issuing more hybrid notes, page-14

ricee007

More a general observation on the huge differences in capital treatment of acquired businesses than a specific disagreement with any of your comments.

That said, ANZ have plenty of hybrid capacity (it is limited to 25% of total tier 1 capital), so as they acquire more businesses, I would expect them to use more hybrid equity than more expensive ordinary equity.

Given the GFC, APRA have been strongarming all ADI's to hold plenty of capital - 8% appears to be the new minimum tier 1 ratio for banks. APRA have also made comments about banks holding more capital on an ongoing basis - if 8% becomes the norm, 70% dividend payout ratios can only be sustained via earnings dilution from DRP's.