issuing more hybrid notes, page-10

Howdi,
Nice to see your interest.

Per todays AFR, last page article...

ANZ has a "preferred tier one ratio of between 7.5 per cent and 8.5 per cent"

At this time last year, the T1 Ratio was 7.7 per cent.

They want to have 20% of their earnings from Asia-Pacific by 2012, currently this is 12%. Assume earnings rise by 15% per year. Earnings will be 150% of where they are now. They want 20% of earnings form A/Pacific. SO, that's 30% of current earnings they want from Asia Pacific. Currently, it's 12%.

So, over the next 3 years or so they want to gain around 18% of their current earnings from Asia. This is an optimistic number. A very large number. But one that is certainly attainable. Even 25% of earnings is possible, esp. by end of FY2012.

$4Bn in spending will bring their ratio down to about 8.1% (rough estimate).... They will almost certainly need more than $4Bn in spending to acheive their 20% goal.... But 8.1% is still in the higher half of their preferred capital ratio....

If T1 ratio was 6%, ANZ would get SLAUGHTERED on the ASX. Actual. Fact of life. THat's the way the Australian public works.

ANZ will one day raise more capital. One of the better ways of doing this, is by issuing hybrid notes. Can we agree on this? Good, moving on.

ANZ aren't even CLOSE to needing more capital ATM. Rough calculations, they can spend ABOUT $5-6Bn before getting outside of their comfort zone, (and still be well above APRA requirements).

I don't know, but, I would presume they have more capital than any of the other Big 4 banks.

However, *IF* ANZ saw the short-medium (12 months?) opportunity to spend a large part of that $5Bn, they would rather raise capital *BEFORE* spending the money... rather than risk spending the money, than have a botched capital raising (ala: CBA).....

Ergo, my presumption that Capital won't be raised in the foreseeable future. As you are a banking student, I'm going to throw some more shameless self promotion out there and invite you to read my article (/the forums aimed at uni students wanting jobs and the website), available at http://ozbankers.com/index.php?option=com_content&task=view&id=26&Itemid=29 and http://www.ozbankers.com)