ANZ boss warns of inexperienced investors

ANZ’s chief executive says he is more worried about inexperienced property investors jumping into the market without enough thought than he is about the rate of house price growth.

Thursday, November 3rd 2016, 3:42PM

by Susan Edmunds

The bank has announced a 2016 profit of $1.53 billion, down 9%.

Net interest income increased 5% over the year but interest margins fell.

Chief executive David Hisco said he was pleased with the result and much of the fall in profit was due to accounting changes.

“We had a solid year and while our net profit after tax wasn’t as strong as the 2015 financial year, the New Zealand business is performing well and reflects the performance of the economy.

“We have continued to grow lending and deposits, and we remain the largest mortgage lender across all major cities. Our KiwiSaver funds under management are at a record high and we remain the biggest provider.”

He has previously raised concerns about how fast house prices were rising.

But today he said his biggest worry was about amateur investors “jumping in at the last minute, thinking it’s easy. House prices don’t always go up.”

Hisco said that meant the Reserve Bank’s stricter limits on lending to investors were a welcome move. When investors had to come up with a 40 per cent deposit, they needed to think more carefully about the deal and if they went ahead, would have good equity in it, he said.

Some investors were choosing to buy in towns where prices were cheaper, he said. “As long as the population is rising in those towns, it makes sense. But if it’s not who’s going to rent those houses and why would they pay more than they used to? Caution is a good idea.”

Hisco said the mortgage broker channel was still operating well for ANZ but was as much about providing a service level to customers than anything else. “We have a big machine here so we need to make sure it works properly.”

While ANZ is reviewing its wealth management business, Hisco said there were no plans to change the ownership of OnePath in New Zealand.

Hisco said there were now more customers using the bank’s mobile app than the internet banking function and branches combined.

That was a trend that looked set to continue to grow, he said. “We’ve been surprised at the speed of which it has shifted online.”

Tags: ANZ