Bad loans Increase in NZ, but go down in Australia
New Zealand is experiencing an increase in bad loans while these are declining in Australia. According to the half-year results released yesterday, New Zealand’s net impaired assets have increased to $1.7 billion from $1.2 billion last year. This makes 27% of the total group.
The definition of impaired assets according to ANZ is the “financial assets [such as loans] where doubt exists as to whether the full contractual amount will be received in a timely manner, or where concessional terms have been provided because of the [customer's] financial difficulties”.
Bad loans have become lesser in Australia because it did not experience any recession like most other countries and that it has survived the global financial crises better than other countries. This is what Claire Matthews said who is a senior lecturer at Massey University’s Centre for Banking Studies.
“New Zealand, on the other hand, did go into recession for a period of time and it was hit harder by the global financial crisis,” she added.
From the half year up to March 31, ANZ New Zealand reported a profit of $605 million which is a 63 per cent increase from the prior comparable period.
David Hisco, chief executive of ANZ, said that provisioning levels continue to move steadily; however, the earthquake in February is likely to affect individual provisions.
“It is still too early to fully quantify the quake’s impact, however we believe we are adequately provisioned,” he said. “The Christchurch earthquakes and continued deleveraging across consumer and business sectors are impacting New Zealand’s economic recovery,” he added.
He also said that deposits have grown strongly and that the Rugby Cup is seen to help boost the economy of the country in the next half of the year.
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Source: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10723231&ref=rss
