ANZ’s ‘cash’ profit of $2.29 billion up 1% on last year

Friday, 8 November 2024

ANZ banks is the third big bank to reveal its profit this year, following Westpac and BNZ.

ANZ has reported an after-tax “cash” profit of $2.29 billion, up 1% on the previous year.

However, once paper losses on its interest rate and currency hedges were factored in, the bank’s statutory profit was down 2% at $2.1b for the 12 months to the end of September.

Chief executive Antonia Watson used the same word to describe the bank’s profit as BNZ’s Dan Huggins did for his organisation on Thursday.

“It was a solid result in a tough year for the New Zealand economy,” she said.

“Banks are a reflection of the economies they operate in. Like many of our customers, our costs grew faster than our income in the year.”

Watson said that while the results of stubborn inflation, the official cash rate being at restrictive levels and a lack of economic growth were still feeding through the system, “we’re starting to see a brighter picture emerge”..”

“As interest rates come down, inflation is controlled and businesses feel more confident, there is a sense of cautious optimism surrounding New Zealand’s economic future.”

Watson, who last month defended ANZ’s profits at a hearing of Parliament’s banking inquiry, said revenue for the year was up 1%.

However, the bank’s disclosure statement showed it collected $1.7 billion more in interest from households and businesses than it had in the previous year.

But it also paid much more interest to depositors and other funders - $7.5b compared with $5.9b the previous year.

The bank’s margins fell during the past 12 months.

ANZ chief executive Antonia Watson tells MPs on the Finance and Expenditure select committee that the bank did not make excess profits.

As with Huggins, Watson’s statement to shareholders made nods to Parliament’s banking inquiry.

MPs have become concerned that banks are less willing than they used to be to lend to farmers, preferring to sink their money into urban home loans.

MPs have grown suspicious that the rural sector is not a place where big banks are keen to expand their lending.

“ANZ NZ remains the country’s largest lender to the agricultural sector, with total lending of $15.4b,” she said.

“With 51% of our capital invested in New Zealand’s farms and businesses we remain committed to supporting economic growth and a prosperous future.”

However, ANZ’s disclosure statement showed its agri lending had declined in the past year from $16.4b to $16.3b.

ANZ grew its home loan book of loans from $107b to $110.8b.

More to come