Another record cash profit for ANZ
(20 February 2012 – Australia) ANZ posted a big profit on Friday, earning an unaudited A$1.48 billion record cash profit for the December quarter, up 5.7 percent from a year earlier.
The bank's chief executive officer Mike Smith defended ANZ’s recent decision to become the first bank to push through an interest rate rise independently of the Reserve Bank, and to reveal plans to cut 1000 staff by September.
These actions reflected a need to transform our business "in new and often painful ways," he said.
"It’s important to reflect that our customers, our staff and the broader community benefit from safe, well-run commercial banks - banks that also generate profits that underpin investor and superannuation returns and that can be re-invested to expand lending," he said.
In recent days, National Australia Bank and Westpac reported quarterly profits of A$1.4 billion and A$1.5 billion, respectively, while Commonwealth Bank generated A$3.57 billion cash profit for its first half.
The bank said it sees no return to pre-financial crisis credit growth, and that its net interest margins - a key measure of bank profitability - shrank 3 basis points in the past half year with funding costs in Australia to blame.
The bank's unaudited net profit comes in at A$1.7 billion.
Smith described the bank’s first-quarter result as solid, with good performances from its Asian and Institutional businesses but offset in part by continued margin pressure in Australia.
He said the resources sector is underpinning the macro-economy in Australia, but other sectors in the economy are under continued pressure as a result of the strong dollar, and pull-back in discretionary spending by consumers and businesses.
"We recognised the need to adapt to this more challenging environment early and as a result ANZ is in a strong financial position with a strategy to take advantage of the continuing strong growth in Asia," he said.
"The environment for banking internationally has become significantly more challenging following the first phase of the global financial crisis," Smith said.
"Bank funding costs are continuing to rise as the deepening economic and financial crisis in Europe causes dislocation and volatility in global markets although prospects are brighter in the United States".
"There will not be a return to the level of credit growth that banks experienced pre-crisis for the foreseeable future, particularly in our major domestic markets in Australia and in New Zealand, as consumers reduce their gearing and businesses pace investments," Smith said.
These actions reflected a need to transform our business "in new and often painful ways," he said.
"It’s important to reflect that our customers, our staff and the broader community benefit from safe, well-run commercial banks - banks that also generate profits that underpin investor and superannuation returns and that can be re-invested to expand lending," he said.
In recent days, National Australia Bank and Westpac reported quarterly profits of A$1.4 billion and A$1.5 billion, respectively, while Commonwealth Bank generated A$3.57 billion cash profit for its first half.
The bank said it sees no return to pre-financial crisis credit growth, and that its net interest margins - a key measure of bank profitability - shrank 3 basis points in the past half year with funding costs in Australia to blame.
The bank's unaudited net profit comes in at A$1.7 billion.
Smith described the bank’s first-quarter result as solid, with good performances from its Asian and Institutional businesses but offset in part by continued margin pressure in Australia.
He said the resources sector is underpinning the macro-economy in Australia, but other sectors in the economy are under continued pressure as a result of the strong dollar, and pull-back in discretionary spending by consumers and businesses.
"We recognised the need to adapt to this more challenging environment early and as a result ANZ is in a strong financial position with a strategy to take advantage of the continuing strong growth in Asia," he said.
"The environment for banking internationally has become significantly more challenging following the first phase of the global financial crisis," Smith said.
"Bank funding costs are continuing to rise as the deepening economic and financial crisis in Europe causes dislocation and volatility in global markets although prospects are brighter in the United States".
"There will not be a return to the level of credit growth that banks experienced pre-crisis for the foreseeable future, particularly in our major domestic markets in Australia and in New Zealand, as consumers reduce their gearing and businesses pace investments," Smith said.
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