Clarification: ANZ and RBS

Some amplification is required for the lead article, "ANZ's RBS portfolio severely stressed", published on Friday.

ANZ published a measure of the ratio of non-performing loans across the acquired loan portfolio as being 8.5 per cent in the original investor presentation, released in August 2009, in connection with the then agreed purchase of the businesses of Royal Bank of Scotland in six markets in Asia.

The bank's updated measure of the ratio of non-performing loans across the RBS loan portfolio, provided in an investor presentation and reported in Banking Day on Friday, remains at 8.5 per cent. Thus this was not new information, which this newsletter took it to be.

And whether new or old, it's still interesting in the context of the limited and still disappointing disclosure by ANZ in connection with its investments in Asia.

Paul Edwards, group general manager corporate communications at ANZ wrote in an email on Friday, with reference to the investor presentations from Thursday, that "the ratios in the presentation showed the anticipated IP [individual provision].

"We explained the process of fixing the CP [collective provision] based on forward estimates done a year ago, which assumed continued balance sheet growth and that as the assets had reduced this had inflated the coverage level.
 
"In addition we said that this was WIP [work in progress] as completion accounts have not been finalised and in fact Indonesia had not migrated.
 
"Furthermore we said that we had inherited some portfolios which had issues and required RBS to fully provide. In fact these portfolios have performed better during the past year. As a consequence they were fully and conservatively provided."

ANZ yesterday announced that it had completed its acquisition of all the RBS businesses in Asia, with the Indonesian assets the final portfolio to formally change hands.

Indonesia, in which ANZ has had investments since 1994, is an example of the disappointing disclosure.

ANZ Panin is still to publish its annual report for the 2009 calendar year, five and a half months into the new financial year.