Australian Banks big loss!

Australian Banks big loss!

news.theage.com.au

Investors have hammered ANZ Bank after it flagged $1.2 billion in bad debt provisions for the 2008 second half and warned its annual earnings could fall by up to a quarter.

(visit the link for the full news article)

Well two of the biggest banks in Australia have announced massive losses. Anz slumped 9% (1.2 billion of bad debts) just days after nab annouced losses of 832 million.

I know it's not much on compared to the losses of the states but it seems the crunch is hurting us here in Oz and reporters and the public are questioning if the banks here will be ok.

news.theage.com.au
(visit the link for the full news article)

Guess what caused the lossess. Yep, US mortgage backed securities. I read somewhere that ANB marked it's AAA rated US MBS portfolio to 10 cents on the dollar. This is on of the first markdown of such a level by anyone. For reference comprable US banks have marked down the same types of securities but only to 80-90 cents on the dollar.

Looks like the transmission of depression has reached the other side of the world. I'm don't want to start a depression session but it does provide just more evidence that this will be the worst recession in a while.