ANZ Banking Group’s plan to become a super-regional financial services house have slowed as the company’s bad debts climb and its reputation suffers, ANZ chief executive Mike Smith said.
ANZ was looking to create an asset management hub for the Asia-Pacific, but the plan has been delayed due to mounting provisions by the bank and further damage to its reputation.
The bank has taken losses on funding provided to failed brokers Opes Prime and Tricom, and has estimated it would take a $100 million provision on the failed Bill Express and Primebroker Securities.
“What is really irritating is that we are having to spend so much time on remedial action and so much time and money on legacy issues when I know there is real growth potential available for the business,” Smith said in Melbourne yesterday.
On April 14 of this year, Smith announced an internal review of the bank’s lending operations.
“And once that review is complete I will take the strongest possible action to put the issues behind us all,” he said yesterday.
Smith’s comments came after ANZ announced yesterday that its bad debts provisions may rise to $1.2 billion for the second-half of 2008.
That would cause the company’s cash earnings per share to shrink by 20 per cent for the year to September 30, he said.
ANZ’s shares fell $1.94 or 11 per cent to $15.81 following the announcement.
