ANZ profit up on staff cuts, fewer bad debts

ANZ New Zealand lifted its annual cash profit by 12 per cent.
ANZ New Zealand lifted its annual cash profit by 12 per cent.

ANZ New Zealand, the country's biggest lender, boosted its annual cash profit as staff cuts and fewer bad debts trimmed its costs, offsetting smaller margins lending in the face of increased competition.

Cash profit rose to $1.44 billion in the 12 months ended September 30 from $1.29 billion a year earlier, the bank said in a statement. Statutory profit rose 8 per cent to $1.37 billion.

Net interest income fell 3 per cent to $2.64 billion, a smaller decline than the 13 per cent drop in operating expenses to $1.49 billion. The cost cuts came in a period when it shaved 10 per cent from its workforce to 7,400 full-time equivalent positions. The bank cut its provision for credit impairments to $65 million in the year from $194 million in 2013.

"Our business performance has been built on simplifying our products, improving processes and systems and delivering a better banking experience for customers," chief executive David Hisco said.

"We have concentrated investment on our brand, sales training, branch coverage and digital capability."

The New Zealand unit's performance was in line with the wider group, with Australia & New Zealand Banking reporting an 11 per cent increase in cash profit to A$6.5 billion on a 3 per cent increase in operating income to A$18.38 billion. The group lifted net profit 11 per cent to A$6.27 billion, and declared a final dividend of 91 Australian cents per share, taking the total payment to A$1.64.

ANZ's New Zealand segment, which excludes certain businesses within ANZ New Zealand in its reporting, increased net loans 4 per cent to $91.48 billion in the year, while lifting customer deposits 5 per cent to $52.24 billion.

The net interest margin shrank to 2.49 per cent as at Sept. 30 from 2.63 per cent a year earlier amid strong lending competition, more expensive wholesale funding costs, and customers choosing lower margin fixed rate products, the bank said.

The bank's fastest lending growth came from small businesses, which grew an annual 13 per cent to $20.45 billion, followed by 3 per cent growth in retail loans to $36.42 billion, and a 1 per cent increase in commercial agri lending to $34.62 billion.

ANZ's dual-listed shares rose 0.5 per cent to $38.05 on the NZX, and have climbed 20 per cent this year.

- BusinessDesk

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