While I had a few minutes I thought a quick post on the overall impression of the numbers may be of interest. What the numbers are saying is fairly straight-forward. The Australian “Big Four” are all:
- Well capitalised, particularly in comparison to their overseas peers;
- Even with the ANZ in there, they have low loss ratios, again, in comparison; and
- Have little to no risk of going bust any time soon.
If you are in any doubt, have a look at page 15 of the ANZ report. They make the same point that the CBA’s report did – that the APRA version of Basel II is tougher than the way it has been implemented elsewhere. Under APRA rules the ANZ has 7.7% in tier one capital (a strong number). Under FSA rules, it would have about 10% and under the Canadian OSFI rules it would have 10.7% – just in tier one. These are very strong numbers.
The banks really do not need that deposit insurance – there is virtually no chance it will ever be called on. It looks increasingly like it was just a panicked move from our government – a bit of “metooism”, mixed in with some extra taxes oops – guarantee fees. Can we drop it now?