ANZ reported weak revenue in its half-year results.
The bank continues to rationalise its Asian loan book. In the recent reporting period, however, this didn’t provide any benefit to the net interest margin, which was lower than in the previous six months, excluding the impact of markets and rates. A repricing of loans benefit was offset by higher funding costs and changes to the mix of deposits. This highlights that there are still a lot of offsets to the repricing of mortgages.
Notably, the higher-value “fees and commissions”, as well as wealth management revenues, were weak, while cost control was good and the result was boosted by a lower bad debts expense. Impairments and delinquencies increased slightly but at this stage in line with the loan book. Overall the result highlights how the banks are increasingly dependent on cost reductions to deliver any earnings growth.