The ANZ Bank’s bad debts will zoom to $800 million in 2016. This is the fall out of economic slowdown in Asia. ANZ is the most Asia-focused Australian bank.
This was disclosed by ANZ bank’s chief executive Shayne Elliott. Announcing the first-quarter results, Elliot said the bank’s profits have zoomed 3.5 percent to $1.85 billion. But net profit fell 3 percent over the corresponding period in 2015, reports The Guardian.
The CEO attributed the piling bad debts to the high volatility in the region. The debts also breached the banks own estimate of $735 million. The burden of $800 million will be casting a shadow in its first-half results, due in May.
Elliott said: “I don’t think it’s any surprise that the Asian region in particular has been slowing for a period. It’s around Southeast Asia, it’s broadly based; it’s not one customer group in particular or anything like that. But it does tend to be concentrated around manufacturing, industrial companies exposed to trade.”
Since April 2015, the shares of ANZ Bank have tumbled nearly 40 percent. It was the after effect of slowdown in Chinese economy that also affected many stock markets and regional economies.
The CEO said, ANZ is cutting costs to “reposition” the business. At the same time, gains were made at the retail business in Australia and New Zealand. Market share grew in all home loan markets.
“I think the underlying businesses that we have, as I said, will continue to do well: retail and commercial here, our trade and capital flow intermediation businesses,” Elliott said.
Meanwhile, ANZ Bank’s focus on technology for credit decisions has won it laurels. The bank recently won the best finance project of the year award. It was part of the iTnews Benchmark Awards. The ANZ Bank put to use PowerCurve technology in overhauling its systems in credit reporting, reported iT News.