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Capital market strategy
Capital Market Strategy
St.George sources the majority of its funding from the retail deposit market in Australia through its extensive distribution network and large customer base. Nonetheless, to meet the growing need for wholesale funding due to balance sheet growth, St.George has pursued a strategy of diversifying its funding markets since the mid 1980s.
Diversification
Access to various global markets has been established to provide cost effective, flexible and reliable funding. Substantial effort has been directed towards establishing a strong profile for St.George in the major offshore capital markets, complementing a strong domestic presence.
In these markets, we seek to broaden our investor base as much as possible, and pursue an active marketing and communication strategy. A program of regular issues in these markets has also been instrumental in attracting investor focus.
St.George views its funding diversification from a number of different perspectives:
- Currency, with recent public issues denominated in USD, sterling and euro;
- Instrument types and maturities, with ongoing issuance of transferable loan certificates, floating rate notes and fixed or floating rate transferable deposits, for example; and
- Geographical location, with regular issues in Australia, Europe, Asia and the United States.
This diverse approach has substantially broadened St.George’s investor base by fulfilling specific investor requirements.
Securitisation also provides additional diversification by opening up global asset-backed markets to St.George’s balance sheet.
Efficiency and Flexibility
To ensure maximum efficiency and flexibility in accessing funding opportunities, St.George has established a range of debt programmes. Documentation for these is updated regularly, as market conventions, legal and regulatory changes occur and as the latest St.George credit developments are reflected in our Offering Circulars.
Regular posting of indicative pricing for private placements under these programmes is communicated through our screens and dealer panels. St.George values opportunities to transact individually with investors and takes a flexible approach in evaluating various structures. This supplements our ongoing programme of public issuance, which fulfils the majority of St.George’s borrowing requirements.
St.George’s strategy for public issuance generally revolves around establishment of a yield curve of liquid, actively traded benchmarks. Selection of strong underwriting panels and market-driven transaction structures are directed towards this objective.
Investor Commitment
St.George places great value on the established strong relationships we have with our investors. Through the active marketing approach embodied in our funding strategy, consolidation of existing and the creation of new relationships has our ongoing focus. We are committed to keeping investors fully informed through continuous communication of St.George's credit developments. Regular investor roadshows and distribution of information are undertaken to this end.
We are also committed to optimising the performance of St.George's issues in global markets through a consistently responsible approach to new issues. By carefully structuring and pricing transactions to enable performance in the secondary market, St.George has earned the reputation as a "responsible issuer" over the years.
These approaches will continue to be instrumental in the execution of St.George’s global funding strategy.
Funding Responsibility
The Group Treasury & Capital Markets division is responsible for implementation of the wholesale funding strategy. Capital Markets manages the domestic and international medium term funding programmes, while Financial Markets manages short term funding.
