ANZ New Zealand, owner of both the ANZ and National banks and the country's biggest bank, has posted both record annual net profit after tax and record annual underlying profit, helped by a big fall in provisions for bad and doubtful debts.
ANZ said today statutory profit, or net profit after tax, rose NZ$218 million, or 25%, year-on-year to NZ$1.085 billion for the 12 months to September 30 and underlying profit, which excludes non-cash and significant items, jumped NZ$361 million, or 41%, to NZ$1.243 billion.
ANZ NZ CEO David Hisco said the profit growth reflected the "slow improvement" of the New Zealand economy and was "substantially driven" by a significant fall in provisions for bad and doubtful debts, with this tumbling 59% to NZ$187 million. Margin growth also helped. ANZ's net interest margins rose 11 basis points over the course of the year to 2.38% and were up 5 basis points to 2.40% in the second half-year.
Annual net interest income climbed 4% to NZ$2.598 billion.
Both the net profit and underlying profit figures beat the bank's previous record annual figures of NZ$1.039 billion and NZ$975 million, respectively, which ANZ recorded in the boom year to June 2007.
This year's profit rise was helped by a 6% rise in operating income to NZ$3.435 billion and a 3% fall in operating expenses to NZ$1.498 billion. The fall in costs came despite the NZ$111 million, after tax, cost of shifting both ANZ and National Bank staff onto one core banking system. This project is expected to be completed, with migration to the single platform, in late 2012. Meanwhile, ANZ's staff numbers fell by 142 to 9,270 over the course of the year.
The profit rise came as net loans and advances contracted 3% to NZ$93.613 billion. Customer deposits rose 4% to NZ$61.994 billion.
"The New Zealand economy has continued to re-balance with households and businesses repaying debt and strengthening their financial position,"Hisco said. "Strong financial discipline, including tight management of costs and risk, has played an important part in ensuring our financial performance has held up well despite the moderating effect of this de-leveraging on revenue growth."
ANZ, which also owns fund manager OnePath and finance company UDC Finance, paid NZ$507 million in income tax.
ANZ's major rivals have also had a strong year. Westpac New Zealand yesterday posted a 41% rise in annual cash earnings to NZ$454 million. BNZ last week reported a NZ$69 million, or 11.5%, rise in annual net profit after tax to NZ$671 million and an NZ$88 million, or 17%, rise in cash earnings to NZ$612 million.
And in August ASB, which has a June balance date, also posted record annual net profit of NZ$568 million and a 42% rise in cash earnings to NZ$504 million.
Meanwhile, ANZ said its net impaired assets fell 11% to NZ$1.307 billion with these as a percentage of net advances dropping to 1.40% from 1.52%.
For the second half of its 2011 year versus the first half, ANZ recorded a 3% rise in operating income, 3% fall in operating expenses, 5% rise in underlying profit and 27% jump in statutory profit to NZ$607 million. However, the bank's second half provision for credit impairment rose 20% to NZ$102 million.
Australian parent ANZ Banking Group posted a 12% rise in underlying profit to A$5.65 billion and a 19% rise in statutory profit to A$5.35 billion. It'll pay an A76 cents per share final dividend bringing annual dividends to A$1.40, up 11%.
See the ANZ Group's full results announcement here.
(Update adds further details & attachment).
23 Comments
It was not just due to the bubble...this stupidity is the result of determined RBNZ policy choices over many years. It can be best seen in the 'hands off' approach Bollard has to the lending out of nearly 100% of valuations on property.... coupled with his near ZIRP stance.
The entire economy is tottering along on credit to such an extent that when the cost of that credit shoots higher by just 1%.....the house of crap will fall down. Just 1%!
It's all so easy when the RBNZ anchors the OCR @ 2.5%.
Borrow short, lend long.
Current A/C deficit will blow out ,as predicted, as profits are repatriated to Aussie.
We are suckers for wealth transfer mechanics- aided and abetted by our so called government owned central bank, socialising the profits for foreign entities at our expense - can we invoke a claim for treason?
The coments on this WSJ blog sum up my sentiments re zirp.
Ripping off the helpless elderly to enrich bankers is not public poilcy, just hucksters at play. I am sure there are those who would applaud the transfer of wealth from the sponging elderly cohort, but unfortunately it leaves them with less to help their young and themselves.
I have no wish or capacity to support either generation.
from that link
- Lee Adler / The Wall Street Examiner wrote:
Structural employment IS what we have. All those jobs created in the bubble were fake jobs. Fake construction jobs, fake real estate sales jobs, fake mortgage broker and processor jobs, fake Wall Street shill jobs. All fake. What we have now is real, structural unemployment. A bunch of unemployable people with no skills, other than shuckin and jivin for the Fed’s next bubble. The one that’s not coming.
We need to get back to basics. Raise interest rates. Give people a fair return on the money, Make investments in rational businesses with real returns. That will never happen as long as the Fed keeps this confiscatory ZIRP in place. It’s criminal. Doesn’t anyone get that?
FYI some comment from the Greens:
Record profits posted by ANZ bank today highlight the on-going weakness of having 95 percent of our banking industry owned by Australians, said Green Party Co-leader Dr Russel Norman today.
Dr Norman was responding to the strong full-year profits posted by Australian-owned banks over the last week. ANZ New Zealand announced a 55 percent increase in after-tax profits to $904 million today.
“Over the last five years, the big four Australian-owned banks have sent $8.9 billion out of the country in the form of dividend payments to their parent banks,” said Dr Norman.
Dr Norman was quoting dividend data provided by the Minister of Finance in a response to parliamentary written questions.
“The big four Australian banks are strip mining our national economy of capital,” Dr Norman said.
“This capital out-flow is unsustainable and highlights the urgent need for greater local ownership of our banks.
“Only one bank — Kiwibank — approaches anything like a suitable rival to the big four Australian banks, but it controls just 2.5 percent of New Zealand’s total banking assets.
“The Green Party would invest further into Kiwibank to bring it up to the point where it can compete effectively with the big four Australian-owned banks,” said Dr Norman.
“Unfortunately, foreign ownership doesn’t trouble this Government. Their plans for our energy sector are heading in the same direction as our banking sector.
“Besides electing a new Government, the only thing New Zealanders can do about our dire banking situation is switch to New Zealand-owned banks, building societies, and credit unions.”
sheesh Bernard ..! Russel's not gonna like you giving that comment o the day....even though it is....ha.....how are you gonna get him on the chair when he hit's the big 6.6%...uh when he's a mover shaker...eh...
Be kind on the way up and hope they'll be kind on the way down.
good on ya mate.
The ANZ banks response to Dr Russel Normans comments have left many in the political quarter confused.....as follows
Dear Dr Norman thank you for sharing your insight in regard to what you percieve as the imbalance of Banking interests in New Zealand currently.
We are presently suffering from an affliction of the middle finger and wondered if we extended it to you via video conference... if you would be good enough to take a good long look at it and share any further thoughts you may have on the matter.
We live in your World
ANZ.
Fond memories of the ANZ/ING Frozen Fund debacle come to mind. The fact that ANZ were not prepared to honour their safe investments and leave small time ma & pa investors with no savings.
No doubt ANZ well be trying to pay as little tax as possible.
Why do banks have such a privledged postion and end up owning peoples lives?
Read this very carefully: "substantially driven" by a significant fall in provisions for bad and doubtful debts, with this tumbling 59% to NZ$187 million.
Simply put provisions are self insurance, reducing this to boost the share price, so you can get a PHAT bonus is not that smart. I might change banks.
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