sharetrader
Page 5 of 87 FirstFirst 1234567891555 ... LastLast
Results 41 to 50 of 867
  1. #41
    Member
    Join Date
    Oct 2013
    Posts
    47

    Default

    I just got this rec for ANZ on my email from Oz and it reads
    "Currency
    TheNew Zealand division of the Australia and New Zealand Banking Group Limited(ANZ) accounted for 14% of the group’s profit in FY13, required 11% of thegroup’s capital at 30/9/13 and produced an average return on NTA (RoNTA) of 23%compared to a company average of 19%. So an increase in the NZ$ relative to theA$ is good for RoNTA, good for profits and good for the absolute amount ofcapital that the company has."


  2. #42
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default

    Quote Originally Posted by blueswan View Post
    I just got this rec for ANZ on my email from Oz and it reads
    "Currency
    TheNew Zealand division of the Australia and New Zealand Banking Group Limited(ANZ) accounted for 14% of the group’s profit in FY13, required 11% of thegroup’s capital at 30/9/13 and produced an average return on NTA (RoNTA) of 23%compared to a company average of 19%. So an increase in the NZ$ relative to theA$ is good for RoNTA, good for profits and good for the absolute amount ofcapital that the company has."

    Thanks for the update Blueswan.

    Unfortunately that only applies if you live in Australia. In $NZ terms the value of the Australian profits are going down. So we can expect the NZX quoted value of ANZ shares to go down as a result of the appreciation of the NZ currency verses the OZ dollar.

    SNOOPY
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  3. #43
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default 'Bank' or 'Finance Company'?

    What is the difference between a bank and a finance company? The quick answer is, those that hold banking licences are banks. But this is not a very useful answer. I want to know how the underlying loan book differs. This is a question that is impossible to answer, because different finance companies have different areas of business expertise.

    But what would happen if you were a bank (ANZ) that bought outright a finance company (UDC) as far back as 1980? That would be enough time to reorganize things. You could steer your bank style business towards "ANZ New Zealand", and steer the 'finance style business' towards "UDC". After 33 years, how does the respective break down over the business sectors look for both?

    SNOOPY
    Last edited by Snoopy; 25-01-2014 at 01:10 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  4. #44
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default ANZ.NZ Loan Book Industry Funding Concentration FY2013

    Quote Originally Posted by Snoopy View Post
    What is the difference between a bank and a finance company? The quick answer is, those that hold banking licences are banks. But this is not a very useful answer. I want to know how the underlying loan book differs. This is a question that is impossible to answer, because different finance companies have different areas of business expertise.

    But what would happen if you were a bank (ANZ) that bought outright a finance company (UDC) as far back as 1980? That would be enough time to reorganize things. You could steer your bank style business towards ANZ New Zealand, and steer the 'finance style business' towards UDC. After 33 years, how does the respective break down over the business sectors look?
    From the ANZ New Zealand statement to the reserve bank on 30th September 2013, page 46, the loan book break down is like this:

    ANZ (New Zealand) Loan Book FY2013
    Agriculture $18,842m
    Forestry, fishing and mining $1,850m
    Business and property services $11,334m
    Construction $1,748m
    Entertainment, leisure and tourism $1,389m
    Finance and insurance $18,412m
    Government and local authority $9,910m
    Manufacturing $5,051m
    Personal lending $63,492m
    Retail trade $2,859m
    Transport and storage $2,147m
    Wholesale trade $2,704m
    Other $4,577m
    Total $144,315m

    UDC is a wholly owned subsidiary of ANZ New Zealand. So what we need to do is subtract out the UDC figures from those listed above. Then we can compare the loan book make up of 'Underlying ANZ New Zealand' with UDC.

    SNOOPY
    Last edited by Snoopy; 13-01-2017 at 02:48 PM. Reason: Tabulate Results
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  5. #45
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default

    Quote Originally Posted by Snoopy View Post
    From the ANZ New Zealand statement to the reserve bank on 30th September 2013, page 46, the loan book break down is like this:


    Agriculture $18,842m
    Forestry, fishing and mining $1,850m
    Business and property services $11,334m
    Construction $1,748m
    Entertainment, leisure and tourism $1,389
    Finance and insurance $18,412m
    Government and local authority $9,910m
    Manufacturing $5,051m
    Personal lending $63,492m
    Retail trade $2,859m
    Transport and storage $2,147m
    Wholesale trade $2,704m
    Other $4,577m

    Total $144,315m

    UDC is a wholly owned subsidiary of ANZ New Zealand. So what we need to do is subtract out the UDC figures from those listed above. Then we can compare the loan book make up of 'Underlying ANZ New Zealand' with UDC.
    UDC and ANZ New Zealand have the same balance date. So it is legitimate to work out the distribution of loans on their respective books using 30th September end of year data. First I need to slightly rearrange the above categories so that they correspond to those listed in the December 2013 UDC prospectus. Then I need to subtract the UDC equivalent figures (page 53, December 2013 prospectus) to get the underlying ANZ bank figure.

    All ANZ.NZ UDC Underlying ANZ.NZ
    Agriculture forestry, fishing and mining: $20,674m - $379m = $20,295m
    Business and property services: $11,334m -$114m = $11,220m
    Construction: $1,748m - $282m = $1,466m
    Entertainment, leisure and tourism: $1,389m -$19m = $1,370m
    Finance and insurance: $18,412m - $101m = $18,311m
    Government and local authority: $9,910m -$4m = $9,906m
    Manufacturing: $5,051m - $108m = $4,943m
    Personal & Other lending: $68,069m -($5.7m +$8.1m+$14m+$33m+$13m+$443m) = $67,552m
    Retail and Wholesale: $5,563m -$248m = $5,315m
    Transport and storage: $2,147m -$387m =$1,760m
    Total: $144,315m - $2,161m = $142,514m
    Last edited by Snoopy; 07-12-2014 at 12:55 PM. Reason: Tabulate data
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  6. #46
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default

    Quote Originally Posted by Snoopy View Post
    UDC and ANZ New Zealand have the same balance date. So it is legitimate to work out the distribution of loans on their respective books using 30th September end of year data. First I need to slightly rearrange the above categories so that they correspond to those listed in the December 2013 UDC prospectus. Then I need to subtract the UDC equivalent figures (page 53, December 2013 prospectus) to get the underlying ANZ bank figure.

    Agriculture forestry, fishing and mining: $20,674m - $379m = $20,295m
    Business and property services: $11,334m -$114m = $11,220m
    Construction: $1,748m - $282m = $1,466m
    Entertainment, leisure and tourism: $1,389m -$19m = $1,370m
    Finance and insurance: $18,412m - $101m = $18,311m
    Government and local authority: $9,910m -$4m= $9,906m
    Manufacturing: $5,051m - $108m = $4,943m
    Personal & Other lending: $68,069m -($5.7m +$8.1m+$14m+$33m+$13m+$443m)= $67,552m
    Retail and Wholesale: $5,563m - $248m = $5,315m
    Transport and storage: $2,147m -$387m =$1,760m

    Total $144,315m - $2,161m = $142,514m
    Rather than put too many figures in one table, the percentage of loan assets in the allocated asset categories are as follows:

    UDC ANZ
    Agriculture forestry, fishing and mining: 17.5% 14.2%
    Business and property services: 5.3% 7.9%
    Construction: 13.0% 1.0%
    Entertainment, leisure and tourism: 0.9% 1.0%
    Finance and insurance: 4.7% 12.8%
    Government and local authority: 0.2% 7.0%
    Manufacturing: 5.0% 3.5%
    Personal & Other lending: 23.9% 47.4%
    Retail and Wholesale: 11.5% 3.7%
    Transport and storage: 17.9% 1.2%

    Not all divergences are significant You can see the big divergences here. My observations on the above figures are listed below:

    1/ UDC has over ten times their underlying loan book in construction, compared with underlying ANZ. Construction financing would be classed as higher risk lending.

    2/ ANZ has three times the UDC finance and insurance quota. I believe the ANZ figure includes superannuation and kiwisaver funds which would explain that difference.

    3/ The UDC relative share of the local government market is miniscule. That makes sense. Most local bodies have good credit ratings: why borrow at higher rates from a finance company when a bank will lend you those same funds at a lower rate?

    4/ ANZ has double the percentage of loans under management in the personal category. Makes sense as UDC doesn't do house mortgages!

    5/ Retail and wholesale much higher with UDC. I would guess that reflects the relative risk of small retail and wholesale businesses.

    6/ Transport and Storage at UDC much higher. Possibly this reflects the greater funding of cars and trucks?

    SNOOPY
    Last edited by Snoopy; 03-12-2014 at 06:31 PM. Reason: Tabulate Data
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  7. #47
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,289

    Default

    Hi Snoopy

    Those relative percentages are pretty much as we would expect. As you note, finance companies aren't into house loans but are big financiers at the property development end of town - or at least were when that was a big thing! They also do a big business in financing the transport and logging industries, earth moving, farm machinery etc. Their personal loans cater to a generally lower security sector so we wouldn't expect them to compete directly with the banks.

    What the figures don't tell us so clearly is the quality of the respective loan portfolios but of course a fair idea of this can be gleaned from write offs and provisioning from year to year.

  8. #48
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default UDC Balance Sheet Impaired Loan Percentage FY2013

    Quote Originally Posted by macduffy View Post
    Those relative percentages are pretty much as we would expect. As you note, finance companies aren't into house loans but are big financiers at the property development end of town - or at least were when that was a big thing! They also do a big business in financing the transport and logging industries, earth moving, farm machinery etc. Their personal loans cater to a generally lower security sector so we wouldn't expect them to compete directly with the banks.

    What the figures don't tell us so clearly is the quality of the respective loan portfolios but of course a fair idea of this can be gleaned from write offs and provisioning from year to year.
    Frankly I am surprised how high the provision for loan impairment is at UDC (page 33 UDC 2013 prospectus). Granted it has been reducing since the depths of the GFC.

    From note 8, with reference to the whole EOFY2013 loan book:

    $37.460m / ($2,241.110m+$37.460m+$131.094m+$7.439m) = 1.55% of gross value loans on issue

    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 update to the Reserve Bank)

    ($826m-$37m)/ ($91,543m -$2,103m) = 0.88%

    Compare that to Heartland (HNZ AR2013 p39)

    $50.491m/ $2,060.867m = 2.45% of gross value of loans on issue.

    Of course we all know that UDC isn't a 'real' finance company, even to the extent that they don't have to keep the Reserve Bank updated on their financial position. As long as the parent ANZ New Zealand (who have full control of the UDC purse strings) keeps their own disclosure up to date, the UDC are off the radar as far as the Reserve Bank of NZ is concerned. In practice UDC are simply a 'marketing arm' of the ANZ.

    SNOOPY
    Last edited by Snoopy; 03-07-2018 at 02:06 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  9. #49
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default ANZ.NZ Loan Book Classification FY2013

    Quote Originally Posted by Snoopy View Post
    Frankly I am surprised how high the provision for loan impairment is at UDC (page 33 UDC 2013 prospectus).
    On page 40 of the ANZ NZ September 30th Reserve Bank disclosure, there is a table listing the class of loans (0-9) , along with their probability of default. '9' is default, so the probability for a grade 9 loan defaulting is 100%. However of more interest is the other grades of loan and their probability of default.

    For retail mortgages:
    Grades 0-3: 0.2%
    Grades 4: 0.46%
    Grade 5: 0.93%
    Grade 6: 2.11%
    Grade 7,8: 5.4%

    For other retail:
    Grades 0-2: 0.1%
    Grades 3-4: 0.29%
    Grade 5: 1.12%
    Grade 6: 2.67%
    Grade 7,8: 11.25%

    Allowing for the fact that the grading groupings do not quite match up grades 0-6 are surprisingly similar. It is the loans in category 7 and 8 that are twice as likely to default in finance companies, given that in general finance companies have very low (or no) exposure to retail mortgages.


    SNOOPY
    Last edited by Snoopy; 03-02-2016 at 02:50 PM. Reason: Tabulate Data
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  10. #50
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

    Default

    Quote Originally Posted by Snoopy View Post
    On page 40 of the ANZ NZ September 30th Reserve Bank disclosure, there is a table listing the class of loans (0-9) , along with their probability of default. '9' is default, so the probability for a grade 9 loan defaulting is 100%. However of more interest is the other grades of loan and their probability of default.

    For retail mortgages:

    Grades 0-3: 0.2%
    Grades 4: 0.46%
    Grade 5: 0.93%
    Grade 6: 2.11%
    Grade 7,8: 5.4%

    For other retail:

    Grades 0-2: 0.1%
    Grades 3-4: 0.29%
    Grade 5: 1.12%
    Grade 6: 2.67%
    Grade 7,8: 11.25%

    Allowing for the fact that the grading groupings do not quite match up grades 0-6 are surprisingly similar. It is the loans in category 7 and 8 that are twice as likely to default in finance companies, given that in general finance companies have very low (or no) exposure to retail mortgages.
    The ANZ.NZ grading system is from 0 to 9, where '9' is defined as 'default'. The ANZ statement of position to RBNZ (30th September 2013) lists net loans and advances to be $90,489m. Bizarrely when you go to the IRB exposures by customer credit rating, the total credit risk exposure jumps to $125,679m. Something to do with 'off balance sheet credit exposure' I think. Maybe those 'grade 9' exposures are included as part of this figure? Anyone know?

    Total impaired assets from note 15 amount to $894m. That is hardly material when total loan assets on the books are $90,489m.

    The whole point of this observation is that at a pinch you can ignore the impaired assets in the ANZ.NZ report to the RBNZ. You can't do that when you are considering a bank like Heartland.

    SNOOPY
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •