The New Zealand branch's provisions for credit impairments more than doubled to $27 million, which it said was due to fewer write-backs in the period.
The decline in earnings from the New Zealand branch contrasted with the Melbourne-based group's overall quarterly result, which saw cash profit rise 4 per cent to A$1.85 billion in the three months ended December 31.
Profit dip in first quarter in contrast to bank's overall group result.
ANZ said job cuts offset a rising wage bill, helping to contain increased costs. The lender's retail and small business segments underpinned an increase in income, while demand from corporate borrowers remained subdued.
The New Zealand earnings were supported by an 8 per cent gain in retail lending, which posted profit of $196 million, while its commercial unit posted a 17 per cent drop in earnings to $107 million. ANZ's New Zealand wealth division reported flat profit of $31 million.
A downturn in Asian economic growth had little direct impact in the first quarter for the lender, but credit conditions were becoming more difficult in the second quarter, the bank said. Because of that, ANZ said its group credit charge would be "a little above" A$800 million in the six months ending March 31, more than market expectations of A$735 million.
"Our performance in the first quarter was supported by strong expense and margin management and further progress will be apparent in the group's financial performance during the balance of the year," said group chief executive Shayne Elliott.
ANZ's dual-listed shares closed up 9c at $25.09 on the NZX.
ANZ
• Three months ended December 31
• $390 million cash profit in NZ unit, down 6%.
• NZ earnings supported by 8% gain in retail lending.
• A$1.85 billion group result, up 4%.
