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Western Australian Treasury Corporation 2012 Annual Report - Page 22Western Australian Treasury Corporation 2012 Annual Report - Page 23
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CLIENT SERVICES • CONSTRUCTION OF ADMINISTRATION FACILITIES AND LIBRARIES; • RECREATION, SPORTING AND AQUATIC FACILITIES; • UNDERGROUND POWER; • ROADWORKS; • COMMERCIAL AND RESIDENTIAL LAND DEVELOPMENT; AND • AGED CARE FACILITIES. 20 WESTERN AUSTRALIAN TREASURY CORPORATION STEPHEN MORHALL DIRECTOR CLIENT SERVICES WATC IS THE PRIMARY PROVIDER OF CORPORATE TREASURY SERVICES TO THE WESTERN AUSTRALIAN PUBLIC SECTOR AND PROVIDES A COMPREHENSIVE RANGE OF FINANCIAL PRODUCTS AND SERVICES INCLUDING DEBT FUNDING, INVESTMENTS, FOREIGN EXCHANGE, FINANCIAL RISK MANAGEMENT AND ADVISORY SERVICES TO ASSIST WATC'S CLIENTS TO ACHIEVE THEIR FINANCIAL OBJECTIVES. WATC IS COMMITTED TO STRENGTHENING CLIENT RELATIONSHIPS TO ENSURE THAT ITS PRODUCT AND SERVICE OFFERINGS ARE ALIGNED TO CLIENT NEEDS, BOTH NOW AND IN THE FUTURE. AS EVIDENCE OF THIS COMMITMENT IN 2011/12, WATC: • CONTINUED TO INVEST IN CLIENT RELATIONSHIP MANAGEMENT TRAINING TO ENHANCE SKILLS AND FURTHER SUPPORT AND EXTEND PARTNERSHIP OPPORTUNITIES WITH CLIENTS. • COORDINATED A WEIGHTED AVERAGE COST OF CAPITAL (WACC) FORUM PRESENTED BY A LEADING EXPERT TO OVER 100 PEOPLE IN RESPONSE TO A GROWING DEMAND FOR IMPROVED KNOWLEDGE AND SKILLS DEVELOPMENT IN THIS SPECIALISED FIELD. • CREATED THE FINANCIAL AND COMMERCIAL ADVISORY SERVICES BUSINESS UNIT WITHIN THE CLIENT SERVICES DIVISION TO INCREASE EFFICIENCIES AND RESOURCES DEVOTED TO THIS IMPORTANT SERVICE, PROVIDED BY A TEAM OF HIGHLY SKILLED PROFESSIONALS. • COMMENCED THE IMPLEMENTATION OF A NEW CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM TO FURTHER IMPROVE EFFICIENCIES, RESPONSIVENESS AND QUALITY OF SERVICE TO CLIENTS. LENDING AND INVESTMENT SERVICES STATE GOVERNMENT IN THE YEAR TO 30 JUNE 2012, BORROWINGS BY STATE GOVERNMENT AUTHORITIES INCREASED BY $3.83 BILLION TO $27.06 BILLION – THE THIRD LARGEST ANNUAL BORROWING PROGRAM DELIVERED SINCE WATC WAS ESTABLISHED IN 1986. OVER 85 PER CENT OF THE NET INCREASE IN BORROWINGS WAS ON BEHALF OF THE DEPARTMENT OF TREASURY FOR THE PURPOSE OF CAPITAL EXPENDITURE WITHIN THE GENERAL GOVERNMENT SECTOR – SUPPORTING THE DEVELOPMENT OF INFRASTRUCTURE WITHIN PUBLIC HEALTH, EDUCATION, LAW AND ORDER, RECREATION AND OTHER IMPORTANT PUBLIC SERVICES. OTHER SIGNIFICANT INCREASES IN BORROWINGS WERE REALISED BY WESTERN POWER ($468 MILLION) AND WATER CORPORATION ($481 MILLION) – DIRECTED AT DEVELOPING NEW, AND IMPROVING EXISTING, INFRASTRUCTURE FOR THESE IMPORTANT UTILITY SERVICES PROVIDED TO THE PEOPLE OF WESTERN AUSTRALIA. HOUSING, PUBLIC TRANSPORT, PORT AUTHORITIES, ELECTRICITY GENERATION AND UNIVERSITIES CONTINUED TO BE IMPORTANT GOVERNMENT SERVICES PROVIDED BY STATUTORY AUTHORITIES AND GOVERNMENT TRADING ENTERPRISES THAT ARE DEBT FUNDED BY WATC. THE DISTRIBUTION OF WATC LENDING ACROSS THE RESPECTIVE SECTORS REPRESENTING ITS CLIENT BASE IS SHOWN IN FIGURE 8 ON PAGE 21. THE CHANGE FROM 30 JUNE 2011 REFLECTS THE CONTINUED INCREASING PROPORTION OF DEBT OUTSTANDING AFFORDED TO THE GENERAL GOVERNMENT SECTOR, PRINCIPALLY THROUGH BORROWINGS BY THE DEPARTMENT OF TREASURY. LOCAL GOVERNMENT WATC CONTINUED TO BE THE FINANCIER OF CHOICE TO THE STATE'S LOCAL GOVERNMENT AUTHORITIES. WATC HAS SEEN A CONSISTENT INCREASE IN THE LEVEL OF DEBT PROVIDED TO LOCAL GOVERNMENT AUTHORITIES TO FINANCE A RANGE OF CAPITAL AND COMMUNITY PROJECTS ACROSS THE STATE INCLUDING: THE BELL TOWER, PERTH ESPLANADE
FIGURE 8: LENDING BY BROAD SECTOR – EVOLUTION OF DEBT OUTSTANDING – 2009/10 TO 2011/12 FIGURE 9: DEBT OUTSTANDING BY PRODUCT TYPE AT 30 JUNE 2012 LONG-TERM FIXED RATE DEBT TERM FLOATING RATE LOANS SHORT-TERM DEBT CAPITAL INDEXED LENDING INVESTMENT PRODUCTS DURING 2011/12, WATC'S CLIENTS CONTINUED TO TAKE ADVANTAGE OF ITS STATE GOVERNMENT GUARANTEED, AAA-RATED AT CALL AND FIXED TERM INVESTMENT PRODUCTS. AT 30 JUNE 2012, WATC MANAGED $147.5 MILLION OF CLIENT INVESTMENT FUNDS, REPRESENTING AN INCREASE OF 17.2 PER CENT ON THE EQUIVALENT BALANCE AT 30 JUNE 2011. FOREIGN EXCHANGE AND LIQUIDITY THE FOREIGN EXCHANGE (FX) AND LIQUIDITY BUSINESS UNIT STRIVES TO PROMOTE SOUND FINANCIAL RISK MANAGEMENT PRACTICES THROUGHOUT THE WESTERN AUSTRALIAN PUBLIC SECTOR BY RAISING AWARENESS OF THE RISKS ASSOCIATED WITH FOREIGN EXCHANGE EXPOSURE AND PROVIDING ACCESS TO COST-EFFECTIVE FOREIGN EXCHANGE ADVISORY AND TRANSACTIONAL SERVICES. FX AND LIQUIDITY HAS ASSISTED CLIENTS TO IDENTIFY AND MANAGE EXPOSURES THAT HAVE ARISEN IN ANYTHING FROM DAY-TO-DAY OPERATIONAL TRANSACTIONS THROUGH TO LARGE-SCALE ASSET PROCUREMENT PROJECTS. THESE PROJECTS INCLUDED: • ART GALLERY OF WESTERN AUSTRALIA'S EXHIBITIONS: – PICASSO TO WARHOL: FOURTEEN MODERN MASTERS; – PRINCELY TREASURES: EUROPEAN MASTERPIECES 1600– 1800 FROM THE VICTORIA AND ALBERT MUSEUM; • PERTH THEATRE TRUST'S ENGAGEMENT OF THE VIENNA PHILHARMONIC ORCHESTRA TO PERFORM IN PERTH IN SEPTEMBER 2011; ($ BILLION) 9 8 7 6 5 4 3 2 1 0 30 JUNE 2010 30 JUNE 2011 30 JUNE 2012 5% 12% 52% 31% IN THE YEAR TO 30 JUNE 2012, NET LENDING TO LOCAL GOVERNMENT AUTHORITIES AMOUNTED TO $66.6 MILLION, TAKING THE TOTAL AMOUNT OF DEBT PROVIDED TO LOCAL GOVERNMENT AUTHORITIES TO MORE THAN $642 MILLION. LOAN PRODUCTS WATC OFFERS ITS CLIENTS AN EXTENSIVE RANGE OF LOAN PRODUCTS INCLUDING: • PORTFOLIO LENDING ARRANGEMENTS (PLA); • SHORT-TERM LOANS; • COMPOUND CASH RATE LENDING; • TERM FLOATING RATE LOANS; • TERM FIXED RATE LENDING, INCLUDING; – INTEREST ONLY LOANS; – AMORTISING LOANS; – ZERO-COUPON LOANS; – STRUCTURED LOANS DESIGNED TO MEET INDIVIDUAL CLIENT NEEDS; AND • CAPITAL INDEXED LENDING. WATC'S LOAN PRODUCTS PROVIDE CLIENTS WITH ACCESS TO COST-EFFECTIVE FUNDING WITH THE FLEXIBILITY TO STRUCTURE LOANS TO SATISFY SPECIFIC FINANCING NEEDS FOR TERMS FROM ONE DAY TO MORE THAN 20 YEARS. FIGURE 9 SHOWS THE MIX OF WATC'S LOAN PRODUCTS AT 30 JUNE 2012 BY BROAD PRODUCT TYPE. ANNUAL REPORT 2012 21 GENERAL GOVT ELECTRICITY WATER HOUSING PORTS TRANSPORT UNIVERSITIES OTHER
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