‘Flattering’ profit for ANZ
"Our encouragement to Kiwis to save has pleasingly also gained traction." David Hisco, head of ANZ in New Zealand
ANZ Bank’s New Zealand chief executive says a softening in the housing market has eased his discomfort about prices but buyers should still be careful.
The Kiwi arm of the bank posted a 24 per cent increase in profit in the first half of the financial year, to $928 million.
New Zealand chief executive David Hisco said the solid performance was a result of the business being focused on sustainable growth, increasing productivity and delivering digital innovation to customers.
He said that since ANZ and National Bank became one entity in 2012, the business had been focused on simplification, streamlining its systems and product offerings from more than 300 to fewer than 50.
‘‘Once you’re on that journey, you keep finding stuff, like peeling an onion.’’
Australian media pointed to a drop in staff numbers of almost 3000 as a factor in the overall group’s 23 per cent profit lift, to A$3.4 billion (NZ$3.7B) for the six months.
Hisco said staff there had been a small reduction in New Zealand staff numbers in the past six months, from 6317 in September 2016 to 6250 in March 2017.
‘‘There are often minor restructurings here and there as we’re constantly looking to keep costs down and improve customer service and when we do them in New Zealand we try to manage any job losses through attrition.’’
Net interest income increased 3 per cent compared with the March 2016 half, primarily reflecting continued lending growth, while net interest margins contracted due to increased funding costs and demand for fixed rate home lending.
Hisco said expenses fell 12 per cent and the increase in other operating income reflected higher markets trading income and valuation gains on derivatives.
‘‘We’ve retained our number one market share in mortgages, which has been balanced with our commitment to lending responsibly.’’
He said a slowdown in Auckland’s property market was good news for first-home buyers and other owner-occupiers, who stood more of a chance since investors were targeted with higher loan-tovalue requirements which slowed their activity.
In the previous half, the bank struggled to raise deposits to match the demand for loans. But that had improved this time.
‘‘Our encouragement to Kiwis to save has pleasingly also gained traction, with growth in customer deposits.’’
He said the headline profit figure was a ‘‘bit flattering’’ due to accounting changes. But the result was solid.
‘‘It’s reflective of the fact that New Zealand is going pretty well and the economy is trucking along nicely. It’s one of the better parts of the world right now.’’
ANZ is the first of three major Australian banks to deliver their half-year results over the next week, with BNZ owner National Australia Bank reporting its interim results tomorrow, and Westpac following next Monday.