ANZ lifts nine-month cash profit to $1.1b

ANZ cash profit rose to $1.06 billion in the nine months ended June 30.
ANZ cash profit rose to $1.06 billion in the nine months ended June 30.

ANZ New Zealand, the nation's largest lender, lifted its nine-month cash profit by 14 per cent by trimming costs and taking a smaller provision for bad debts, making up for a drop in interest income.

Cash profit, which strips out fair value movements in hedging and insurance assets, rose to $1.06 billion in the nine months ended June 30, according to the Australia and New Zealand Banking Group NZ Branch disclosure statement. Net interest income fell 4 per cent to $1.96 billion, as interest income declined 1.2 per cent and interest expense rose 0.5 per cent.

The profit gain reflected "a reduction in provisions for bad and doubtful debts as well as reduced restructuring costs and productivity gains from simplifying the business," the lender said. That offset "the impact of a decline in net interest margin earlier in the year."

Restructuring costs fell by $85 million compared to a year earlier as ANZ completed the integration of its core banking system following the merger of its ANZ and National Bank brands.

Its credit impairment fell 66 per cent to $49 million.

The bank's commercial division, which includes its Business Banking services to smaller companies, Commercial & Agri unit for larger enterprises and UDC customers, recorded the biggest earnings gain by value in the nine months, rising to $524 million from $448 million.

Retail banking recorded a 2 per cent gain to $269 million. The lender's Wealth unit recorded a 25 per cent gain to $55 million while institutional, which provides financial services to major corporations and multi-nationals posted a 5 per cent decline in earnings to $232 million.

Statutory profit rose 7 per cent to $1.03 billion.

ANZ New Zealand paid $384 million in tax in the first nine months of the year, up from $326 million a year earlier.

ANZ shares last traded at $34.33 on the NZX and have gained about 9 per cent this year.

- BusinessDesk

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n4 at 23 Sep 2014 03:16:28 Processing Time: 491ms