Why Australia and New Zealand Banking Group Limited’s (ASX:ANZ) Risk Management Makes It More Attractive – Simply Wall St News

Large banks such as Australia and New Zealand Banking Group Limited (ASX:ANZ), with a market capitalisation of A$83.85B, have benefited from improving credit quality as a result of post-GFC recovery, leading to a strong growth environment. A borrower’s demand for, and ability to repay, loans is driven by economic growth which directly impacts the level of risk Australia and New Zealand Banking Group takes on. With stricter regulations as a result of the GFC, banks are more conservative in their lending practices, leading to more prudent levels of risky assets on the balance sheet. The level of risky assets a bank holds on its accounts affects the attractiveness of the company as an investment. So today we will focus on three important metrics that are insightful proxies for risk. See our latest analysis for Australia and New Zealand Banking Group

ASX:ANZ Historical Debt Jan 25th 18
ASX:ANZ Historical Debt Jan 25th 18

How Much Risk Is Too Much?

Australia and New Zealand Banking Group is engaging in risking lending practices if it is over-exposed to bad debt. Loans that cannot be recuperated by the bank, also known as bad loans, should typically form less than 3% of its total loans. When these loans are not…

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