ANZ 4 month profit hits $1.6bn, up 16%
Australia and New Zealand Banking Group Limited (ANZ) this morning reported a 16% jump in post-tax profit for the six months to 31 January of around $1.6 billion, 16% higher than the previous corresponding period. At the same time the New Zealand stock exchange said that the bank there had requested a trading halt pending a material announcement.
In its trading update, the bank said that looking ahead, the ‘new normal’ would be lower economic growth compared to the last 10 years.
ANZ CEO Mike Smith said the outlook for the economies of Australia, New Zealand and Asia is significantly more positive than at the same point in 2009.
”The improved conditions are reflected in a more positive outlook for provisions,” Mr Smith said.
“The economic cycle is unfolding much as we anticipated although the resilience of the economy in Australia now means that we are unlikely to see the stress that might originally have been expected in the consumer portfolio.”
Mr Smith did however say that it was right to be cautious, saying that the problems with European sovereign debt showed volatility was still present in the market
Turning to the current results ANZ said the growth in underlying post-tax profit came from higher earnings in core business and lower provisions despite softer Global Markets income and the deleterious effects of a stronger Australian.
Meanwhile, credit provisions, the banks provisions for bad loans, was down 9% on the previous corresponding period, and 35% below the FY09 average, the bank said.
”A small number of existing large exposures are continuing to be monitored where additional provisioning may be required,” the bank cautioned.
Overall, the provision charge for the full year was currently expected to be modestly higher than that implied by the first 4 months total of $0.67 billion.
The proforma Tier One ratio at 31 January 2010 was 10.4% with a core Tier One ratio of around 8.3%.
Elsewhere, group lending growth was slightly up, with growth in mortgages and credit cards offset by lower demand in corporate and institutional and the continued repositioning of the institutional book.
At the close Thursday, ANZ shares were trading at $22.25.
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