Profit tumbles as ANZ looks to main game

ANZ has suffered a slide in its cash profit as it continues to cast off divisions and refocus on its domestic business.

The banking heavyweight yesterday reported a cash profit — a closely-watched industry measurement of underlying earnings — of $2.88 billion for the six months to March.

That was down 16 per cent from the same period last year, largely due to a previously disclosed loss from two wealth businesses it has now offloaded.

For continuing operations, cash profit rose 4.1 per cent to $3.49 billion, helped by a $76 million reduction in expenses.

Net profit jumped 14 per cent to $3.32 billion.

Operating income from continuing operations dipped for a third straight half, slipping 1.7 per cent to $9.81 billion. The group’s net interest margin — a key measure of profitability — dipped 0.05 percentage points over the half and 0.07 percentage points over the year as the benefit of previous mortgage rate rises faded.

Chief executive Shayne Elliott said the slimmed-down bank was well positioned, with the lender expecting the difficult trading conditions it forecast two years ago to continue into the foreseeable future.

“We expect revenue growth for the second half of 2018 to continue to be constrained by intense competition as well as the impact of increased regulation,” Mr Elliott said.

“Historically high levels of household debt and low wage growth will offset some of the positive impact of recent strong employment data, so consumers are likely to remain cautious.”

The continuing operations numbers strip out the OnePath pensions and investments business sold to IOOF and life insurance business sold to Zurich. Both deals are expected to be completed in the first half of this financial year.