ANZ New Zealand cash profit rises to $1.1 bln in first 9 months as costs trimmed
Aug. 16 (BusinessDesk) – ANZ New Zealand, the nation’s largest lender, lifted its nine-month cash profit by 14 percent by trimming costs and taking a smaller provision for bad debts, making up for a drop in interest income.
Cash profit, which strips out fair value movements in hedging and insurance assets, rose to $1.06 billion in the nine months ended June 30, according to the Australia and New Zealand Banking Group NZ Branch disclosure statement. Net interest income fell 4 percent to $1.96 billion, as interest income declined 1.2 percent and interest expense rose 0.5 percent.
The profit gain reflected “a reduction in provisions for bad and doubtful debts as well as reduced restructuring costs and productivity gains from simplifying the business,” the lender said. That offset “the impact of a decline in net interest margin earlier in the year.”
Restructuring costs fell by $85 million compared to a year earlier as ANZ completed the integration of its core banking system following the merger of its ANZ and National Bank brands. Its credit impairment fell 66 percent to $49 million.
The bank’s commercial division, which includes its Business Banking services to smaller companies, Commercial & Agri unit for larger enterprises and UDC customers, recorded the biggest earnings gain by value in the nine months, rising to $524 million from $448 million.
Retail banking recorded a 2 percent gain to $269 million. The lender’s Wealth unit recorded a 25 percent gain to $55 million while institutional, which provides financial services to major corporations and multi-nationals posted a 5 percent decline in earnings to $232 million.
Statutory profit rose 7 percent to $1.03 billion.
ANZ New Zealand paid $384 million in tax in the first nine months of the year, up from $326 million a year earlier.
ANZ shares last traded at $34.33 on the NZX and have gained about 9 percent this year.