By Gareth Vaughan
The country's biggest bank has recorded a 7% rise in June quarter profit and an increase of just 3% in the low equity portion of its residential mortgage book against a backdrop of possible temporary Reserve Bank restrictions on such loans.
ANZ NZ's latest General Disclosure Statement (GDS) shows the bank grew residential mortgage lending in the June quarter by $903 million, or 1.6%, to $55.701 billion.
ANZ's home loans with loan-to-value ratios (LVRs) above 80% rose $29 million to $13.248 billion. The growth came in the 80% to 90% range, up $276 million to $8.582 billion. Loans with LVRs over 90% fell $247 million to $4.666 billion. Growth in loans with LVRs below 80% was $874 million, or 97%, of the overall quarterly increase.
This left the overall percentage of ANZ's home loan book, by value, at LVRs above 80% down slightly to 23.78% from 24.12% at March 31. During the March quarter 30% of ANZ's home loan growth came from high LVR loans, versus the 3% in the June quarter.
Meanwhile, ANZ's net profit after tax for the three months to June 30 rose $25 million to $375 million from $350 million in the same period last year. The rise came as operating expenses were cut $23 million, or 6%, to $382 million, and as loan impairments dropped by $43 million to just $5 million.
ANZ's net interest income dropped $15 million, or 2%, to $655 million, but its total operating income was up $20 million, or 2%, to $941 million.
Dividend unchanged at $600 mln
ANZ says it'll pay an ordinary dividend of $600 million by September 30, which is unchanged from last year. The bank is also issuing $300 million of preference shares to its immediate parent, ANZ Holdings NZ. The shares will qualify as additional tier one capital for capital adequacy regulations.
For the nine months to June 30, ANZ's net profit after tax rose $65 million, or 7%, to $1.030 billion.
In a statement accompanying the release of its GDS ANZ highlighted "significant cost reductions," including an $85 million drop in restructuring costs as work on integrating the ANZ and National Bank core banking systems winds down, and productivity gains from "simplifying" its operations. The bank attributed lower credit impairment provision charges to a continued improvement in credit quality.
"The successful merger of the ANZ and National Bank brands has enabled the business to continue growing deposits and lending, including above-market growth in the key markets of mortgages and credit cards," ANZ said.
The nine month results suggest ANZ's well on track for its third straight record annual profit, topping last year's September year net profit after tax of $1.265 billion.
For the June quarter gross loans were up 1%, or $1.129 billion, to $99.692 billion. Total deposits increased 1%, or $802 million, to $76.026 billion.
Meanwhile, impaired assets fell $173 million, or 14%, to $1.063 billion, but assets at least 90-days past due rose $31 million, or 13.5%, to $261 million.
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