ANZ New Zealand builds strength and efficiency

Tuesday, 3 May 2016, 10:59 am
Press Release: ANZ Bank

3 May 2016
ANZ New Zealand builds strength, efficiency in competitive market

Australia and New Zealand Banking Group Limited (ANZ) 2016 half year results were released today, with ANZ New Zealand ANZ New Zealand represents all of ANZ’s operations in New Zealand, including ANZ Bank New Zealand Limited, its parent company ANZ Holdings (New Zealand) Limited and the New Zealand branch of ANZ. delivering unaudited cash profit Statutory profit has been adjusted to exclude non-core items to arrive at cash profit, the result for the ongoing business activities of ANZ New Zealand. All comparisons in Key Points are on a cash profit basis unless otherwise stated. Refer to Summary of Key Financial Information for details of reconciling items between cash profit and statutory profit. of NZ$751 million, down 11%, and unaudited statutory profit of NZ$763 million, down 13% on the corresponding half in the 2015 financial year.

The March 2016 half includes a NZ$87 million charge associated with an accounting change to the application of the Group’s software capitalisation policy By lifting the software capitalisation threshold and directly expensing more project related costs, ANZ has introduced a greater level of discipline into the management of software costs. The change, effective from 1 October 2015, does not impact the Group’s total spend on technology but better aligns the application of ANZ’s policy with the rapidly changing technology landscape, increased pace of innovation in financial services and the Group’s own evolving digital strategy. These changes bring forward the recognition of software expense resulting in lower amortisation charges in future years.. Adjusted pro forma cash profit Pro forma refers to Cash Profit adjusted to remove the impact of ‘Specified items’ including the impact of software capitalisation policy changes, Asia Partnership impairment charge (AMMB) and gain of cessation of equity accounting (Bank of Tianjin), restructuring expenses, sale of Esanda Dealer Finance business, and FX adjustments to comparative periods to remove the impact of foreign currency translation. Further detail provided in the ANZ Half Year 2016 consolidated Financial Report page 14., excluding this charge, was down by 3%.

Net interest income rose by 5% compared with the March 2015 half, primarily reflecting continued lending growth, while interest margins have 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 this half.

ANZ New Zealand Chief Executive Officer David Hisco 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 in their lives.

Key points (All comparisons are with six months ended 31 March 2015 unless otherwise noted2)
Unaudited cash profit of NZ$751 million, down 11%.
Unaudited statutory profit of NZ$763 million, down 13%.
Operating expenses increased by 10% due to the software capitalisation change3. Excluding this change, expenses were down 1% due to disciplined cost management and productivity gains.
Lending up 8% and customer deposits up 12%.
Provision charge of $50 million reflects portfolio growth along with a reduced level of write-backs.

“We are doing this by offering unrivalled connections across the region and the best combination of convenience, service and price. Our ongoing focus on simplification is improving efficiency for staff and making banking easier for our customers,” Mr Hisco said.

ends

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