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2 Comments
Exactly: ANZ shareholders have a higher priority claim on returns than depositors, who underwrite the NZ banking system.
According to the Reserve Bank, the new capital requirements mean banks will need to contribute $12 of their shareholders' money for every $100 of lending up from $8 now, with depositors and creditors providing the rest.
ANZ shareholders are generally impressed. One can only conclude they think there are greater fools elsewhere underwriting their future returns.
Audaxes
I'm an older man but surprisingly I'm an EPA for my mother's property which is mainly invested with the ANZ and the term deposit comes up for renewal shortly. My mother will be 98-years-old in December. The interest rate has been contemptible at 0.95%. For a 9 month term the rate has now increased to 1.55 %. still well below inflation. Now that you have drawn my attention to the fact that, virtually, depositors are subsidising shareholders' dividends I'm considering withdrawing the lot and putting it in Auckland Airport shares.
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