Thursday, 25 October 2007

ANZ disappoints on higher provisions

ANZ reported cash earnings (the industry's preferred measure) of $3,924 million for the year ended Sep 30 2007, 9% higher than FY06. The number came in slightly below expectations. As flagged at the half yearly provisions for credit impairment increased 39% from the prior period.

Higher bad debt charges have kicked in and if the past is any guide this will be more than a one-off as we head into the bad end of the credit cycle. NAB and WBC are due to report earnings in the next few weeks so it will be interesting to see how they do on the bad debts front.