ANZ profits up 7pc on lower costs

Photo / Supplied
Photo / Supplied

Australian & New Zealand Banking Group's local unit lifted first-half profit 7 per cent as it grew its loan book and booked smaller charges on bad loans.

Net profit rose to $655 million in the six months ended March 31 from $615 million a year earlier, ANZ New Zealand said in a statement. Cash profit, which excludes unrealised movements in financial instruments, climbed 14 per cent to $699 million.

The gains came despite a 4 per cent decline in net interest income to $1.3 billion, with tighter margins stemming from lower returns from capital and "rate insensitive deposits in a low interest rate environment." The bank's provision for credit impairment more than halved to $43 million in the half, while operating expenses shrank 11 per cent to $765 million.

The bank is underway with the biggest change on the New Zealand lending scene since ANZ Bank bought National Bank from Lloyds TSB in 2003 for $5.7 billion.

It has been scrapping the National Bank brand, shrinking the group's network of branches and cutting out duplication ahead of relinquishing the rights to use the Lloyds black horse logo in 2014.

"While the revenue environment is still subdued, our simplification programme has helped us lift productivity and reduce costs and has positioned us to better leverage our scale to support future earnings growth," chief executive David Hisco said in a statement.

The local unit grew at a faster pace than the rest of the group, which posted a 1 per cent increase in net profit to A$2.94 billion. Cash profit grew 10 per cent to A$3.18 billion.

The group announced an interim dividend of 73 Australian cents per share, payable on July 1, with a record date of May 15.

Hisco said the bank's New Zealand shareholders will get imputation credits for the dividend of 9 NZ cents.

The local unit's net loans grew 4 per cent to $89.26 billion as at March 31 from the same period a year earlier, while customer deposits gained 8 per cent $51.65 billion.

Retail loans grew 3 per cent to $35.81 billion, while commercial agri-lending advanced 1 per cent to $34.24 billion and small business bank loans climbed 13 per cent to $19.21 billion.

ANZ's dual listed shares rose 0.2 per cent to $36.55 on the NZX, with trading in Australia yet to open.

Read the bank's full investor results presentation here.

- BusinessDesk

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