Outgoing ANZ Chairman Charles Goode told investors at the group's annual meeting they should expect ANZ to post more bad debts that may require it to raise more capital, while CEO Mike Smith said the bank may even have to raise its tier one capital ratio to 9% from its current 8.3%. "There will be further bad debts. There will more regulation," Goode was reported as saying by The Australian. "There will continue to be volatility in financial markets and this will affect valuation of derivatives, and the charges that we take on credit derivatives will be high. A loan book in such circumstances will show credit deterioration and may require more capital to support it," Goode said. Smith there was pressure globally for banks to bulk up their capital. "We are at 8.3 per cent right now. Where is it going to go? I think it will go towards 9 per cent, but I don't know how long that will take," he said. * This article was first published earlier today in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.
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