May 6, 2025 • 6 mins
Westpac has seen a dip in its first half profits but its new CEO is ramping up... instead of squeezing costs.
Shell is considering a whopping takeover of its rival BP and this could become one of the biggest oil mergers ever.
Netflix made $1.3 billion in Australia last year and no surprises here - they sent 93% of it overseas.
_
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
This is what the Flux.
Speaker 2 (00:06):
I'm Brett and I'm Justin and it's Wednesday, the seventh
of May. Boy.
Speaker 1 (00:10):
Berkshire Hathaway's and Your Shareholder Meeting is the business equivalent
of Coachella, and this year Berkshire's CEO, Warren Buffett, ran
his typical five hour Q and A session with shareholders
and then at the very end, he announced he would
be retiring as CEO. And while his successor has been
known for years, not even the successor knew it was
coming up during this meeting. Talk about a surprise party.
Speaker 2 (00:31):
As we get to the end of this financial year,
this is the time where you want to get your spending,
your saving all in order for a big twenty twenty
six financial year. There is one place to get visibility
of all your spending. It's in the Flux Budging tool.
Connect your accounts and automate all your spending and savings.
You can see where your money's going. Download the Flux
app to check it out.
Speaker 1 (00:49):
Three revolutionary stories today Juzzy Boy, Let's do it for
our first. Westpac has seen a dip in its first
half profits, but its new CEO is ramping up instead
of squeezing costs.
Speaker 2 (01:00):
Freewheeling new ceo vibes here b mantel were Yeah.
Speaker 1 (01:03):
So Westpac is Australia's third largest bank with twelve point
seven million customers across its brands.
Speaker 2 (01:08):
We'd be talking Westpac, Saint George Bank, SA and RAMS.
Speaker 1 (01:11):
Now does it boy? Westpac's former CEO step down in
December last year after nearly five years.
Speaker 2 (01:17):
And now Westpax new CEO delivered his first half year profit,
which dipped by one percent to three point three billion dollars.
Speaker 1 (01:23):
Just three point three billion backs.
Speaker 2 (01:25):
Yeah and be man. Despite falling short on profit and
their dividend forecasts, not everything was disappointing for the big rad.
Speaker 1 (01:32):
Now Westpac grew its business loans by fourteen percent, and
it also grew its mortgages by five percent.
Speaker 2 (01:37):
And now west Pax new CEO wants to double down
on these areas.
Speaker 1 (01:40):
Yep, he's pulling out the company credit card and planning
to hire four hundred and fifty new bankers to drive
more growth and also to cross sell more products.
Speaker 2 (01:48):
Mortgage today, business loan tomorrow. Maybe throw in a credit
card there for good measure.
Speaker 1 (01:52):
But even with those green troots of positivity, he warned
that there is some serious uncertainty in geopolitics.
Speaker 2 (01:59):
And this could hit west future funding costs.
Speaker 1 (02:01):
Next minute, Westpac share price fell three percent.
Speaker 2 (02:04):
So what is the key learning here?
Speaker 1 (02:05):
Funding costs are the costs that banks pay to borrow money.
Speaker 2 (02:09):
Yep, that's right. Banks borrow money from other sources in
order to lend it to you and I.
Speaker 1 (02:14):
For Westpac, about sixty to sixty five percent of their
funding comes from customer deposits.
Speaker 2 (02:18):
Thing customer savings accounts and term deposits.
Speaker 1 (02:21):
But the remainder of their funding comes from wholesale markets.
Speaker 2 (02:24):
They borrow money from investors here in Australia as well
as overseas and.
Speaker 1 (02:28):
Jus boy, that part gets tricky when the political climate
turns a little gray.
Speaker 2 (02:32):
Yeah. When the global mood swings with tariff wors and
economic uncertainty, investors demand high interest rates to lend their cash.
Speaker 1 (02:40):
Which drives up Westpack's funding costs.
Speaker 2 (02:42):
And if it costs more for them to fund loans,
the bank's margin shrinks.
Speaker 1 (02:46):
And given Australian banks live and die by their net
interest margin, even a small rise in funding costs can
seriously hurt their profits. For our second story, Shell is
considering a whopping takeover of its rival BP, and this
could become one of the biggest oil mergers of all tag.
Speaker 2 (03:01):
The oil soap opera might just end in a merger
b Man, So tell me what's going on?
Speaker 1 (03:05):
Well, BP, previously known as British Petroleum, is one of
the UK's largest oil and gas.
Speaker 2 (03:10):
Companies, been pumping oil and gas since nineteen oh nine
and it operates in over seventy countries around the world. Now.
Speaker 1 (03:16):
Shell was started at a similar time back in nineteen
oh seven and is also one of the largest oil
and gas companies.
Speaker 2 (03:21):
And the Man. These two have been the og oil rivals,
the cocin PEPSI of the petrol industry.
Speaker 1 (03:26):
But while they were once bit of rivals juzzy Boy,
they've kind of gone down different paths over the last
few years.
Speaker 2 (03:32):
Shell dull down on its climate targets.
Speaker 1 (03:34):
Well BP, he's been trying to reinvent itself as Captain Planet.
He captained net zero as it pivoted hard into renewable.
Speaker 2 (03:41):
And the Man. BP's pivot has come with a hefty
price tag because it shares have fallen thirty percent in
the past year.
Speaker 1 (03:47):
So now Shell is reportedly chatting with advisers about whether
to make a bid for the BP entire company, and with.
Speaker 2 (03:53):
BP's current market value more than fifty seven billion pounds,
this would be an enormous takeover.
Speaker 1 (03:59):
But never say never, because activist investors are pushing for
big changes at BPHQ.
Speaker 2 (04:04):
So what is the key learning here?
Speaker 1 (04:06):
Activist investors are shareholders who use their equity stake in
a company to pressure management for change.
Speaker 2 (04:12):
The man Elliott Investment Management, who's the owner of a
five percent stake in BP now, is one of the
most well known activist firms. YEP.
Speaker 1 (04:19):
They have a standard playbook that they've used across a
number of major companies like Twitter, Perno, Ricard, Samsung.
Speaker 2 (04:25):
Step one, buy a stake in the company.
Speaker 1 (04:27):
Then step two is tell the whole world about their
demands for a change.
Speaker 2 (04:30):
Step three push for moves they think will increase shareholder value.
Speaker 1 (04:34):
By a major strategic shift or maybe a big asset
sale or yes, even a merger. Either way, when activists
like Elliott show up, things always get interesting real quick.
Speaker 2 (04:44):
For our third and final story, Netflix made one point
three billion dollars in Australia last year and no surprises here,
they sent ninety three percent of it overseas.
Speaker 1 (04:53):
Not a surprise after we spoke about Facebook with the
Shifty Shifty, So tell me more.
Speaker 2 (04:58):
Netflix was founded back in nineteen ninety seven a It's
a humble DVD rental service.
Speaker 1 (05:01):
And was laughed out the door by Blockbuster when Netflix
offered to sell its company two Blockbuster for fifty million dollars.
Speaker 2 (05:09):
Now Netflix is the world's biggest streaming service and no
longer exists.
Speaker 1 (05:13):
Who is laughing now?
Speaker 2 (05:15):
In fact, be man. Netflix is so dominant it claims
that seventy seven percent of Ozzie households have a subscription
and now be man Netflix. Australia's local revenue for twenty
twenty four has been revealed and it generated one point
three billion bakarunis.
Speaker 1 (05:27):
A nice little bump up from one point one bill
in twenty twenty three.
Speaker 2 (05:32):
Bush It posted a teeny tiny profit of just twenty
three million dollars in Australia.
Speaker 1 (05:36):
That's because it paid one point two billion dollars in
distribution fees to other Netflix entities overseas.
Speaker 2 (05:42):
In other words, ninety three percent of revenue was shifted offshore.
Speaker 1 (05:45):
But there might be some revenge served soon via Canberra YEP.
Speaker 2 (05:50):
The federal government has floated plans to introduce content quotas
the streamers like Netflix.
Speaker 1 (05:54):
To an interesting call, Jazzy boy. So I'm wondering over here,
what is the key learning?
Speaker 2 (05:57):
Content quotas are regulations requiring media companies to produce or
show a minimum amount of local content.
Speaker 1 (06:04):
Now right now, there are content quotas on traditional broadcasters
like Channel nine and seven and ten, but not the
streaming services.
Speaker 2 (06:11):
And the Australian government wants streaming giants to invest more
in local productions.
Speaker 1 (06:15):
All right, so how would this one work?
Speaker 2 (06:16):
There are two models that have been explored. The first
is a subscriber based model.
Speaker 1 (06:20):
That's where companies with more Oussie subscribers must spend more.
The other is a revenue based model that's where a
percentage of local income is invested into Australian content. And
b man Well, Netflix says it's already spent one billion
bucks on Ossie content since twenty nineteen. The local production
industry claims that ain't enough.
Speaker 2 (06:37):
Bluck dame. If you get to the end of every
single month in one doubt, where did my money go
this month? There is only one way to find out.
It is straight in the flux app or It takes
thirty seconds to connect your accounts and see all you're
spending each and every month. If you want to learn
more about where your money's going, make sure to download
the Flux app and check out the budgeting tool.
Speaker 1 (06:53):
Thanks for listening, and we'll send you on Friday
This is what the Flux.
Speaker 2 (00:06):
I'm Brett and I'm Justin and it's Wednesday, the seventh
of May. Boy.
Speaker 1 (00:10):
Berkshire Hathaway's and Your Shareholder Meeting is the business equivalent
of Coachella, and this year Berkshire's CEO, Warren Buffett, ran
his typical five hour Q and A session with shareholders
and then at the very end, he announced he would
be retiring as CEO. And while his successor has been
known for years, not even the successor knew it was
coming up during this meeting. Talk about a surprise party.
Speaker 2 (00:31):
As we get to the end of this financial year,
this is the time where you want to get your spending,
your saving all in order for a big twenty twenty
six financial year. There is one place to get visibility
of all your spending. It's in the Flux Budging tool.
Connect your accounts and automate all your spending and savings.
You can see where your money's going. Download the Flux
app to check it out.
Speaker 1 (00:49):
Three revolutionary stories today Juzzy Boy, Let's do it for
our first. Westpac has seen a dip in its first
half profits, but its new CEO is ramping up instead
of squeezing costs.
Speaker 2 (01:00):
Freewheeling new ceo vibes here b mantel were Yeah.
Speaker 1 (01:03):
So Westpac is Australia's third largest bank with twelve point
seven million customers across its brands.
Speaker 2 (01:08):
We'd be talking Westpac, Saint George Bank, SA and RAMS.
Speaker 1 (01:11):
Now does it boy? Westpac's former CEO step down in
December last year after nearly five years.
Speaker 2 (01:17):
And now Westpax new CEO delivered his first half year profit,
which dipped by one percent to three point three billion dollars.
Speaker 1 (01:23):
Just three point three billion backs.
Speaker 2 (01:25):
Yeah and be man. Despite falling short on profit and
their dividend forecasts, not everything was disappointing for the big rad.
Speaker 1 (01:32):
Now Westpac grew its business loans by fourteen percent, and
it also grew its mortgages by five percent.
Speaker 2 (01:37):
And now west Pax new CEO wants to double down
on these areas.
Speaker 1 (01:40):
Yep, he's pulling out the company credit card and planning
to hire four hundred and fifty new bankers to drive
more growth and also to cross sell more products.
Speaker 2 (01:48):
Mortgage today, business loan tomorrow. Maybe throw in a credit
card there for good measure.
Speaker 1 (01:52):
But even with those green troots of positivity, he warned
that there is some serious uncertainty in geopolitics.
Speaker 2 (01:59):
And this could hit west future funding costs.
Speaker 1 (02:01):
Next minute, Westpac share price fell three percent.
Speaker 2 (02:04):
So what is the key learning here?
Speaker 1 (02:05):
Funding costs are the costs that banks pay to borrow money.
Speaker 2 (02:09):
Yep, that's right. Banks borrow money from other sources in
order to lend it to you and I.
Speaker 1 (02:14):
For Westpac, about sixty to sixty five percent of their
funding comes from customer deposits.
Speaker 2 (02:18):
Thing customer savings accounts and term deposits.
Speaker 1 (02:21):
But the remainder of their funding comes from wholesale markets.
Speaker 2 (02:24):
They borrow money from investors here in Australia as well
as overseas and.
Speaker 1 (02:28):
Jus boy, that part gets tricky when the political climate
turns a little gray.
Speaker 2 (02:32):
Yeah. When the global mood swings with tariff wors and
economic uncertainty, investors demand high interest rates to lend their cash.
Speaker 1 (02:40):
Which drives up Westpack's funding costs.
Speaker 2 (02:42):
And if it costs more for them to fund loans,
the bank's margin shrinks.
Speaker 1 (02:46):
And given Australian banks live and die by their net
interest margin, even a small rise in funding costs can
seriously hurt their profits. For our second story, Shell is
considering a whopping takeover of its rival BP, and this
could become one of the biggest oil mergers of all tag.
Speaker 2 (03:01):
The oil soap opera might just end in a merger
b Man, So tell me what's going on?
Speaker 1 (03:05):
Well, BP, previously known as British Petroleum, is one of
the UK's largest oil and gas.
Speaker 2 (03:10):
Companies, been pumping oil and gas since nineteen oh nine
and it operates in over seventy countries around the world. Now.
Speaker 1 (03:16):
Shell was started at a similar time back in nineteen
oh seven and is also one of the largest oil
and gas companies.
Speaker 2 (03:21):
And the Man. These two have been the og oil rivals,
the cocin PEPSI of the petrol industry.
Speaker 1 (03:26):
But while they were once bit of rivals juzzy Boy,
they've kind of gone down different paths over the last
few years.
Speaker 2 (03:32):
Shell dull down on its climate targets.
Speaker 1 (03:34):
Well BP, he's been trying to reinvent itself as Captain Planet.
He captained net zero as it pivoted hard into renewable.
Speaker 2 (03:41):
And the Man. BP's pivot has come with a hefty
price tag because it shares have fallen thirty percent in
the past year.
Speaker 1 (03:47):
So now Shell is reportedly chatting with advisers about whether
to make a bid for the BP entire company, and with.
Speaker 2 (03:53):
BP's current market value more than fifty seven billion pounds,
this would be an enormous takeover.
Speaker 1 (03:59):
But never say never, because activist investors are pushing for
big changes at BPHQ.
Speaker 2 (04:04):
So what is the key learning here?
Speaker 1 (04:06):
Activist investors are shareholders who use their equity stake in
a company to pressure management for change.
Speaker 2 (04:12):
The man Elliott Investment Management, who's the owner of a
five percent stake in BP now, is one of the
most well known activist firms. YEP.
Speaker 1 (04:19):
They have a standard playbook that they've used across a
number of major companies like Twitter, Perno, Ricard, Samsung.
Speaker 2 (04:25):
Step one, buy a stake in the company.
Speaker 1 (04:27):
Then step two is tell the whole world about their
demands for a change.
Speaker 2 (04:30):
Step three push for moves they think will increase shareholder value.
Speaker 1 (04:34):
By a major strategic shift or maybe a big asset
sale or yes, even a merger. Either way, when activists
like Elliott show up, things always get interesting real quick.
Speaker 2 (04:44):
For our third and final story, Netflix made one point
three billion dollars in Australia last year and no surprises here,
they sent ninety three percent of it overseas.
Speaker 1 (04:53):
Not a surprise after we spoke about Facebook with the
Shifty Shifty, So tell me more.
Speaker 2 (04:58):
Netflix was founded back in nineteen ninety seven a It's
a humble DVD rental service.
Speaker 1 (05:01):
And was laughed out the door by Blockbuster when Netflix
offered to sell its company two Blockbuster for fifty million dollars.
Speaker 2 (05:09):
Now Netflix is the world's biggest streaming service and no
longer exists.
Speaker 1 (05:13):
Who is laughing now?
Speaker 2 (05:15):
In fact, be man. Netflix is so dominant it claims
that seventy seven percent of Ozzie households have a subscription
and now be man Netflix. Australia's local revenue for twenty
twenty four has been revealed and it generated one point
three billion bakarunis.
Speaker 1 (05:27):
A nice little bump up from one point one bill
in twenty twenty three.
Speaker 2 (05:32):
Bush It posted a teeny tiny profit of just twenty
three million dollars in Australia.
Speaker 1 (05:36):
That's because it paid one point two billion dollars in
distribution fees to other Netflix entities overseas.
Speaker 2 (05:42):
In other words, ninety three percent of revenue was shifted offshore.
Speaker 1 (05:45):
But there might be some revenge served soon via Canberra YEP.
Speaker 2 (05:50):
The federal government has floated plans to introduce content quotas
the streamers like Netflix.
Speaker 1 (05:54):
To an interesting call, Jazzy boy. So I'm wondering over here,
what is the key learning?
Speaker 2 (05:57):
Content quotas are regulations requiring media companies to produce or
show a minimum amount of local content.
Speaker 1 (06:04):
Now right now, there are content quotas on traditional broadcasters
like Channel nine and seven and ten, but not the
streaming services.
Speaker 2 (06:11):
And the Australian government wants streaming giants to invest more
in local productions.
Speaker 1 (06:15):
All right, so how would this one work?
Speaker 2 (06:16):
There are two models that have been explored. The first
is a subscriber based model.
Speaker 1 (06:20):
That's where companies with more Oussie subscribers must spend more.
The other is a revenue based model that's where a
percentage of local income is invested into Australian content. And
b man Well, Netflix says it's already spent one billion
bucks on Ossie content since twenty nineteen. The local production
industry claims that ain't enough.
Speaker 2 (06:37):
Bluck dame. If you get to the end of every
single month in one doubt, where did my money go
this month? There is only one way to find out.
It is straight in the flux app or It takes
thirty seconds to connect your accounts and see all you're
spending each and every month. If you want to learn
more about where your money's going, make sure to download
the Flux app and check out the budgeting tool.
Speaker 1 (06:53):
Thanks for listening, and we'll send you on Friday
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