Don't mind the big banks ripping off customers as exposed in the Banking Royal Commission – it turns out ASX-listed financial institutions increased their charitable donations by the biggest amount last year.
That's one of the key findings in the second annual GivingLarge Report looking at how much ASX-listed companies donate to the community by Strive Philanthropy and reported in The Australian today in an article by Damon Kitney.
The biggest increases in donations in 2018 came from the likes of (hold your breath) Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd. (ASX: NAB) and QBE Insurance Group Ltd (ASX: QBE).
Bank stocks buying redemption?
The financial sector upped their donations by 28% compared to the 11% increase by the top 50 ASX companies, according to The Australian. CBA, ANZ Bank and NAB channelled the extra funds into education, health and medical research, and financial literacy and inclusion.
The three banks (particularly CBA and NAB) have been tarred by the Hayne Royal Commission which found a string of unethical and illegal activities including charging dead customers fees.
It feels almost like the banks were robbing Peter to pay Paul and keeping a chunk of change as commission! News that the banks are giving back more to the community won't win them many new friends, although their efforts are noteworthy – assuming it wasn't driven by the need to offset guilt.
Other big donors include Wesfarmers Ltd (ASX: WES) and Oil Search Limited (ASX: OSH) although it was the mining and materials sector that paid out the most to charities – $393 million to be exact, or 42% of the total.
Australian corporates not so big hearted after all
But just before you get googly-eyed about our benevolent large cap giants, it seems that Australian corporates are no Florence Nightingale!
The GivingLarge 2019 Report found that 10 ASX-listed companies contributed to 80% of the giving and that $945 million in donations from the top 50 ASX-listed entities only accounted for 0.62% of pre-tax profits, which is substantially below the global average of 1% (a level considered to be reasonable by the authors of the report).
If large cap ASX companies can match that, it will funnel an extra $600 million back into the community.
The sectors with lower contributions include utilities, industrial and information technology (IT). It shouldn't be lost on lost on investors that the IT sector has done particularly well over the past year or so, even though they won't rank tops from a cash-flow perspective.
