ANZ: buoyant NZ profit the sign local economy is ‘turning the corner’

Monday, 10 November 2025

ANZ New Zealand has reported an after-tax profit of $2.5 billion in the 12 months to the end of September, up more than 20% on the previous year.

The after-tax profit compared with a $2.1b after-tax profit last year for the bank, which is owned by the Australian ASX sharemarket-listed ANZ Group. The profit was decried by the likes of the Banking Reform Coalition.

However, ANZ New Zealand’s chief executive Antonia Watson said once gains on economic hedges, and a large injection of capital from shareholders was taken into account, the bank had only grown profit by the same percentage as its balance sheet had grown.

The whole trans-Tasman ANZ Group reported an after-tax profit drop of 10%, blaming the costs of a settlement with Australian regulator ASIC over a government debt scandal, and restructuring costs as it cut jobs in Australia.

The ANZ New Zealand result was swelled by $163 million increases in the value of interest and currency hedges, but even when those were stripped out, the bank’s New Zealand cash profit after tax was $2.37b up from an equivalent figure of $2.29b in the previous year.

Watson said the bank’s profit increase was a sign New Zealand’s economy was “turning the corner”.

She said banks were a “reflection of economies”, and said New Zealand’s had taken longer to recover than hoped.

Kent Duston of the Banking Reform Coalition, said: “ANZ increasing its profit by 21% in the depths of the worst recession in a generation is unconscionable.

“Chief executive Antonia Watson’s idea that the increased ANZ profit somehow represents the country’s economy turning a corner is practically Orwellian.”

“In case she hadn’t noticed, business liquidations are up by more than 1000% from a few years ago, mortgagee sales are continuing to accelerate, and one in eight Auckland shops is apparently empty.”

“So for ANZ to put the boot into average Kiwis this way is reprehensible.

“ANZ may have increased its profits by 21%, but it hasn’t done so by getting 21% more customers, or by launching 21% more innovative products, or by improving its customer service by 21%. It’s simply stuck its hand into New Zealanders pockets more aggressively and more ruthlessly than in the preceding 12 months”, Duston said.

Watson denied the bank had made an excess profit.

“If you look through those hedges we've grown our cash profit by 4%, which is the same amount as we've grown our balance sheet,” she said.

“If you're a supermarket and you sell more stuff, you'll make more money from it, all other things being equal. So, we've grown our book. We've also had an improved result on credit provisioning.”

ANZ’s disclosure statement showed total shareholders’ equity had increased from $18.8b to $19.9b during the year, including as a result of the bank having to inject $1.2b of capital as a result of Reserve Bank Te Pūtea Matua requirements.

“We're probably the biggest importer of foreign direct investment into New Zealand with that $20b of capital,” Watson said. “And we need to be able to give those shareholders a fair return on it or they might choose to put their capital somewhere else.”

Last week Westpac posted a 13% profit rise, while BNZ announced a modest 0.5% drop in profit.

Profit season at ANZ, Westpac and BNZ comes against the backdrop of a weak economy and high unemployment, but the three banks expect to see an improvement before next year’s general election, which must be held by late December.

After Westpac posted its 13% profit increase, New Zealand First MP David Wilson called out banks for their high profitability in a speech Parliament, saying it came as many households were struggling.

Kiwibank and ASB have financial years ending in June.

Duston said the profit showed why New Zealand needed a windfall tax on what he called “increasingly parasitic operators”.

According to Duston, if the margins of ANZ New Zealand were the same as the margins of ANZ Australian, its mortgages would be 100 basis points lower, and its term deposits would pay 50 basis points more.

Watson said: “Confidence is returning, particularly in regional areas. However, Auckland and Wellington, because of the mix of their economies, will take longer to feel the improvement.”

She said households and businesses were strengthening their balance sheets, house prices were stabilising, and interest rates were significantly lower, setting the stage for a cyclical recovery.

“If we don’t have any significant events, we expect the economy - driven by rural New Zealand - to be heading back to pre-Covid levels late in 2026, with the uplift when it comes likely to be broad-based,” she said.

Businesses and homeowners had used the period of lower interest rates to reduce their debts.

Watson said more than 40% of home loan customers were now ahead on payments by six months or more, and over 45% had savings buffers of $5000 or more.

Farms in strong agricultural sectors were also paying down debt.

ANZ increased lending to small and medium-sized businesses by 4% and increased margins on home loans.

ANZ faces a multi-million dollar class action civil trial early next year after an attempt by the Government to pass a retrospective law change that would have been likely to soften any award made against the bank was defeated when NZ First decided not to back it.