ANZ New Zealand 1Q profit sinks 25% as margins soften
ANZ New Zealand 1Q profits sinks 25% as margins soften
Feb. 15 (BusinessDesk) - ANZ New Zealand, the country's biggest lender, reported a 25 percent fall in first-quarter profit as the local unit of Australia & New Zealand Banking Group recorded softer margins, even as it grabbed more market share.
Net profit dropped to $300 million in the three months ended Dec. 31, from $400 million a year earlier, according to ANZ New Zealand's general disclosure statement. Net interest income fell 2.5 percent to $651 million, and other operating revenue more than halved to $93 million. The Australian parent's cash profit rose 6.2 percent to A$1.53 billion from a year earlier.
The bank is underway with the biggest change on the New Zealand lending scene since ANZ Bank bought National Bank from Lloyds TSB in 2003 for $5.7 billion. It will scrap the National Bank brand, shrinking the group’s network of branches and cutting out duplication ahead of relinquishing the rights to use the Lloyds black horse logo in 2014.
"While the revenue environment remains subdued, the simplification programme is delivering productivity benefits including reductions in technology operating costs," ANZ said in a trading update. "As expected, margins have declined from their 2012 peak impacted in part by a short-term tactical campaign during December."
ANZ New Zealand lifted home loans to $47.6 billion as at Dec. 31 from $46.12 billion three months earlier, and net loans advanced to $88.23 billion from $86.78 billion. Term deposits slipped to $33.55 billion as at Dec. 31 from $33.92 billion at the end of September.
The New Zealand branch of the Australian parent reported a 29 percent drop in first-quarter profit to $215 million, with a 3.4 percent fall in net interest income to $615 million. The branch's home loans were $56.19 billion as at Dec. 31, with $96.82 billion in net loans, while term deposits were at $33.55 billion.
ANZ's shares were unchanged at $34.38 on the NZX.