ANZ maintains dividend despite profit fall. The ANZ is making sure that it keeps shareholders sweet after its first half profit was battered by some dodgy dealings with the likes of Opes Prime, Tricom, Centro, Lafayette Mining and a tottering monoline bond insurer in the US. Net after tax profit fell 7% to $1.963 billion and 14% on a cash basis to $1.674 billion. But the interim dividend is being maintained at 62 cents a share, which will require the payout of $1.19 billion to shareholders, or more than 72% of cash earnings. If all the cash is paid out, it will leave around $550 million or so in retained cash, which will put the ANZ’s capital ratios under pressure, but cutting the dividend would have been career shortening for some on the board. ANZ is under pressure: that 72% payout ratio is very high (up from 70% in the second half of 2007 and 59.6% in the first half). By having the issue underwritten, the bank will get the cash, one way or another, and the underwriters will raise that by selling ANZ shares in the market after the dividend has been paid. That way the bank keeps shareholders happy and keeps its auditors and the regulators sweet as well. No job cuts or branch closures… yet. But watch the institutional area where the problem loans to Tricom and Opes occurred. That’s where the blood will flow, eventually. — Glenn Dyer

SMH swallows food prices spin. To claim that the government’s plan to relax foreign property investment rules will cut food prices by increasing supermarket competition, as The SMH did this morning, is an invention of the worst kind. Did The SMH consider any of these factors? Oil prices hit $US119.90 overnight; wheat, corn and sugar prices rose; rice imports are going to cost more; and the drought continues in parts of Australia. It would have been more accurate to report that the plan is an attempt to stop Woolies, Coles and Bunnings from “landbanking” (which is what the major UK chains, such as Tesco, were found to be doing by the British Competition watchdog). And there are more important factors constraining Costco and other international retailers expanding in Australia: supply arrangements, transport problems, the cost of capital, the weak US dollar and fewer suppliers to play off against each other. — Glenn Dyer