ANZ Bank says full-year profit lowest in 16 years!

MELBOURNE, Australia - July 28, 2008 - Australia & New Zealand Banking Group Ltd. forecast the biggest full-year profit drop since 1992 as bad loans swell, sending the stock to its steepest slump in 21 years.

Earnings per share excluding income from derivatives trading will decline 20 percent to 25 percent in the 12 months to Sept. 30, Melbourne-based ANZ said in a statement. Chief Executive Officer Mike Smith, who joined Australia's fourth-largest bank from HSBC Holdings Plc in October, said the company tripled provisions for delinquent loans from a year earlier.

Australia Treasurer Wayne Swan said ANZ's announcement shows the nation's economy isn't immune from turmoil in global financial markets. Australia's five biggest banks have lost a combined A$27.4 billion ($26 billion) of market value since July 25, when National Australia Bank Ltd. said provisions for securities tied to U.S. mortgages jumped more than fivefold.

"Until trust is rebuilt and investors work out who owes what, and who's going to lose what, there's going to be uncertainty," said Hans Kunnen, head of investment market research in Sydney at Colonial First State Global Management, which holds about $128 billion of assets.

ANZ fell 9.8 percent to A$16.02 at 2:44 a.m. local time, the lowest since March 2003. The stock has lost 42 percent this year, the worst performer among Australia's seven biggest banks.