ANZ New Zealand profit surges $343m to $1.71b

ANZ has improved the quality of its loan book. Photo / Richard Robinson

ANZ New Zealand's profit climbed $343 million, or 25 per cent, in the past 12 months to a record $1.71 billion.

The local unit of Australia & New Zealand Banking Group benefited from home loan lending growth and bedded down savings from the integration of the National Bank brand.

Cash profit, which strips out movements in the value of financial instruments, rose to $1.68 billion in the 12 months ended Sept. 30, from $1.43 billion a year earlier, the Auckland-based lender said in a statement.

Statutory net profit climbed 25 percent to $1.71 billion from $1.36 billion from 12 months earlier. Operating income increased 7 percent to $3.76 billion, while expenses shrank 2 percent to $1.46 billion.

"We have continued to reduce our duplicated costs and build a simpler, more productive business following our National Bank and ANZ brand merger in late 2012," chief executive David Hisco said. "We have grown market share in home loans, cards, KiwiSaver and commercial lending."

The New Zealand business contributed about 22 percent to its Melbourne-based parent's annual cash earnings of A$7.12 billion, up from A$6.49 billion a year earlier. The group lifted net profit 15 percent to A$7.27 billion on an 8 percent gain in operating income to A$20.05 billion.

ANZ's board declared a final dividend of 95 Australian cents per share, payable on Dec. 16, and taking total payments for the year to A$1.78.

The dual-listed shares rose 0.1 percent to $37.45 on the NZX, and last traded at A$33.26 on the ASX.

The group's New Zealand banking division, the country's biggest lender, lifted cash profit 10 percent to $1.17 billion on a 5 percent increase in net interest income to $2.36 billion, with earnings from retail lending growing at a faster pace than the commercial unit. The net interest margin slipped 1 basis point to 2.48 percent in the year. The lender wrote back a $9 million gain from its impaired assets, compared to a $44 million charge on bad debts in the 2013 year.

The bank had net loans of $96.56 billion as at Sept. 30 from $91.63 billion a year earlier, of which $37.12 billion was in retail banking and $59.53 billion in commercial. Agri lending grew 5 percent in the year to $36.56 billion and small business lending rose 12 percent to $22.88 billion.

"Our simplification strategy has been a key factor in our small business banking and commercial businesses delivering above-system lending growth for the 2014 year," the parent said. "The agri business, after a period of rebalancing, is now positioned for renewed growth."

Customer deposits rose 10 percent to $57.62 billion in the year.

ANZ's New Zealand's institutional business increased cash earnings 11 percent to $320 million, while the wealth unit more than doubled cash profit to $182 million, which included a one-off gain of $91 million from an insurance recovery relating to the frozen ING funds.

Read ANZ's media release here:

with NZ Herald