The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."
Monday, October 22, 2012
The UK has been a disaster for NAB. Will Asia be the same for ANZ?
NAB’s ‘differentiating factor’ has a terrible habit of signalling itself far too often. NAB announced that it has topped up its overlay provisions by $250m in the year to 30 September (it reports its results formally in about a fortnight). NAB stated that “in the last three months, conditions in the UK have deteriorated and economic recovery is likely to be slower than previously expected, with 4Q12 cash earnings flat qoq and flat HoH dividends at 90cps”.
The provision does not affect capital because capital deductions associated with the General Reserve for Credit Losses (GRCL) fall by an offsetting amount. In effect, it rebuilds overlay provisions that had fallen as a result if the UK strategic review in April and at only $70m brings those provisions from well below peers to somewhat more in line. However, overall coverage is the lowest in its grouping with CBA Equities noting potential downside risks from: i) an overweight position in AU SME segment, which is seeing emerging stress, ii) UK commercial property book, and iii) residual risk from SGA portfolio. Meanwhile, flat cash profits are likely to disappoint the markets. CBA Equities revised EPS estimates for FY12 down by 3.9% (and FY13 down by 1.8%).