Financial Institutions - Assignment

FINANCIAL INSTITUTIONS
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INTRODUCTION (SLIDE 2)
The Australian financial system comprises of activities that involve borrowing and lending funds,
also, to the transmitting of the ownership of financial claims. Some of the services are:
 Authorised deposit-taking institutions
 Insurance
 Superannuation
 Financial markets
 Payment systems
(Slide 3)Currently, out of the existing 54 commercial banks, Australia and New Zealand Banking
Group (ANZ) is a most significant bank which has a worldwide presence and offers a wide range of
financial operations both in domestic as well as overseas market. This report would entail in
describing how ANZ has driven up the functionalities of the financial system of Australia through
its activities and performance.
TASK 1 ACTIVITIES AND PERFORMANCE OF ANZ
Sources of funds (Slide 5)
ANZ can raise funds internally and externally from following sources:
 Ordinary Equity Capital: Raising funds through issuing equity shares to the public.
 Retained earnings: Part of profits retained into business after distributing dividends.
 Reserves: Reserves created out of surplus profits can be utilised as a source of finance.
 Trading securities: Securities which are held for trading can be exchanged.
 Derivative financial instruments: These instruments can be pledged against borrowed
funds.
 Preference share capital: Issuing preference share to the public to raise substantial amount.
 Treasury shares: Shares for company's treasury through buy back or retaining at the time of
public issue.
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Illustration 1: Sources of Funds for Banks
(Source: Various Sources of Bank Funds, 2017)