ANZ NZ December quarter profit rises 33% to $393 mln

ANZ New Zealand has posted a 33% rise in unaudited first quarter profit as expenses fell, income rose and the bank recorded a write back, rather than a provision, for credit impairment.

The bank says profit after tax for the three months to December 31, 2013 rose $$97 million, or 33%, to $393 million from $296 million in the same period of the previous year.

In a statement ANZ attributed its rising profit to "gathering economic improvement," increased lending, lower provisions for bad debts, plus reduced costs and productivity gains from its simplification programme, which included putting the ANZ and National banks on one IT platform in late 2012, phasing out the National Bank brand, and reducing the number of products offered to customers.

"The successful merger of the ANZ and National Bank brands and technology systems has enabled the business to continue growing deposits and lending, including market share growth in mortgages," ANZ said.

December quarter net interest income rose $33 million, or 5%, to $688 million. Total operating income was up $49 million, or 6%, to $896 million.

Operating expenses were cut $26 million, or 7%, to $372 million. And the bank booked a write back of $19 million versus a credit impairment of $44 million in the December quarter of 2012.

Mortgage growth strong

Residential mortgage lending increased by just under $1.3 billion, or 2.3%, to almost $57.9 billion. Lending where borrowers had a deposit of less than 20% fell $380 million, or 2.8%, to just under $13.1 billion, representing 22.6% of ANZ's total home loan book. At nearly $1.3 billion,

ANZ's December quarter volume growth was more than double that of its nearest rival, which was Westpac's $477 million.

ANZ grew gross loans by $1.4 billion, or 1.4%, in the three months to December 31 to $102.25 billion. Term deposits rose $392 million, or 1.2%, to $34.254 billion. Total deposits and other borrowings, including UDC Finance's debenture stock and commercial paper, rose $3.4 billion, or 4%, to almost $81.1 billion.

The bank said its cash profit surged $101 million, or 32%, to $416 million. Cash profit excludes what the bank terms non-core items and tends to be the major Australasian banks' preferred measure of profitability. However, the way cash profit is reported has come under fire from some banking analysts.

Here's ANZ's full release.