it to you' for some reason," he said.
“They read what the foreign press says about these bubbles, then our authorities - APRA and ASIC - run to the banks. So the banks get frightened. So they decide they have to be careful … which is very good, they are careful. But I think our banks are really, very, very cautious.”
Knee-jerk reaction
While Triguboff confirmed the Meriton Group mortgage book has grown by around $60 million in five months, to beyond $120 million, he told AB+F the run was finished.
“As it happens, at the moment, I’m not approving any. Today nobody wants my money," he said.
And while Triguboff acknowledged an uneven burst of apartment construction, he decried the ongoing agonising over a property bubble and the knee-jerk reaction of lenders.
“The worst thing we can do is freeze them, those people that talk of bubbles, in my opinion, are very irresponsible. This is an empty continent we need people. Australia is a big place," he said.
“Here in Sydney we have a boom. A great boom,” he said, before adding, “I’m sure that in Melbourne or Brisbane there will be problems, I’m sure there will be - but what can you do?”
However, the billionaire who funds his own developments described himself as an enthusiastic bank customer, when the conditions allowed.
“I think our banks are very good, I do," he said. “The reason I don’t use them is because I can’t get approval from these crazy councils. Once I get approvals I’m happy to use them. I’m happy to owe them a lot of money.
“This year, they’ve learned a lot, and we’ve learned a lot, too. What I have against them is they don’t talk the way I talk. It’s bad for everybody.
"I talk as if I’m the banker."