ANZ Bank lifts NZ earnings as mortgage lending rises

AUCKLAND: ANZ Bank New Zealand, the local unit of Australia & New Zealand Banking Group, lifted firsthalf earnings 1% as mortgage lending continued to grow.

Cash profit, the preferred earnings measure for the Australianowned banks, rose to $941 million in the six months ended March 31 from $928 million a year earlier, the Aucklandbased lender said in a statement. Statutory profit rose 14% to $869 million, as revenue rose 3% to $2.1 billion. The New Zealand banking business posted an 11% gain in earnings to $793 million, while the institutional business saw earnings fall 38% to $122 million.

Duallisted parent Australia & New Zealand Banking Group reported that it posted a cash profit of A$3.5 billion ($NZ3.75 billion), up 4%, and a 14% lift in statutory profit to A$3.3 billion, on a 2% drop in revenue to A$9.8 billion. The board declared a fullyfranked interim dividend of 80 Australian cents per share, unchanged from a year earlier.

In the first half, ANZ’s New Zealand banking division expanded its loan book 3% to $118.5 billion, with mortgage lending up 5% to $73.7 billion, and commercial lending up 3% to $41.5 billion. Customer deposits increased 4% to $84.4 billion, and net interest margin rose 10 basis points to 2.37% due to higher lending margins.

‘‘ANZ has grown in home lending and deposits, which reflects the continuing strength of the New Zealand housing market and of the economy generally,’’ said ANZ New Zealand chief executive David Hisco. ‘‘Major infrastructure and building projects across the country are providing jobs and fuelling consumer spending and saving, and will do so for the foreseeable future.’’

Operating expenses rose 1% to $642 million in the first half.

ANZ New Zealand said this was due to increased spending on digital capability and inflation, but was partially offset by a 2% reduction in fulltime equivalent staff to 6319, which was ‘‘driven by customer migration to lower cost channels’’. Now, 1.4 million of its local customers were using online banking.

The bank has slashed its total FTE workforce worldwide by 5% to 41,580 in the past 12 months.

Net funds management and insurance income rose 3% to $189 million in the first half, which the bank said was due to higher funds under management.

As at the March 31 balance date, the bank had $29.2 billion, up 8% from the same time a year ago.

Group chief executive Shayne Elliott warned the bank expects difficult trading conditions in Australia to continue for the foreseeable future, and expects revenue growth for the second half of 2018 to continue to be constrained by intense competition as well as the impact of increased regulation.

In Australia, the bank expects economic growth to pick up in the coming year but ‘‘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‘‘, Elliott said.

Additionally, the bank is now part of the royal commission into financial services in Australia which has become a scandal as unethical behaviour across the industry has been revealed. Elliott said the bank ‘‘will learn from this inquiry and continue to take real action to restore trust within the community.’’ — BusinessDesk