ANZ cracks $2 billion profit mark

The country's largest bank has reported it first ever $2 billion profit on the back of a strong housing market and increased economic activity.

Thursday, October 27th 2022, 10:44AM 3 Comments

ANZ has reported a net profit after tax of $2.06 million for the year, fuelled by increased lending and post-pandemic economic activity.

This is an 8% increase on the previous year, while its statutory NPAT, which includes gains and losses from economic hedges, was up 20% to $2.3 billion.

Chief executive Antonia Watson said the 8% increase in profit was a result of a combination of pent-up economic activity post the pandemic and a buoyant housing market.

“Coming into the 2021-2022 financial year we didn’t anticipate the New Zealand economy would hold up as well as it has,” she said in an announcement with the results.

“While inflation and supply chain problems, particularly for importers and exporters, were an issue for many customers throughout the year the desire to get back to some kind of normal kept consumer spending up.

“While the housing market has quietened significantly in recent months, following four official cash rate (OCR) rises since May, it was strong for most of the financial year.”

Home lending increased $5.3 billion to $104 billion over the 12 months.

Business and Institutional customers continued to manage well despite many facing challenges throughout the year, including cost inflation, supply chain difficulties, and finding staff. Non-housing lending to Business and Institutional customers — including agri — remained muted, increasing by $700 million.

The Reserve Bank of New Zealand’s (RBNZ) new capital rules equate to an increase in minimum regulatory capital required of $2.2 billion over the course of the year, and will require ongoing regulatory capital uplift until 2028.

“Banks are a reflection of the economies they operate in, and New Zealand has been far more resilient than expected,” Watson said.

“Many of our customers have taken the opportunity to pay down debt and increase their savings. This caution is wise given the dark clouds on the horizon.

“Inflation is stubbornly high and that will mean higher costs of living and higher interest rates for longer. Global growth and geopolitical issues outside New Zealand’s control could also severely impact the country in 2023.

“The uncertain environment means New Zealanders need to be cautious.”

That was the main reason for ANZ increasing its credit impairment provisions to $751 million, with a $39 million charge recognised in the results.

During the year ANZ largely completed the delivery of the RBNZ’s new Outsourcing Policy (BS11).

The five year project came at considerable cost and requires ANZ Bank NZ to operate independently of ANZ Group systems and processes in the highly unlikely event of abrupt loss of service from ANZ Group.

Tags: ANZ

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Comments from our readers

On 27 October 2022 at 6:30 pm Laurie said:

Mortgage advisers have in no small way contributed towards that success. Here's hoping that one day soon ANZ will recognize the contribution made. Adviser commission has been the same for 10 years+ yet the costs of doing business (e.g. compliance and insurance) have sky rocketed.

On 28 October 2022 at 9:01 am Matron said:

Just obscene, and it all goes offshore.

Sure make a profit, but a 10% gift would fund a lot of nurses. Same goes for the yellow, red and dark blue banks as well.

On 8 November 2022 at 1:44 pm Dirty Harry said:

@Laurie

WHAT?
Pretty sure a typical home loan today is a lot bigger than 10 years ago. And so is your commission.

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