ANZ lifts bad debt provisions amid commodity price crash

Thursday, 24 Mar 2016 06:06:31 | Michael Janda And Peter Ryan

ANZ bank logos are displayed on signs outside a bank branch in Sydney in April 2011. (AAP: Sergio Dionisio, file photo)

ANZ bank has flagged a $100 million-plus increase in its bad debt provisions over the past month due to resources sector exposures.

The ABC understands that the increase in bad debts relates largely to ANZ's loans to coal mining giant Peabody Energy and South Australian iron ore and steel producer Arrium.

The ABC reported earlier this month that US-owned Peabody Energy is likely to seek Chapter 11 bankruptcy protection in America, while Arrium is struggling to secure private and public funding to keep it afloat.

ANZ's acting chief financial officer (CFO) Graham Hodges said the bank is ensuring that investors are kept up-to-date with any change in its bad debt outlook.

"While the overall credit environment remains broadly stable, we are continuing to see pockets of weakness associated with low commodity prices in the resources sector and in related industries," he said in a statement to the ASX.

"This is a challenging part of the cycle for these customers with implications for the banking sector as individual circumstances evolve."

The bank had already disappointed investors by lifting its credit charge to more than $800 million in a trading update just over a month ago - $65 million more than most analysts had expected.

That increase was due to a rise in bad debts throughout its Asian customers, as the region's economy slows down.

AustraliaPlus

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ANZ lifts bad debt provisions amid commodity price crash

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