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Bank results beginning to sour...

Discussion in 'General Investing Discussion' started by Tropo, 31st Mar, 2008.

  1. Tropo

    Tropo Well-Known Member

    17th Aug, 2005
    Bank results beginning to sour

    Four of the five major banks close their books for their financial half year and banking analysts are expecting to see further write downs.
    Analysts warn however these writedowns could quickly turn into losses within 12 months.
    Half year profits are expected to reflect relatively strong economic conditions however expectations are that profits will slow quickly reflecting writedowns and the increased costs of funding loans that they have not been able to entirely pass through to borrowers.
    UBS believes that the major banks are currently exposed by approximately $8.25 billion to the current string of high profile failures.
    UBS believes that as much as $3.6 billion is unsecured and as a result may be written off as soon as 2009.

    Source: The Age

    ANZ to force Opes Prime sale

    Creditors including ANZ are looking to recover over $1 billion in debt from Opes Prime who was put into receivership last Thursday.
    Merrill Lynch and ANZ which provided the debt will be selling stock. It is understood that Merrill Lynch has already sold over $300 million of stock.
    According to a report Opes' clients are expected to lose between $200-300 million. Stock held by individuals and super funds were used as security for Opes' stock lending business.
    ANZ and Merrill Lynch have security that ranks above clients, and ANZ have indicated that they view these clients as "unsecured creditors" of the organisation.

    Source: The Australian Financial Review

    New rescue plan for distressed banks

    Australian banks that find themselves in crisis could be taken over by the Australian Prudential Regulation Authority under a new plan proposed by our top regulators.
    The Council of Financial Regulators has recommended that the existing powers to deal with deposit taking institutions in "distress" be extended so that APRA could arrange a takeover, or transfer of assets and liabilities, to another institution.
    he Australian Bankers Association said that while it recognises the need to ensure stability of the system, any changes to legislation should not be made until there had been consultation to ensure there were no unintended side effects.

    Source: The Australian Financial Review