ANZ takes hit over bad debt provision rise

  • 24/03/2016

By Sophie Boot

New Zealand shares fell, led by ANZ and Westpac after ANZ announced it was increasing its bad debt provisions.

The S&P/NZX 50 Index shed 6.3 points, or 0.1 percent, to 6,662.54. Within the index, 27 stocks fell, 15 rose and eight were unchanged. Turnover was $138.3 million.

ANZ was the worst performer, dropping 7 percent to $26.74. The dual-listed Australian bank said it would increase its provisions for bad debt by at least $A100 million ($NZ112.37m), on top of the $A800m ($NZ898.98m) it anticipated for the first half of 2016, which it projected in February within its annual results for 2015.

ANZ also fell on Australia's S&P/ASX 200, down 5.8 percent to A$23.87 in late trading.

"It was pretty much taken by surprise by much of the market," said Rickey Ward, New Zealand equity manager at JBWere.

"The market was assuming they would have bad debt, but what's been disappointing is they've increased those provisions so soon after their result announcement," Ward said.

Westpac fell 5.6 percent to $34.50. AMP dropped 1.8 percent to $6.43.

Auckland International Airport declined 2.5 percent to $6.355, Steel & Tube lost 2.2 percent to $2.20, and Fletcher Building dropped 1.7 percent to $7.68.

SkyCity gained the most, up 4.3 percent to $5.05. The casino operator posted a 30 percent gain in first-half profit to $71 million in February, citing improvements across all its properties and lower funding costs.

Fisher & Paykel Healthcare Corp advanced 3 percent to a record $9.68, and Sky TV rose 2.5 percent to $4.93.

NZ Refining rose 1.3 percent to $3.09.

Diligent Corp gained 0.7 percent to $7.21. near the $7.32 price implied at Thursday's exchange rate. Nuplex Industries, which Allnex Belgium SA is attempting to buy, rose 0.4 percent to $5.13. Allnex has offered $5.55 per share.

Outside the main index, Rubicon gained 21 percent to 26.5 cents.