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ANZ reveals huge credit crunch hit

ANZ reveals huge credit crunch hit

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Date Published : Tuesday, February 19, 2008

One of Australia's biggest financial institutions has revealed it has been massively hit by the recent uncertain economic climate and global credit crunch.

ANZ has admitted that it has been hit harder than expected by the recent economic troubles and has had to wipe out at least $365 million in new provisions for bad debts.

The Melbourne-based bank has had to wipe off the money as a result of one of its US partners being exposed to the affects of the credit crunch on home loans in that country.

According to the Sydney Morning Herald, the news sent local bank shares into a spiral, with more than $2 billion wiped from the market value of ANZ as its price plunged more than six per cent.

ANZ chief executive officer Mike Smith said: "While the Australian economy is expected to remain strong, the ongoing instability in global credit markets adds a higher than normal level of uncertainty.

"This requires a steady focus on growth, risk management and productivity to ensure we remain on track to meet the goals we have set.

"These include restoring business performance in Institutional and substantially increasing our presence in selected Asian economies."

In related news, one of the world's largest banks - Credit Suisse - has also had to write-down the value of assets in its consumer banking division, as a result of similar problems which have affected ANZ.

The bank - based in the tax haven of Switzerland - revealed it has had to wipe off more than $3 billion.

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