ANZ's earnings impressed, with all business units firing,
driving a big increase in shareholder returns, Morningstar
analyst David Ellis said yesterday.
The result exceeded market and Morningstar expectations, with
impressive performances from both domestic and international
The bank, which operates in New Zealand, reported an
operating profit of $A10.1 billion ($NZ11.6 billion), up 9%,
for the year ended September.
The cash profit was up 11% to $A6.5 billion, the reported
profit was up 11% to A6.3 billion and earnings per share were
up 9% to $A2.38.
A final dividend of tax-paid A91c, up 15%, was proposed,
taking the total dividend to $A1.64.
ANZ chief executive Mike Smith said the strong performance
was the result of a long-term strategy focused on growth in
domestic franchises and targeted expansion in Asia.
''In 2013, we have continued to attract more customers, with
further market share gains in Australian retail and
commercial. In New Zealand, brand consideration is at a
historic high and we are growing market share in home loans
and small business banking,'' he said.
Mr Ellis said the high quality performance underpinned his
positive investment view for the ''wide moat'', or
competitively advantaged, major banks.
''Importantly, asset quality is still improving, boding well
for future earnings growth. Strong core profitability was
driven by moderate revenue growth and a decline in operating
expenses, producing an impressive improvement in the cost to
Lower bad debts, down 5%, contributed to the strong increase
in bottom-line earnings, he said.
The only negative was the expected fall in net interest
margins due primarily to business mix changes in the Asian
The result was hard to fault, with particularly strong
performances from the Australian and New Zealand operations,
Mr Ellis said.
ANZ New Zealand chief executive David Hisco said the New
Zealand arm of the bank reported a cash profit of $1.44
billion for the period, up from $1.29 billion in the previous
Productivity and credit quality improvements were key
features of the result, with expenses down 14% and provision
charges falling 66%.
''Twelve months after we created the new ANZ, our customers
are already enjoying much better products and services.''
Since ANZ began simplifying the business, it had increased
bank coverage from 75% to 82%, including a presence in eight
more communities across New Zealand, while reducing branch
costs, he said.