I now wish to expand my examination of 'stressed loans' to include the ANZ Bank as a whole. Banks work on International Standards to identify creditworthiness of loans. Unfortunately the most common international standard seems to be that each bank should set their own standard. The unfortunate consequence of that is that I have to introduce yet another definition of 'what is a stressed loan' for the ANZ Bank.
UDC Finance Categories Heartland Bank Categories ANZ (Oz parent) Categories Snoopy 'Stressed Loans' Loan Categories 7 and 8
plus 'Default' loans
less Provision for Credit Impairment.
{Note: There is no loan category 9}a/ Loans at least 90 days past due
plus b/ Loans individually impaired .
plus c/ Restructured assets.
less d/ Provision for Impairmenta/ Loans past due but not impaired.
plus b/ Loans restructured.
The guiding principle behind my definition of a 'stressed loan' is that such loans should not include loans or portions of loans already classified as impaired. In the case of ANZ, this is easy because the 'Impaired Loans' as shown in the ANZ Annual Report 2016 p114 are already shown as a separate and distinct loan category. So how does the five year picture for the 'stressed loan' position of the ANZ Bank unfold? And could we have used this picture to predict the capital raising of FY2015 before it was announced?
SNOOPY
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