Home > Economics, Future, Money, Organisations > NAB and ANZ Bank Write downs in Australia

NAB and ANZ Bank Write downs in Australia

The IMF (International Monetary Fund) has stated that the damage caused by the fallout from the Sub-Prime fiasco has not bottomed out as yet – Yet we find the Dow Jones start in optimistic territory on the news that Merrill Lynch is writing off USD$9 billion in debts and seeking further share issue to shore up their capital base. More good money – with the possibility of further losses.

In Australia, after the fallout from the NAB’s revelations of a A$830 million write down that the losses weren’t there fault – they just took the advice from the ratings agencies – who rated it at AAA – but the integrity of the whole Financial system is in doubt ladies and gentlemen – the NAB’s attempt to try deflect this as not their mistake is just spin – the fault with this investment is with the NAB – no one else – its called due diligence and that is something that all investors have to be fully aware of the implications of any financial transaction – there is always a risk – and whilst in no way I am casting any dispersions on the Credit Rating agencies – it is not their responsibility – the responsibility is with the investor – something rings a bell here – caveat emptor – let the buyer beware.  How long John Stuart will stay in his job as NAB CEO now, has to be open to some conjecture.

OK and now we go to the ANZ Bank – plunging more than 13%, after the bank forecast a 20%-25% drop in cash earnings after lifting bad debt provisions, hopefully the last one in Australia for the moment, well today anyway – more losses which are due to the loans to Australian businesses (Centro)  – as well as other bad debt provisions – however it may also be covering a multitude of sins that maybe to come for other banks , perhaps soon we might hear about problems with the fallout from Centro with the CBA – the Treasurer – Wayne Swan was asked a number of questions which can be further detailed in the attached link to Wayne Swan from the Treasurer website – the question of interest to me from one journalist was


“Can you assure Australians that this isn’t some sort of slowly unfolding disaster, that we won’t see other financial institutions making similar decisions?” –

The End part of the response from the Treasurer:-

“you’ve also got the fallout of what’s occurring in global financial markets and that is, therefore, impacting upon some investments also made years ago by some of these institutions”

What was need is a definitive reassurance – but instead we got more spin as follow: But I’m satisfied that our regulators are satisfied that the disclosures are satisfactory.”

Oh gosh this sounds like spin to me – its like an old friend of mine asked me once “is there anyone in control”

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