ANZ half-year profits down; interim dividend cut

Higher operating expenses and impairment charges hit ANZ New Zealand's profit for the six months ending March 31, despite interest income rising 5% in the period.

The country's largest bank reported an operating profit of $1.08billion for the six months, down 9% on the $1.2billion reported in the previous corresponding period (pcp).

Operating income was down 2% to nearly $1.9billion but expenses rose 10% to $815million from $739million in the pcp. Credit impairment charges rose to $50million from $31million in March last year and $45million in September last year.

The bank's cash profit of $751million was 11% down on the $841million from the pcp and the statutory profit was down 13% to $763million from $877million.

The Australian-listed parent ANZ Bank cut its interim dividend, as half-year profits dropped sharply, as it took $A717million ($NZ782million) in a range of charges that it said would put the bank in a stronger position in the future.

The bank said it would pay an interim dividend of A80c a share, down from A86c last year, and it would target a lower dividend payout ratio.

Its cash profit fell 24% to $A2.8billion, including $A717million in charges, or specified items, which it said were aimed to ‘‘reposition the group for stronger profit before provisions growth in the future''.

ANZ New Zealand chief executive David Hisco said the March 2016 New Zealand result included an $87million charge associated with an accounting change to the application of the group's software capitalisation policy.

Net interest income rose mainly through continued lending growth while interest margins contracted due to strong lending competition and a customer preference for fixed rate mortgages.

In other operating income, the first half last year reflected a strong performance in the markets business compared with a difficult trading period in the latest half, he said.

‘‘We have maintained our momentum in a highly competitive market and are building a stronger, more efficient business while delivering on our vision to help Kiwis get ahead.''

ANZ NZ had continued to grow lending and deposits and had increased its market share across key products, including home loans and household deposits, Mr Hisco said.

ANZ NZ was evolving as customers changed the way they did their banking. The bank was the largest supplier of capital to the economy, from individuals and small firms to farmers and large institutional clients.

●On Monday, Westpac New Zealand reported a profit of $483million for the six months ended March, up on the previous period.

 


At a glance

•Cash profit of $751million, down 11%.

 

•Statutory profit of $763million, down 13%.

•Lending up 8% and customer deposits rise 12%.

•Parent ANZ Bank cuts dividend as profits slump.

 


 

 

 

 

 

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