ANZ.NZX - Anyone holding?

[Tomtom]

http://www.stuff.co.nz/business/worl...ome-loan-fraud

How many suspect loan could there be in Auckland ?

Why worry about what's going on outside the bank when it's an industry that incentives people to diminish the quality of it's own loan book? I think it was W. E. Deming who wrote that "People with targets and jobs dependent upon meeting them will probably meet the targets - even if they have to destroy the enterprise to do it." If banks have a blind spot it's looking at what is going on inside their own organisations:

Based on existing investigations and mortgage fraud reporting, 80 percent of all reported fraud losses involve collaboration or collusion by industry insiders.

Linky. Other Linky related to Australia.

Also you sort of have to expect a higher level of fraud and corruption when doing business in Asia.

[winner69]

Maybe it was his last hurrah .....or got him the boot

He's probably right though


Aitken leaves Bell Potter after jab at ANZ’s CFO appointment
10 MINUTES AGO | 10:43AM | RICHARD GLUYAS
Angus Aitken, the high-profile stockbroker and managing director of institutional equities at Bell Potter, has left the firm.

Mr Aitken’s departure follows a controversial note he sent to clients on Tuesday about ANZ Bank’s appointment of investment banker Michelle Jablko as its chief financial officer.

The headline on the note read: “that new CFO has to be one of the dumber appointments I have seen … another reason to not own this stock – Sell ANZ”.

The note went on to say that UK clients were “completely amazed” that ANZ would appoint a CFO whose last major deal was advising law firm Slater and Gordon on its $1 billion-plus acquisition of the Quindell assets in Britain.

“I would be surprised if you saw anything but selling of ANZ from UK investors let alone anywhere else,” Mr Aitken said.

It was unclear this morning whether the note played any role in Mr Aitken’s departure.

Business Spectator

[Lewylewylewy]

Anyone know when the record date for this dividend is?

[Bobdn]

Anyone know when the record date for this dividend is?

Record date was 10 May. Strike price should come in under $25 AUD for those of us in the DRP. I think there's one more trading day to go, unfortunately price has gone up about 10% in the last month which is a bit of a shame.

http://www.shareholder.anz.com/pages/dividends

[huxley]

Anyone know when the record date for this dividend is?

https://www.shareholder.anz.com/pages/dividends

[Lewylewylewy]

Thanks, the div history was particularly interesting!

[Snoopy]

UDC: For FY2015:

Impaired Loans = $31.529m, Vulnerable Loans $1,018.134m
=> Impaired Loans as a percentage of Vulnerable Loans: 3.1%

I am trying to put the information below into a format so that it can be compared with Heartland Bank (my post 7700 on the Heartland thread) over the same period.

Heartland
Date	'Stressed' Loans on the books (X)	Net Financial Receivables (Impairments deducted) (Y)	(X)/(Y)	Write Offs (W)	Gross Financial Receivables (Z)	(W)/(Z)
EOHY2012	$87.728m	$2,075.211m	4.23%	$12.138m+$1.685m	$2,104.591m	0.66%
EOFY2012	$90.489m	$2,078.276m	4.35%	$14.636m+$3.180m	$2,105.702m	0.85%
EOFY2013	$48.975m	$2,010.393m	2.43%	$6.679m+$1.961m	$2,060.867m	0.42%
EOFY2014	$41.354m	$2,607.393m	1.59%	$35.258m+$3.260m	$2,631.754m	1.46%
EOFY2015	$32.824m	$2,862.070m	1.15%	$1.555m+$1.910m	$2,893.704m	0.12%

Unfortunately there are little differences in reporting standards that make this difficult.

For example, Heartland have a class of loans called 'Judgement Loans'. They pass annual judgement on these loans by rating them on a scale of 1 to 9 plus 'default'.
There is a second broad category called 'Behavioural Loans' which are separately rated, not using a scale.

UDC appear to rate all of their loans on a scale of 1 to 8 plus default (UDC prospectus December 2015, note 11d). I have previously defined UDC 'Vulnerable Loans' as classes 6,7 and 8. But category 6 is very large. So I am now going to change my mind and talk about 'Stressed Loans' which are calculated by:

Take loan total from categories 7 and 8
add 'Default' loans
less Provision for Credit Impairment.

I have redefined the 'Total Financial Assets' as listed in note 11d to be 'Net Financial Receivables'.

UDC
Date	'Stressed' Loans on the books (X)	Net Financial Receivables (Impairments deducted) (Y)	(X)/(Y)	Impaired Asset Expense (W)	Gross Financial Receivables (Z)	(W)/(Z)
EOFY2011	$126.218m	$2,007.012m	6.29%	$15.103m	$2,049.504m	0.74%
EOFY2012	$96.670m	$2,102.299m	4.60%	$10.164m	$2,141.780m	0.47%
EOFY2013	$86.877m	$2,161.193m	4.02%	$12.399m	$2,198.653m	0.56%
EOFY2014	$95.364m	$2,344.131m	4.07%	$18.633m	$2,375.936m	0.78%
EOFY2015	$82.267m	$2,429.695m	3.39%	$12.162m	$2,461.224m	0.49%

There are a couple of outlier points to note. The EOFY2011 X/Y is quite high. Over FY2014, the impairment expense for that year is larger than normal. But generally this picture is much steadier than the equivalent figures for Heartland. I realise comparing just two companies is no way to draw conclusions about one or the other verses their peers. But unfortunately most of those peers got wiped out in the GFC :-(

OK back to this comparison. The 'stressed loans' at UDC are typically three times the 'stressed loans' at Heartland when compared on a normalised basis. Furthermore the actual annual impaired asset expense at UDC is roughly twice that at Heartland. OK there are differences between the two companies. But not differences that would suggest such a wide divergence in comparative statistics. There is another key difference though!

Heartland is a listed company. But UDC is not listed. This means there are no UDC performance shares to vest for UDC managers. No incentive to massage the UDC loan books. The UDC accounts tell a consistent story in a way the Heartland accounts do not. IMO the UDC are consistent in presenting a picture of 'real' profits in the way the Heartland accounts may not , if Heartland have deliberately underestimated their 'Stressed' debts.

SNOOPY

[percy]

Snoopy,
Google kpmg fips.
Last quarterly review was December 2015,but should give you enough information for another 2/10 chapters.

[Snoopy]

Snoopy,
Google kpmg fips.
Last quarterly review was December 2015,but should give you enough information for another 2/10 chapters.

Thanks for that. I see KPMG's preferred metrics are:

1/ Impaired Asset Expense/Average Gross Loans and Advances
2/ Collective Provision/Net Loans and Advances
3/ Total Provision For Doubtful Debts/Gross Loans and Advances

Those are looking at 'Impaired Asset Expense' and 'Debt Provisions'. I am interested in 'impaired asset expense' myself because this is the actual money said goodbye to each year. IMO consideration of 'Impaired Asset Expense' gives a better picture of 'Real Profit' than the 'Provision for Impairment' (the amount added to the doubtful debt pool, to make an acceptable doubtful debt balance) that is normally used in finance company income statements.

But what interests me is those debts that are being monitored before they go bad. It seems to me that once a debt becomes partially impaired there is less the finance company can do. Working with companies and their 'stressed loans' seems to me a more useful statistic when forecasting future 'finance receivable' health. But KMPG don't seem to bother about considering that!

SNOOPY

PS Am unclear what the difference between 'Collective Provision' and 'Total Provision For Doubtful Debts' is. Would appreciate any enlightenment.

[percy]

Start with Google;
IFRS9.