ANZ Bank annual net profit jumps 12 pct

SYDNEY: ANZ Bank posted a 12 per cent jump in annual net profit yesterday, with the lender saying it was continuing to make progress as the benefits of a restructure start to pay off.

The Australia and New Zealand Banking Group’s result for the year to September 30 came in at A$6.41 billion (US$4.93 billion).

Cash profit, the financial industry’s preferred measure which strips out volatile items, was even better, up 18 per cent at A$6.94 billion and in line with expectations.

The bank has been undergoing a restructure to shift the emphasis of its business away from Asia and onto core assets, which has seen it sell retail and wealth management arms in six Asian countries.

It has also offloaded its stake in Shanghai Rural Commercial Bank, while axing more than 1,600 full-time staff over the past year as part of its cost-cutting.

Chief executive Shayne Elliott said the result demonstrated “further progress in becoming a better balanced, better capitalised, more efficient bank”.

“Two years ago it was clear we needed to reshape ANZ’s future,” he said.

“We have made some difficult calls in that time and the new shape of ANZ is now emerging.”

The bank paid a dividend of 80 cents, in line with what shareholders received in the first half of the year.

All of Australia’s big banks are battling higher funding costs and lower interest margins, with rules now demanding they hold more reserves as a buffer against mortgages and fears over rising bad loans.

ANZ, along with National Australia Bank and Westpac, has also been embroiled in a rate-rigging scandal.

It settled a case with Australia’s corporate regulator on the opening day of a court hearing Monday over possible fixing of the country’s benchmark interest rate, although the cost to the bottom line is yet to be revealed.

Despite the “good result”, Elliott flagged a tough year ahead.

“In 2018 we expect the revenue growth environment for banking will continue to be constrained as a result of intense competition and the effect of regulation including a full year of impact of the Australian bank tax,” he said.

The government announced earlier this year it planned to slug lenders with a hefty new levy to raise A$6.2 billion over four years through a 0.06 per cent charge on the borrowings of the big five banks – ANZ, Commonwealth, Macquarie, NAB and Westpac

NAB reports its annual results next week with Westpac the week after. Commonwealth Bank, Australia’s largest, operates on a different reporting schedule. — AFP