Steadily worsening trading conditions for business customers, especially over the month of March, explain the surprise experienced by banks themselves, as much as by investors in bank securities, at the rising level of bad debts on bank books.ANZ yesterday produced data on impaired assets and loan write-offs that reinforce the primary themes from National Australia Bank's interim profit on Tuesday; with the pain rapidly emerging among business customers (but not, any longer, corporate customers) and in most regional markets but especially Australia.Chief executive Mike Smith acknowledged in an investor briefing yesterday that the change this half to the profit and loss for provisions, at $1.37 billion, "is a bit higher, I think, from what the market was expecting" but the market got its lead from the bank's trading update in February.So in spite of ANZ approaching what is now Australia's recession with a more dour assessment than almost any bank, it turns out that even Smith's crew were unsettled by the turn of events, and the remedial work required to deal with them (more on that in a later article).In ANZ's Australian retail and business banking business the charge for credit impairment, at $446 million, is up about 50 per cent from six months before and about double a year before. The bank was slightly inconsistent on which market segments are generating the higher provisions. The financial highlights at the front of the results' pack refer to the "middle market". Mike Smith in the investor briefing talked of "small to medium business". And the discussion of higher collective provisions in the Australian business refers to "retail unsecured products reflecting higher delinquencies and bankruptcies, coupled with the deterioration in Esanda motor vehicle chattels."In New Zealand, where ANZ is the dominant bank, the charge for provisions was only 20 per cent higher than six months earlier, suggesting the strife in New Zealand's economy (which largely created its own recessions within the need for the worldwide shock) might be nearing its worst.In institutional the charge, at $626 million, is down from six months before, reflecting the release of some collective provision raised to cater to any more shocks among high end customers, of which there weren't any. The provision was still double a year before. The international businesses, interestingly, did not generate an increased charge to the P&L for provisions, though these increased in Asia and the Pacific and fell in Europe and the Americas.