SHAW Analyst Comments: Major banks
July 29, 2002
Fitch

International credit rating agency, Fitch, has re-iterated that the asset quality of Australia’s 4 major banks remains strong - despite the potential fall out from the struggling global telecommunications industry, as recently highlighted with ANZ’s exposure to Marconi PLC.

Positive news

Positive news for the banks, Fitch has highlighted their well refined use of dynamic provisioning procedures thereby reducing pressure on the balance sheet over the long term. This reflects a process of ongoing improvements made since the property crash of the early 1990’s.

Fitch commented

“…even if ANZ’s exposure to Marconi PLC was added to its impaired assets as at 31 March 2002, gross impaired assets would only rise from around 1.2% to 1.4% of gross loans”. This would imply that the remaining 98.6% of ANZ’s loan book is continuing to add value to the bottom line – which is near record highs.