ANZ posts increase in annual profits but says it expired in home loans

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A man talks on the phone outside an ANZ banking tower in central Sydney, Australia on February 20, 2018. REUTERS / Daniel Munoz

  • Shows 65% jump in cash profits to A $ 6.2 billion
  • ANZ Australian mortgage volumes fell 1% in the second half of the year
  • Bank prioritized resolving mortgage volume issue

SYDNEY, Oct.28 (Reuters) – The annual profit of the Australian and New Zealand banking group (ANZ.AX) jumped 65% as it released earmarked funds to cover potential bad loans, but it acknowledged that he hadn’t done enough to capitalize on a pandemic. induced boom in mortgage lending.

The bank’s home loan volumes in Australia fell 1% in the second half of the year to A $ 278 billion, despite a 20% increase in house prices nationwide due to an unprecedented amount of budget spending .

“We started the year really well in the home loan business and then of course we saw incredible volume levels in the economy in terms of turnover, people buying and selling homes. Now we haven’t prepared well and it’s my turn, ”said general manager Shayne Elliott.

Since 2019, Australia’s mortgage market share from the country’s fourth-largest lender has fallen 70 basis points to 13.9% in August, to the benefit of its biggest rivals.

ANZ has hired people to tackle loan processing times issues and Elliott said the book is expected to grow in line with its larger peers by the end of the current fiscal year.

Like many other banks around the world, ANZ has benefited from the release of cash set aside for potential bad debts resulting from the pandemic. Cash profit from continuing operations was A $ 6.2 billion ($ 4.7 billion) for the fiscal year ended Sept. 30, 4% ahead of expectations.

The bank declared a dividend of A $ 0.70 per share, up 2 cents from the previous half-year and up from 35 cents in the same period last year, when regulators restricted payments in dividends due to the uncertainty surrounding the pandemic.

ANZ shares were 0.5% higher in afternoon trading compared to a slightly lower broader market (.AXJO).

In New Zealand, a market dominated by lenders, home loans grew 11% over the year and net interest margin, a key measure of profitability, increased 2 basis points to 2 basis points. , 34%.

The Group’s net interest margin increased by one basis point to 1.64%, mainly due to ultra-cheap financing costs.

“Going forward, the key question will be how much margin ANZ will have to sacrifice to restore balance sheet growth,” said Victor German, banking analyst at Macquarie, in a client note.

($ 1 = AU $ 1.3303)

Reporting by Paulina Duran in Sydney and Riya Sharma and Nikhil Kurian Nainan in Bengaluru; Editing by Edwina Gibbs

Our Standards: Thomson Reuters Trust Principles.


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