CRISIS? Not at Commonwealth Bank of Australia's headquarters.
While the rest of the banking world is in meltdown as sharemarkets head into free-fall, it's all high fives and air pumps at the CBA's Martin Place digs.
Just a day after pushing domestic interest rates 0.2 percentage points above the Reserve Bank's official cash rate, CBA's boss, Ralph Norris, has pulled off an extraordinary coup - the purchase of BankWest for just $2.1 billion from a desperate and distressed HBOS.
The irony was not lost on anyone. On Tuesday, the bank desperately needed a protective "cushion" by not passing on the full Reserve Bank rate cut because of exorbitant funding costs.
On Wednesday it lashes out a couple of billion to buy a competitor. But the acquisition's timing was so exquisite, the execution so swift and the price so cheap, even Norris had difficulty believing his good fortune. Normally chief executives are reticent to portray too much emotion. A po face usually minimises the chances of a red face at some stage down the track. On this one, however, Norris couldn't hide his glee.
"The Commonwealth Bank regularly reviews acquisition opportunities but rarely have we seen a quality asset such as BankWest become available on such attractive terms to us."
That wasn't an off-the-cuff remark, inadvertently caught on tape. That was his line in the press release. It only got better during the press conference. While most big corporate takeovers require a year of two before they turn a profit, Norris confided that the BankWest deal would be a money spinner from day one.
There is more to come.
CBA already has a 30 per cent stake in Aussie Home Loans and next course on the menu is Suncorp's banking operations.
Given that sort of cash is difficult to find, and Norris wants to maintain the integrity of the Commonwealth's balance sheet, he's opted for a $2 billion equity raising.
CBA's share price, like that of all financial institutions, has taken a hammering in the past nine months and at $40 a share (a discount to its $45.15 close), it's an expensive way to raise cash. But you can't have it both ways. What Norris loses on the weaker CBA share price, he more than makes up on the knockdown bargain basement BankWest price tag.
This is a golden period for the big four banks. Sorry, make that the giant two and the big two.
Not since the collapse of the state banks in the early 1990s has our banking landscape changed so dramatically and delivered so much market power to so few players.
The difference is that, instead of buying basket cases, CBA and Westpac are buying hugely profitable operations.
In the wake of the '87 sharemarket collapse and the '90s recession, the debt-riddled State Bank of Victoria and the State Bank in NSW ended up in CBA's hands.
The State Bank of South Australia went the full monty and actually collapsed, its head, Tim Marcus Clark, was defrocked, and the good assets ended up at St George via Advance Bank. Now, of course, they fall to Westpac.
But if Gail Kelly's assault on her old empire, St George, looked like a smart play, Norris certainly has stolen her thunder. St George, with its eastern states focus, works well for Westpac. But BankWest, with its base in resources-booming Western Australia, is a brilliant fit for the CBA.
And with paranoia in the minds of central bankers and governments worldwide, there will be no opposition to the BankWest purchase, or any other for that matter, on competition grounds.
The Prime Minister, his Treasurer and the Reserve Bank have just one thought in their minds - the integrity of the Australian banking system. They've cut the big 2+2 an enormous amount of slack on interest rates. They've even suspended concerns about competition.
Once things settle, and eventually they will, the Government will expect the banks to fall into line on interest rates. But the increased market power Westpac and CBA will have amassed will forever change the dynamic within Australian banking.
Both banks are reaping the benefits of prudent lending during the boom. At the end of the '80s boom, NAB emerged the winner for the same reason. The ANZ barely scraped through and this time has emerged in the weakest position again.
Even so, all our banks are performing strongly. As a group, they are at the top of the international earnings range. The primary reason is the unusually low level of bad debts. When you have an unassailable market position, you can afford to pick and choose your customers.
