ANZ New Zealand says an improving economy and its ditching of the National Bank in favour of a single retail brand helped it achieve a 27 per cent lift in half-year cash profit to a record $887 million.
The bottom-line result for the six months to March 31 was a 27 per cent increase on the same period of the previous year and the strongest profit growth of the Australasian lender's four divisions.
The bank said the profit boost was also the result of growth in home loans and KiwiSaver, strong lending to the commercial and export sectors and major reductions in credit provisions as a result of improved economic conditions.
"The economy in New Zealand is improving and because we're the largest bank with an exposure to that economy that's obviously a benefit to us," said ANZ New Zealand chief executive David Hisco. "We've also been continuing to finalise our simplification programme, which is about getting rid of the duplication of the two brands [rebranding National banks to ANZ] and that continues to bear fruit in terms of getting costs out."
ANZ Banking Group, the New Zealand division's Melbourne-based parent company, reported an 11 per cent rise in cash profit to A$3.5 billion ($3.8 billion).
The bank said it had increased its share of this country's home lending market by 44 basis points compared with a year ago while at the same time implementing the Reserve Bank's restrictions on high loan-to-value (LVR) lending.
The central bank introduced the LVR policy in October in an effort to cool a surging housing market in many parts of the country, especially Auckland.
"We've still had good volumes but people have been putting in larger deposits and by and large that's what the Reserve Bank wanted - they wanted to see people have greater equity in their homes ..."
Hisco said the bank had continued to approve high-LVR loans, while remaining within the Reserve Bank's limits.
ANZ New Zealand's wealth division, which accounts for more than a quarter of this country's KiwiSaver users, reported earnings of $121 million, up from $38 million in the same period a year earlier.
Hisco said he was expecting even better results in the future, although there could be a "blip in the economy" as a result of this year's elections.
"But we'd hope that we can get through the election and keep powering on without too many issues because New Zealand's on the cusp of having some good years of economic output."
ANZ's result comes on the back of ASB's $416 million record half-year profit, which it reported in February. Westpac and the BNZ will report their interim results next week.