ANZ - ANZ Banking Group

[Miner]

I don't believe billions, the shares were only around a few hundred million. Most are much lower now anyway even if they did have to buy them back. The judgements have been in the bank's favour so far. When you think about it the clients signed off market transfers, i.e. they transferred ownership of their shares to Opes. From that point on they no longer owned them. Opes had made a promise to pay them back one day on request, nothing more than that. So clients were conned by Opes, not the banks. Opes clients had no agreement with the banks.

Hypothetically the cost to settle the whole issue by ANZ say $500 M.

Assume we are setting the scene in Congo, India or Indonesia and how could a company like ANZ can resolve such issues

• Charity Fund organised by the relevant prosecution authority's nearest family member : Donation $200,000
• Joe Dick Charity organisation for beraved soldiers - another $100 K
• Political Leader's Fund Generation $2 M (to group of few)
• Charity Show sponsorship $1 M
• Children Scholarship to relevant community organisations $200K
• Welfare and

philonthropical and public sentiment advertisement in leading media $2 M
Miscellaneous Funding Donation $1 M

Background legal discussions $20 M to keep Plan B ready

Total expenditure is : $26.5 M about 5% of the total potential cost) has the potential to get the $500 M over

(Just tongue and cheek how could such big cost of litigation possibly can be resolved by companies like ANZ )

But the problem in reality is we are in Australia and ANZ is an Australian company. So they have to keep allowance for bad expenditure to pay out OPES affected parties.

disclaimer : I do hold ANZ

 

[Vlad]

Dirty Harry,

There have been NO judgments in ANZ's favor. What Finkelstein said was a properly made AMSLA was valid. He did not say the AMSLA between OPES/ANZ and its clients was valid. That is to be tested in court. And ANZ's case is not strong. Brochure after brochure tells clients they retain beneficial ownership!!!

In fact recent judgments in related cases have made ANZ's case very shaky. In any case ANZ's actions before OPES fall and immediately after are in serious doubt. ANZ may have kept an insolvent entity trading until it strengthened its position. Naughty naughty.

Yes I agree, if you want to buy 10000 shares of SLA tomorrow at 14 cents, no problem. But if you want to buy 40M, I suggest people will be holding out for and getting up to $4. Repeat that on almost 30% of the Australian stock market and ANZ is cash strapped.

I am looking at buying into ANZ but I think it will go a lot lower yet. Then I will buy big!!!

 

[dirty_harry]

Vlad, hang on a minute lets work out who is responsible for what.

- the brochures were published by Opes not by the banks.
- determining whether a company is solvent or should cease trading is the responsibility of the directors, ie Opes directors. Whether a bank calls in it's loans or not is a seperate process and is the banks decision based on risk management, etc.
- the banks were Opes financers. ie they loaned money to Opes against collateral owned by Opes but had no agreement with Opes clients. Therefore clients have no recourse against the banks, but against Opes. That's my understanding at least.

 

[Vlad]

Nonetheless ANZ have put an offer on the table!! They did not do that because they are a benevolent agency!!

 

[Julia]

ANZ is the first of the big banks to say they will be cutting the dividend.
So far no details of how much.

 

[dhukka]

ANZ is the first of the big banks to say they will be cutting the dividend.
So far no details of how much.

Julia, this is from the announcement:

ANZ’s proforma tier one capital ratio at the end of January 2009 was 8.4%.** Organic capital generation will be further strengthened through the adoption of a more appropriate dividend policy for the current conditions with the dividend for 2009 expected to be reduced by around 25% and to be fully franked.

 

[vincent191]

I expect the other banks to follow. My reasons are, the big 4 are all trading in the same market, selling the same products (more or less) and experiencing the same turmoil, why should they be any different? Maybe the only difference is the % cut.

On a different subject have you all notice that the CBA is now a substainal shareholder in Suncorp??? Maybe ANZ had walked away from SUN for good??

 

[rustyheela]

divvy cut of 25% = yield of 8%. better than bucks under matress or wot their interest rates are!!! would think most of downside risk priced in?

 

[Julia]

Julia, this is from the announcement:

ANZ’s proforma tier one capital ratio at the end of January 2009 was 8.4%.** Organic capital generation will be further strengthened through the adoption of a more appropriate dividend policy for the current conditions with the dividend for 2009 expected to be reduced by around 25% and to be fully franked.

Thanks Dhukka.

divvy cut of 25% = yield of 8%. better than bucks under matress or wot their interest rates are!!! would think most of downside risk priced in?

Rustyheela 402961: why do you think most of the downside risk is already priced in?

 

[grace]

divvy cut of 25% = yield of 8%. better than bucks under matress or wot their interest rates are!!! would think most of downside risk priced in?

ANZ have the largest exposure of all Australian Banks to NZ. 25% of net profit derived in NZ. Major property collapse + economy collapse in NZ is not going to be pretty for ANZ!

Then we have lots of bad debts to come in Australia. Will be very difficult for our banks here, but of course, nothing like the US.

I guess you have to work out if all of this is factored into the share price already.

Disclosure: was once a holder of ANZ shares, but I sold out of all my Bank stocks at least a year ago.

 

[tigerboi]

Re: ANZEADSET THIEVES,DONT GIVE THEM YOUR SUPER

Well i know this much about ANZ they are shameless thieves(i bank & trade with them but super...)

my usual super is the transport workers union but im not a member,i had a small amount in the anz/ing which i forgot about...in 14 months they took about 45% in fees,i transferred the rest into my industry super...deadset mongrels & they didnt want to at first,i said ill move the rest if you dont get your ring into gear.

lesson learnt...always use an industry fund not these retail thieves...TB

 

[Abcguy]

Hey guys. What are your opinions on all this trouble with BrisConnections? If it defaults is this going to hurt ANZ and its stock price?

 

[gavmit63]

Does anyone else feel that the level of spin coming from ANZ has lifted a notch or two since Mike Smith took the helm. Why is it that the bank is suddenly pointing to 'Underlying Profit' as a measure of success when previously they have pointed to 'Cash Profit'? The fact that 'Underlying Profit' is up 4% and 'Cash Profit' is down 43% (quoted from Business Day) may have something to do with it. Do they really think they can pull the wool over our eyes and get away with it?

Disclosure. I own ANZ shares.

 

[dhukka]

Does anyone else feel that the level of spin coming from ANZ has lifted a notch or two since Mike Smith took the helm. Why is it that the bank is suddenly pointing to 'Underlying Profit' as a measure of success when previously they have pointed to 'Cash Profit'? The fact that 'Underlying Profit' is up 4% and 'Cash Profit' is down 43% (quoted from Business Day) may have something to do with it. Do they really think they can pull the wool over our eyes and get away with it?

Disclosure. I own ANZ shares.

Yep quite sad really. Actually cash eps was down -49% and they were a little light on provisions IMO, otherwise it would have looked worse. However they admitted that provisions will need to be higher in the next 18 months. In fact it would be foolish to suggest otherwise given that non-performing loans are getting worse at an accelerating rate.

 

[Moneybags]

Very disappointing indeed, and the market thinks so too.......well and truly smacked down today. Sure hope WBC can give a better report tomorrow.

I have shares in both.......for now at least.

MB

 

[gavmit63]

Interesting article on Crikey.com. It seems I wasn't alone in thinking ANZ's reporting of their half year result was an exercise in spin. http://www.crikey.com.au/2009/04/29/anz-buries-cash-profit-as-banks-spin-the-bad-times/

 

[alphaman]

It's not just banks. Every company spins. I have not read a report that doesn't spin. It's an integral part of the sharemarket game.

 

[gavmit63]

I don't disagree alphaman, it just seems a bit more blatant than most efforts. Call me a cynic but I wonder upon what figure will Mike Smith get his bonus based upon? Net Profit, Underlying Profit or Cash Profit?

 

[Julia]

Interesting article on Crikey.com. It seems I wasn't alone in thinking ANZ's reporting of their half year result was an exercise in spin. http://www.crikey.com.au/2009/04/29/anz-buries-cash-profit-as-banks-spin-the-bad-times/

Comment on this in today's ":Money Morning" where the journalist remarked that even seasoned banking analysts went away scratching their heads.
Wonder how all those who bought banking stocks for their yield are feeling!

 

[nomore4s]

Wonder how all those who bought banking stocks for their yield are feeling!

Probably okay if they brought @ $12.50ish, also consider the d/e will come back up as this crisis eases off. But the ANZ looks to be the worst of the big 4 atm.

I'm not saying the banks are a good buy but alot of it depends on your point of view.