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ANZ NZ 2017 Full-Year Result

26 October 2017

ANZ NZ 2017 Full-Year Result

Australia and New Zealand Banking Group Limited (ANZ) results for the Financial Year to 30 September 2017 were released today. ANZ New Zealand[1] delivered a statutory profit of NZ$1.78 billion, up 15% on the prior financial year. Cash profit[2] was NZ$1.86 billion, up 21%.

ANZ New Zealand Chief Executive Officer David Hisco said the bank’s continued solid performance was due mostly to lending growth and ongoing strong cost management. The result was also buoyed by a lower than normal provision charge, reflecting growth in some parts of the New Zealand economy.

“We have reduced the number of products from almost 350 in 2012 to offer fewer than 90 in 2017, improving staff efficiency and making life simpler for them and our customers,” Mr Hisco said.

“Our expenses decreased 8% in FY17 and are below our 2010 levels, while we’ve maintained high customer satisfaction. That’s a remarkable achievement and reflects our team’s strong discipline, high productivity and our digital push.

“The strength in some parts of the economy also meant fewer bad loans to contend with and a more benign credit environment saw the provision charge trend lower.”

FY17 revenue increased 7% to NZ$4.08 billion comprised of net interest income of NZ$3.08 billion up 2% and other operating income of NZ$999 million up 26%, reflecting higher markets trading income and valuation gains on derivatives predominantly in the first half.

Net interest margin stabilised in the second half of FY17 after a period of contraction caused by increased funding costs and a customer preference for fixed rate home loans.

One of the highlights of the year was customer deposits increasing 6%. Another was KiwiSaver, with almost 735,000 New Zealanders investing over NZ$11 billion of their retirement savings in an ANZ KiwiSaver scheme.

“Our results reflect our number one market position in home loans, deposits, credit cards and KiwiSaver. One in two New Zealanders have a financial relationship with us and we’re proud of the role we play in the community.”

Mr Hisco said he was particularly proud of the time staff volunteered in the community in FY17 (up 14% to 18,440 hours), the NZ$658,528 in community donations via the ANZ Staff Foundation and the almost NZ$1 million raised for Daffodil Day[3]. More than 650 people in vulnerable communities completed the bank’s financial literacy programme MoneyMinded. ANZ New Zealand’s carbon footprint reduced by 6%.

Key Points
All comparisons are Financial Year 30 September 2017 compared to Financial Year 30 September 2016 unless otherwise noted
• Statutory profit up 15% at NZ$1.78 billion.

• Cash profit up 21% at NZ$1.86 billion.

• Revenue up 7% at NZ$4.08 billion.

• Expenses decreased 8% (or 2% adjusting for charges associated with a change to the application of ANZ’s software capitalisation policy in FY16), reflecting ongoing disciplined cost management and productivity gains. Now below FY10 levels.

• Lower levels of credit losses reflect improvements in credit quality in the Retail, and Commercial and Agri portfolios, partially offset by new provisions.

• Customer deposits up 6% and gross lending up 4%.

ANZ New Zealand continued to be a technology-driven organisation, constantly looking at ways to innovate and meet customers’ needs.

“ANZ was the first bank in New Zealand to offer Apple Pay and in one year almost half of eligible[4] customers have set it up, which is an impressive uptake of a new technology. We’ve also made banking on the go faster and easier on our ANZ goMoney app.

“We’re focused on technology with a ‘human touch’ because our customers tell us they still want to have key financial conversations directly with our staff.”

FY17 was a record year for ANZ New Zealand’s contribution to the economy.

We paid around:

• NZ$680 million in corporate taxes (more than 5% of New Zealand’s total corporate tax take);

• NZ$800 million in staff wages and salaries;

• NZ$545 million to local contractors and suppliers;

• NZ$13 million in sponsorships and charitable donations; and

• NZ$70 million in dividends to about 17,500 New Zealand shareholders and managed funds.

A video of David Hisco discussing highlights can be found here.

[1] 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.

[2] 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. Refer to Summary of Key Financial Information for details of reconciling items between cash profit and statutory profit.

[3] Daffodil Day is the Cancer Society’s annual fundraiser.
[4] ANZ retail customer with an ANZ Visa Debit or personal ANZ Visa credit card and an Apple Pay compatible iPhone.
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