A new world for investor relations

Before COVID-19 hit, the big-four banks were among the most visible Australian bond issuers on the world stage, with frequent deals and in-person investor updates in every major jurisdiction. Not only has their issuance need all but disappeared but the nature of the crisis has forced them to re-imagine how investor relations works.

DAVISON What have the banks been doing on the investor-relations side during the COVID-19 period, when they have not been issuing and cannot maintain their usual extensive calendar of global updates? Is it harder to get air time with global investors in particular under these circumstances?

KAU The calls we have had with investors following our results have been well-received. Investors have appreciated that we have stayed in touch in what are certainly very trying circumstances. It is not the same as face-to-face meetings but, generally speaking, investors are very appreciative. We have not been involved in any deals, of course, so I cannot comment there.

MITCHELL I concur. We received a similar positive reception as we tried to get across as many accounts as we could in group and one-on-one settings. There has been a lot of conjecture on whether this approach will replace face-to-face nondeal roadshows or general investor engagement in the future. My view is that virtual updates will be a complement to in-person engagement, but will not replace it.

It is challenging for us to do our day jobs in between taking calls from 5am to late in the evening and working at all hours, given the time zones our investor base covers. It is clearly less glamorous working from home in our closets or laundries, or wherever our home-office set up may be, during periods of lockdown.

Investors will continue to see engagement on an in-person level because I think typically this is where conversation is far more flowing and candid. At the same time, VC tools may complement this type of engagement from time to time. When there is something topical or a particular area of focus investors want to get in front of us, they can do so at the touch of a button.

The US seems to have become used to doing VC, particularly in execution mode, and I think COVID-19 has accelerated this. I expect there will be physical roadshows again – as they tend to achieve good engagement – but they are likely to be less frequent in the future.

FERGUS BLACKSTOCK COMMONWEALTH BANK OF AUSTRALIA

DAVISON National Australia Bank (NAB) is in the market with a tier-two deal right now. Based on this experience have things changed around deal execution, too?

MITCHELL Being in lockdown again in Melbourne, I am obviously working from home rather than the office. It is quite remarkable to be able to run a transaction like this remotely but it has become business as usual now.

Six months ago, I would have scoffed at the infrastructure and personal ability required to interact and communicate remotely as opposed to being in the office. I might not have said it was impossible, but the idea of execution from osmosis and dividing tasks virtually would not have appealed to me back then. But it has worked well and it is part of our operating rhythm now.

DAVISON Have jurisdictions varied when it comes to the uptake of VC?

BLACKSTOCK Across the globe, people have become comfortable with working remotely – it has become the new business as usual. Following our annual results announcement in mid-August, we started engaging with investors and we have not experienced any resistance to having these meetings virtually.

While the exercise is not yet complete, the uptake has been very good. I agree that, when the time is right, there will still be a role to play for face-to-face meetings as well as VC discussions for the sake of efficiency.

DAVISON Is the base case that, when and if conditions return to something closer to normal, the value of in-person meetings will snap back fast? Or, as with what we are seeing with the funding gap, will there be a structural shift including less flying and more VC on an ongoing basis?

BLACKSTOCK I think the trend has already started. The US seems to have become used to doing VC, particularly in execution mode, and I think COVID-19 has accelerated this. I expect there will be physical roadshows again – as they tend to achieve good engagement – but they are likely to be less frequent in the future.