By Stuart Kelly
July 28 (Bloomberg) -- Australia & New Zealand Banking Group Ltd., the nation's fourth-biggest by market value, said full-year profit will fall as much as 25 percent as a weakening economy increases bad debts.
Cash earnings per share, which excludes income from derivatives trading, is expected to drop by between 20 percent and 25 percent in the 12 months to Sept. 30, compared with the year-earlier period, the Melbourne-based bank said in a statement today. Provisions for bad debts in the current half are likely to be about A$1.2 billion ($1.1 billion) compared with A$980 million in the first half, the bank said.
ANZ joins National Australia Bank Ltd., the nation's largest, in warning of weaker profit amid higher funding costs and increased provisions for non-performing loans. The U.S. subprime mortgage collapse has triggered more than $468 billion in losses and writedowns among banks and brokerages globally the past year.
ANZ in April posted a 7 percent drop in first-half profit, with Chief Executive Officer Mike Smith setting aside A$980 million for bad debts, four times more than a year ago.
ANZ today maintained its dividend forecast of A$1.36 for the full-year.