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ANZ warns of higher funding costs

ANZ warns of higher funding costs

(24 May 2011 – Australia) ANZ chief executive officer Mike Smith has warned that the bank may face higher funding costs as sovereign debt roils markets. "Europe frankly shows no sign of actually sorting out its problems," Smith said in an interview with Bloomberg television on May 20 in Shanghai where he attended a financial forum. That will "mean raising funds will just be a bit more expensive. That is the reality."

The bank’s shares were down as much as 38.5 cents, or 1.7 percent, to A$22.405, with the overall market down about 1 percent.

Last week Moody’s Investors Service cut the big four banks credit ratings down and Mr Smith said the cut in his bank's rating had been "well anticipated" and still left it with one of the highest ratings in the world.

"They've adjusted all the Australian banks so it's the system that they're looking at," Mr Smith said.

"The irony is, I guess, that we've never had stronger balance sheets in our history."
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