ANZ raises NZ first half profit by 24 per cent

ANZ has raised its New Zealand first half cash profit of $928 million by 24 per cent.

ANZ said it made a cash profit of $928 million in New Zealand in the first half to March, up 24 per cent the same half a year earlier, driven mostly by big reductions in costs.

The bank, New Zealand's biggest, raised its statutory net profit by 14 per cent to $869m.

ANZ's New Zealand chief executive, David Hisco, said the performance was as a result of the business being focused on sustainable growth, increasing productivity and delivering digital innovation for customers.

"All our business units performed well in this half due to our continued simplification of the business," he said.

Net interest income increased 3 per cent compared with the March 2016 half, primarily reflecting continued lending growth, while net interest margins have contracted due to increased funding costs and demand for fixed rate home lending, Hisco said.

In Australia, the parent company reported a 23 per cent lift in cash profit to A$3.41 billion for the six months, which was in line with market expectations.

In New Zealand, Hisco said all the business units performed well due to continued simplification of the business.

"We've boosted our focus on digital innovation which has positioned us well for a period of rapid change in banking," he said.

Hisco said ANZ was the only bank in New Zealand to offer ApplePay, which has been taken up by thousands of Kiwis, complementing its goMoney app.

Expenses fell by 12 per cent and the increase in other operating income reflected higher markets trading income and valuation gains on derivatives, he said.

Lower levels of credit losses reflected improvements in credit quality in the commercial and agri portfolios, partially offset by increased and new provisions.

The bank retained its number one market share in mortgages, which Hisco said had been balanced with our commitment to lending responsibly.

ANZ's KiwiSaver business now has more than 725,000 investors. Funds under management grew $700m to almost $10b, making ANZ New Zealand's biggest provider.