Bank has int. loss of $3.6M

Press, 15 May 1985, Page 42

Bank has int. loss of $3.6M

NZPA-AAP Sydney - c The Australian Bank, Ltd, has posted an interim loss ? of $3.6 million in the six ; months to the end of Janu- P ary after writing off $8.37 million in bad debts through f, what it called a loan loss provision. The half-year loss com- . pares with a $2.53M profit in the previous corresponding period. The bank said it earned an operating profit before tax and special items of $1.72M, down from $5.60M, for the six months ended ; January last year. The report said the group lifted gross earnings to ' $49.5M from $36.17M in the previous corresponding ; period from such areas as , interest earnings, foreign exchange and commissions. > The managing director, s Mr Mark Johnson, said J problem loans were made j during the bank’s early days <. and changes in borrowers’ • conditions led to bad debts. Mr Johnson said the bank ? had made mistakes by early > attempts to overcome the debt-related problem areas. • He said pre-tax operating , profit declined as a result of : one-off expenditures, related staffing and establishment of offices in Brisbane and moving into new premises in Melbourne. He said the bank was likely to be faced with an over-all loss for the year to the end of July. This would compare with its 1984 profit of $2.19M. The report said senior management and organisational changes were made to provide the bank with greater business focus and to enhance divisional profit performance. The bank said that, while the loan losses and operating profit down-turn were set-backs, basic operations were soundly based and profitability should be restored next year. The bank is increasing its capital to $33.26M with three new shareholders, Paribus Group (Australia), Pty, Ltd, the Mutual Life and Citizens Assurance Company, Ltd, and Lend Lease Corporation, Ltd.