Economy helps lift ANZ profit to $2b
ANZ reaped a record $1.99 billion profit in New Zealand in the past financial year.
The 10-digit result is equal to almost 40 per cent of the profits made by the entire banking sector in New Zealand last year.
It soars above a $390 million profit at Air New Zealand this year, a loss of $190m at Fletcher Building, and a $20m loss at Genesis Energy.
It works out at $222,222 for each one of its 9000 New Zealand employees – or 121 million hours’ work on the minimum wage of $16.50. It equates to $416 for every New Zealander.
ANZ chief executive David Hisco said the result reflected the performance of the economy, credit quality improvements and ANZ’s focus on digital innovation and customer service.
‘‘The continued strength of the economy – strong export and tourism sectors aided by a lower dollar, continued demand for houses and growth in household incomes – has been good for our business,’’ Hisco said.
‘‘The Government’s investment in major infrastructure across the country and trade achievements are providing jobs and fuelling consumer spending and saving. We have also had a significant reduction in provision charges – funds set aside for bad debts – due to credit quality improvements across our retail, commercial and agri businesses.’’
ANZ New Zealand’s revenue rose 3 per cent to $4.18b, comprising net interest income of $3.18b, up 3 per cent, and other operating income of $1b, up 1 per cent.
‘‘It’s hard for people to stick with you when you explain the size of the numbers,’’ Hisco said.
He said the bank made a strong contribution to the economy and government accounts.
It paid about $760m in corporate taxes, or 5 per cent of the corporate tax take for the country, and paid $810m in salaries.
As a group, the bank recorded profit of A$6.49 billion (NZ$7.02b), down from A$6.81b last year.
The growing number of ANZ customers indicated that Kiwis were not uncomfortable with what it was doing, Hisco said.
Hisco earned $4.27 million last year, but did not disclose his salary for this year.
‘‘My salary will be published in the next couple of weeks.’’
He said his pay reflected more than just his role running ANZ in New Zealand. He is also on the group board and runs operations in the Pacific islands.
Banking expert Claire Matthews, of Massey University, said banks achieved such high levels of profit because their expenses were relatively low.
‘‘It’s mostly electronic these days so it’s to do with the nature of the business.’’
She said bank profits would stay strong until an economic downturn increased the number of bad debts on their books.
Sam Stubbs, the founder of KiwiSaver provider Simplicity, said banks were using their dominant market position to extract unreasonable profits.
‘‘It’s one bank, yet its profits are almost twice that of the top seven power companies combined. And it all goes back to Aussie.’’
‘‘It’s hard for people to stick with you when you explain the size of the numbers.’’
ANZ chief executive David Hisco, above