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Bank investors face $1b franking credit hit

John Kehoe and Jonathan Shapiro

Sep 20, 2024 – 6.02pm

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Hundreds of thousands of bank investors stand to lose about $1 billion in annual franking credits under the banking regulator’s plan to phase out hybrid securities.

The surprise proposal by the Australian Prudential Regulation Authority this month to wind down the $43 billion local bank hybrid market could force retail investors into riskier investments such as shares, bond fund managers say.

John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury.

Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney.