of interest

October 17, 2008

Bank faces claims after the collapse of margin lenders.

ONE could forgive ANZ chief Mike Smith for feeling rather more "pissed off" when he delivers the bank's full-year results next week.

The liquidation of failed margin lender Opes Prime on Wednesday, followed by Primebroker Securities yesterday, opens the way for legal action against the bank, which acted as financier for both.

Primebroker is readying a $160 million damages claim. Both liquidators are also threatening to overturn the transactions that delivered ANZ most of the assets it secured to pay down its loans to the two margin lenders.

ANZ has said previously it doesn't expect any material impact on its earnings but that may change on Monday when the mediation over its exposure to Opes is expected to conclude.

Primebroker's liquidator, Laurie Fitzgerald, also noted yesterday that the Australian Securities and Investments Commission "has taken a keen interest in [Primebroker], its history and reasons why it has ended up in this predicament".

Former Primebroker directors have made no secret of the fact they blame ANZ for its collapse.

ANZ shares closed lower yesterday, down 4.8 per cent or 87c to $17.33.