ANZ Bank is facing more than $300 million in write downs on loans and investments relating to its private equity operations, the
Herald Sun reported.
ANZ already has a $114 million provision to cover problem exposures in its private equity arm, but substantial provisioning will be required before the end of September, the newspaper reported.
The bank has more than $500 million of direct equity and loans to more than 40 businesses it supported through its private equity arm. ANZ resolved to wind down this business late last year.
The newspaper identified two investments where the value of the bank's investments must have plummeted.
One is Blueprint Management Holdings, a supplier of marketing services (including to many financial services companies) and which entered administration a month ago. ANZ holds a 42 per cent stake in the company.
The Herald Sun speculated ANZ was likely to write down $20 million on loans made to Blueprint and will have to write off at least $30 million on its equity investment.
A second problematic private equity investment for ANZ is Sydney-based pet food maker, Bush's International, which went into administration late last month with a severe deficit in net assets.