ANZ mulls A$350m payout to Opes Prime clients-report

MELBOURNE, May 30 (Reuters) - Australia and New Zealand Banking Group Ltd (ANZ.AX: Quote, Profile, Research, Stock Buzz) is discussing paying A$350 million ($333 million) to clients of collapsed broker Opes Prime to compensate them for selling their share portfolios to recoup a loan to Opes Prime, a newspaper reported on Friday.

Without citing any sources, The Australian Financial Review said Opes Prime's administrator, John Lindholm, had "been given strong indications that the bank would be prepared to pay about 60 cents in the dollar to 1,200 stockbroking clients who are owed A$579 million."

The newspaper said Lindholm and ANZ had been in talks about a possible settlement but both denied an offer had been made.

Opes Prime collapsed earlier this year as the global credit crunch put pressure on banks to recoup their loans, which the stockbroker used to fund its margin lending operation. It has gone into receivership and is being investigated by regulators.

ANZ, Opes Prime's biggest creditor, seized shares it had held as collateral from Opes as it sought to recover a A$616 million loan to the broker.

The move sparked lawsuits by Opes Prime clients whose shares were sold, arguing they had priority over their shares ahead of Opes Prime's creditors.

ANZ Chief Executive Mike Smith said in April he was "pissed off" about the Opes Prime mess as the bank reported a 14 percent drop in first-half profit core profit after quadrupling its bad debt charges to A$980 million. ($1=A$1.05) (Reporting by Sonali Paul)