ANZ critical of Govt domination

Press, 4 February 1987, Page 39

ANZ critical of Govt domination

PA Wellington The BNZ’s share price will not look as attractive as competitiors’ shares if the Government intends to continue dominating the bank, according to the ANZ. Mr Will Bailey, the managing director and chief executive of the ANZ group, said he considered the share float a good move if it was a move towards denationalising the BNZ. He said in Wellington; “If it’s an easy way to raise capital while the Government continues to dominate it, the float will be successful, but the

share price won’t be as attractive as totally priv-ate-owned competitors.”

Continued Government domination of the bank would curtail growth, and also raised questions of what dividend policy the bank would have. The capital raised in the float would need servicing, Mr Bailey said. Shareholders might expect dividends in return for their capital, he said, but this would place the BNZ in a dilemma.

' “What dividend policy will they have? One of the issues facing us (ANZ) is a dividend policy: do you retain earnings and grow, or do you distribute earn-

ings and not grow?” he said.

The share would also tend to attract a low price-earnings ratio compared with other shares because of the lack of a take-over element in the price, he speculated. "There’ll never be a take-over component in the share because it can’t be taken over.”

Mr Bailey also asked whether the BNZ planned to make bonus issues at a later stage. "In global financial sense, the need for governments to be in banking doesn’t exist. It’s constricting if government is involved,” he said.