ANZ's RBS portfolio severely stressed
It's taken a long, long time for ANZ to disclose anything halfway meaningful on the Royal Bank of Scotland businesses the bank has bought (or is still buying, in one case) in six Asian markets. But one piece of news did emerge on the third day of the bank's tour of Asia for select investors, analysts and one reporter from News Limited.The ratio of non-performing loans across the RBS loan portfolio of US$3 billion is 8.5 per cent, the bank disclosed in presentation slides lodged with the Australian Securities Exchange under the name of the bank's chief risk officer for Asia, Nigel Denby. The ratio of non-performing loans for ANZ's other businesses in Asia was 1.6 per cent.The bank said the ratio of collective provisions to risk-weighted assets on the RBS portfolio was 6.9 per cent, or more than fives time the ratio across the rest of ANZ's Asian business.Deposits acquired through the takeover, at US$6.5 billion, were broadly in line with expectations when ANZ announced the purchase in August 2009 (as are the level of loans).How much ANZ has paid RBS for these businesses was always unclear 10 months ago and remains unclear. At the time ANZ said it was US$550 million, and a slight premium to the "fully provided, recapitalised, net tangible book value" of the businesses. RBS at the time said ANZ agreed to pay US$418 million.Whatever nuances might inform the local market strategy for ANZ in each targeted country in Asia, one goal, simply stated, remains the same: to be "a top four foreign bank".The third day of an investor tour of Asia heard that "top four" among foreign banks is the goal in China, Hong Kong, Taiwan and also Korea. The investors heard the same claim the day before on several south-east Asian markets.