Frozen ING funds cost ANZ National more than expected
The frozen ING New Zealand funds have cost the country’s largest bank more than it previously anticipated following the $400 million settlement announced in August.
Tuesday, September 1st 2009, 11:09PM
ANZ National Bank reported a 43% slump in profit to $478 million for the nine months ended June 30, as it boosted its credit impairment provisions to $532 million.
The bank included a payment of $147 million related to last month’s settlement with investors in the ING Diversified Yield Fund and ING Regular Income Fund.
Three months earlier, ANZ National had previously estimated the cost of a settlement to be around $116 million.
“The ultimate cost to ANZ National Bank will depend on the final value of the units in the funds, any recoveries under insurance, the number of complaints and the results of any litigation and regulatory proceedings that may be brought into connection with the funds or their sale,” the bank says.
“The bank considers it has adequately provided for these obligations at this time.” Around 98.5% of investors accepted ING’s July offer of 60 cents in the dollar for the DYF and 62 cents for the RIF, and some 85% accepted the five-year option which will see the proceeds of the unit sales invested in an ANZ cash account at a fixed interest rate of 8.30%.
The offer also required investors to waive any right to pursue legal action, although investors who joined through ANZ National still have an avenue of redress through the Banking Ombudsman.
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