Crunch keeps hitting ANZ
(29 July 2008 – Australia) ANZ has released an announcement detailing that while underlying profit is strong, credit related issues continue to cause more provisions.
ANZ said that to the continuing deterioration in global credit markets, a weak New Zealand economy and softening Australian economy would continue to give rise to further provisions and valuation adjustments in the second half of 2008.
ANZ said their underlying business is performing well, particularly Personal and Asia Pacific. Profit before provisions is expected to be up by around 8 percent compared to 2007 and cash profit to be over $3 billion.
Provisions for bad debts for ANZ in the second half of the year are likely to be around $1.2 billion, compared with $980 million for the first half of 2008.
The Collective Provision will be reset to above one percent of credit risk weighted assets as a response to the sustained deterioration in the global credit environment.
As a result, the Collective Provision charge is expected to be around $375 million in second half ($376 million in the first half 2008).
Known credit issues have caused the bulk of the increase in provisions, with deteriorations including certain commercial property clients, securities lending and Bill Express.
As a result Group Individual Provisions are expected to be around $850 million in the second half ($604 million in the first half).
The full-year dividend is expected to be maintained at 136 cents per share fully franked.
ANZ said their underlying business is performing well, particularly Personal and Asia Pacific. Profit before provisions is expected to be up by around 8 percent compared to 2007 and cash profit to be over $3 billion.
Provisions for bad debts for ANZ in the second half of the year are likely to be around $1.2 billion, compared with $980 million for the first half of 2008.
The Collective Provision will be reset to above one percent of credit risk weighted assets as a response to the sustained deterioration in the global credit environment.
As a result, the Collective Provision charge is expected to be around $375 million in second half ($376 million in the first half 2008).
Known credit issues have caused the bulk of the increase in provisions, with deteriorations including certain commercial property clients, securities lending and Bill Express.
As a result Group Individual Provisions are expected to be around $850 million in the second half ($604 million in the first half).
The full-year dividend is expected to be maintained at 136 cents per share fully franked.
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