ANZ Banking Group is this week expected to reveal that its New Zealand arm helped lift its first-half profit to a record.
While strong growth in Australia and the earnings of the New Zealand operation, led by Sir John Anderson, will lift ANZ's profits, analysts have expressed some concerns over
the progress of National Bank of New Zealand, which ANZ bought for A$5.4 billion in late 2003.
The market consensus is for ANZ's profit to lift to around A$1.45 billion ($1.55 billion), compared with A$1.39 billion for the same time last year, but some analysts are tipping an even stronger performance.
ABN Amro has forecast cash earnings of A$1.59 billion for the six months to March 31, driven by strong momentum in the Australian home lending and deposits divisions. It said while investors' issues with the integration of NBNZ had dissipated, there were still concerns about the competitive environment in New Zealand and its growth prospects.
"With nearly 25 per cent of profit generated in New Zealand, we believe ANZ will attempt to allay investors' fears regarding the economy and irrational competition, as well as the potential loss of customers through the integration of NBNZ," Mr Reoch said.
The first-half result, to be announced on Wednesday, is expected to show ANZ is on target to achieve 8 per cent growth in full-year earnings, compared with 9 per cent the previous year.
Analysts believe that while the results for the main banks will remain strong this reporting season, profit announcements could herald a weaker outlook.
Credit Suisse First Boston highlighted decelerating growth, continued margin compression, diminishing productivity improvements and a softening earnings growth outlook in New Zealand.
- AAP
