ANZ eyeing acquisition, says CEO

ANZ Banking Group Ltd chief executive Mike Smith says he expects the bank's revenue
to continue to rise, but has warned bad debt provisions will also increase.
"Basically revenues are likely to continue to increase but we will have an increase
in provision charge so therefore one has to offset the other," Mr Smith told ABC
Television on Sunday.
Mr Smith said he expected provisions to be around $1.4 billion to $1.5 billion over
the coming half years.
"We're really saying we've got four halves where provisions are about the $1.4, $1.5
number billion."
On Wednesday, ANZ reported a 28 per cent plunge in first half profit after bad debts
and losses on derivative trades spiked, and warned further loan defaults will hurt
its annual earnings.
Net profit for the half year ended March 31 fell to $1.42 billion, from $1.96
billion in the same period last year.
Provisions almost doubled to $1.4 billion, from $726 million.
Mr Smith said the group "hopes" to make an acquisition this year, amid reports the
company may be in the race for the Royal Bank of Scotland's (RBS) Asian assets.
Mr Smith would not confirm if the bank was specifically looking at RBS's Asian
retail and commercial assets.
"All I would say is that we're one of the interested parties looking at assets
within Asia," he said.
The Wall Street Journal reported last month that RBS had short-listed three bidders
- ANZ, HSBC Holdings and Standard Chartered - for its Asian assets in a sale that
could fetch up to $US1.8 billion ($A2.48 billion), citing people familiar with the
situation.
Mr Smith said the bank might have to raise capital for an acquisition.
"I think you have to look at capital on a dynamic basis.
"Capital has to be raised when you need it, if there is an acquisition, for example."
Mr Smith signalled the bank may be cautious about passing on some or all of any
future cash interest rate cuts by the Reserve Bank of Australia (RBA) to its
customers because its funding costs remained high.
"It's in all of our interest to cut rates as much as we can.
"It will reduce the potential bad debt level.
"However we also have to realise that the official rate from the RBA has absolutely
no correlation to our funding rate and where we get our funding."