Lending at ANZ, the country's biggest bank, shrinks in the March quarter

By Gareth Vaughan

Lending at ANZ NZ, the country's biggest bank, dropped in terms of both gross and net loans in the first three months of 2011 as the major banks continue to struggle to grow their overall lending books.

ANZ's NZ Branch General Disclosure Statement (GDS), for the six months to March shows gross loans and advances in the three months to March 31 down NZ$364 million to NZ$96.695 billion from NZ$97.059 billion at December 31 last year. Total net loans and advances fell NZ$315 million to NZ$95.395 billion.

With ANZ the last of the big four Australian owned banks to release its March quarter GDS, the disclosure statements show BNZ was the only one of them to grow overall lending in the three month period, by NZ$523 million. 

ASB's fell NZ$179 million and Westpac's dropped by NZ$82 million. When ANZ, BNZ and Westpac recently reported their half-year results all three were at pains to emphasize they were open for business and willing to lend. However, lending growth has remained stubbornly weak with individuals, and especially businesses, cautious about taking on fresh debt. See Gareth Vaughan's opinion piece: Desperation creeps in as banks plead for the punters to borrow again.

Like all three of its major rivals ANZ did, however, grow home loans during the quarter. ANZ's housing term loans rose by NZ$134 million to NZ$54.032 billion. That was slower growth than the NZ$311 million achieved by BNZ and NZ$244.7 million at Kiwibank, and Westpac's NZ$170 million growth. It was, however, ahead of ASB's NZ$48 million mortgage book growth.

Dividend drops, profit rises

ANZ paid its Australian parent a NZ$215 million dividend in the six months to March compared with NZ$393 million in the same period of the previous year. That takes total dividends from ANZ, ASB and BNZ for the period to NZ$583 million, down NZ$260 million on NZ$843 million in the same period of the previous year. Westpac, which is preserving capital as it transfers some banking operations to Westpac NZ from its Australian parent, paid no dividend in either period.

Profit for the three months to March jumped by NZ$85 million, or 64%, to NZ$218 million at ANZ as the bank's provision for credit impairment fell NZ$122 million to just NZ$51 million, and net interest income climbed NZ$62 million, or 11%, to NZ$637 million.  Operating income rose NZ$112 million, or 15 %, to NZ$836 million, less than half the 32% jump in operating expenses, which rose by NZ$119 million to NZ$492 million.

Operating expenses include a one-off cost for the six months to March of NZ$141 million stemming from putting the ANZ and National Banks onto one IT platform and restructuring management.

Total assets rose NZ$518 million to NZ$125.059 billion and total liabilities by NZ$558 million to NZ$117.095 billion. Term deposits fell NZ$469 million to NZ$35.678 billion.

ANZ's total impaired assets rose NZ$89 million to NZ$2.127 billion but 90 day past due assets fell NZ$7 million to NZ$335 million.

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