ANZ.NZX - Anyone holding?

[Snoopy]

The annual provision for loan impairment at UDC (page 3 UDC Finance Annual Report 2016) is: $7.418mm down 29% on the high previous year figure $10.427m from FY2015 .

From note 6 (Net Loans & Advances) the resultant provisions on the books without bad debts already written off, with reference to the whole EOFY2016 loan book is:

$28.909m /($2,573.030m+$28.909m+$139.730m+$8.950m) = 1.05% of gross value loans on issue

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The figures for ANZ New Zealand, suitably disentangled from UDC are (using note 13: 'Net Loans and Advances' based on ANZ New Zealand's September 30th 2016 update to the Reserve Bank)

($622m-$28.909m)/ ($114,623m -$2,573m)= 0.53%

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Compare that to Heartland (HNZ AR2016, Note 11 'Finance Receivables' )

($21.161m+$4.987m)/ $3,140.105m = 0.83% of gross value of loans on issue.

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Multi year trends of the above statistics are in the table below

	FY2013	FY2014	FY2015	FY2016
UDC: Loans Impaired/Gross Value of Loans	1.55%	1.31%	1.25%	1.05%
ANZ.NZ excluding UDC: Loans Impaired/Gross Value of Loans	0.88%	0.67%	0.56%	0.53%
Heartland Bank: Loans Impaired/Gross Value of Loans	2.45%	0.93%	1.09%	0.83%

%

From note 6 (Net Loans & Advances) the resultant UDC provisions on the books with reference to the whole EOFY2017 loan book is:

$29.278m /($2,911.594m+$29.278m+$169.965m+$6.486m) = 0.94% of gross value loans on issue

(As an aside, the annual provision for loan impairment at UDC (page 3 UDC Finance Annual Report 2017) is $5.929m. This is down 20% on the high previous year figure of $7.419m from FY2016.)


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The figures for ANZ New Zealand, suitably disentangled from UDC are (using note 13: 'Net Loans and Advances' based on ANZ New Zealand's September 30th 2017 update to the Reserve Bank are (link to reference below).

https://www.anz.co.nz/resources/9/0/...df?MOD=AJPERES

($579m-$29.978m)/ ($120,539m -$2,912m)= 0.47%

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Compare that to Heartland (HBL AR2017, Note 11 'Finance Receivables' )

($25.865m+$3.852m)/ $3,575.613m = 0.83% of gross value of loans on issue.

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Multi year trends of the above statistics are in the table below

	FY2013	FY2014	FY2015	FY2016	FY2017
UDC: Loans Impaired/Gross Value of Loans	1.55%	1.31%	1.25%	1.05%	0.94%
ANZ.NZ excluding UDC: Loans Impaired/Gross Value of Loans	0.88%	0.67%	0.56%	0.53%	0.47%
Heartland Bank: Loans Impaired/Gross Value of Loans	2.45%	0.93%	1.09%	0.83%	0.83%

The above table shows the significant impaired asset divergence between a mainstream bank, like ANZ, and second tier lenders - like UDC and Heartland - is significant and ongoing. There is an interesting correlation apparent between the ANZ parent bank and its subsidiary UDC. The UDC verses ANZ impaired loan percentage looks to be tracing a path that maintains a 2:1 difference between the relative preponderance of impaired loans, with UDC having the higher number. But both are downtrending over the last five years. The level of Heartland impaired loans looks to have plateaued, albeit at a slightly lower level than UDC.

SNOOPY