ANZ posts A$1.41 billion interim result
(Australia) – ANZ Banking Group has kicked off Australia’s bank reporting season with a A$1.41 billion net result, which – while it met analysts’ expectations – disappointed the market due to the lack of an announcement on a share buyback program.
Broking houses, such as UBS Warburg, had tipped a A$500 million share buyback, but ANZ Chief Executive John McFarlane said the bank may wait until later in the year to announce the move.
"I think there’s a good chance of a buyback after the fiscal year end (to September) providing our loan ratios are outside our target range and I think there’s quite a good chance that that is going to be the case," McFarlane said.
There are concerns, however, that the A$500 million could instead be used an "acquisitions war chest" as the bank eyes opportunities in Asia and also potentially New Zealand.
The A$1.41 result for the six months to the end of March was up 8.7 percent on last year, and was driven by good loan growth, cost constraint and low charges for bad and doubtful debts.
Star performers in the result was the institutional banking division, where profits were up 11 percent, and in asset finance, capital markets, transaction services and banking for small and medium sized enterprises.
The disappointments were in the funds management joint venture with ING, and in the consumer finance area, where profits were down 34 percent.
ANZ has flagged more investment and acquisitions in Asia, where the bank is already negotiating for a stake in Thai Military Bank.
"We have flagged strongly and consistently over the past few years that we were going to create some growth options in Asia,’ said McFarlane.
He nominated China, where ANZ recently announced an alliance with the Shanghai Rural Credit Co-Operative, as a particular focus.
McFarlane also said ANZ would look at the National Bank of New Zealand if it was put up for sale by its current owner, Britain’s Lloyds TSB.
"I think there’s a good chance of a buyback after the fiscal year end (to September) providing our loan ratios are outside our target range and I think there’s quite a good chance that that is going to be the case," McFarlane said.
There are concerns, however, that the A$500 million could instead be used an "acquisitions war chest" as the bank eyes opportunities in Asia and also potentially New Zealand.
The A$1.41 result for the six months to the end of March was up 8.7 percent on last year, and was driven by good loan growth, cost constraint and low charges for bad and doubtful debts.
Star performers in the result was the institutional banking division, where profits were up 11 percent, and in asset finance, capital markets, transaction services and banking for small and medium sized enterprises.
The disappointments were in the funds management joint venture with ING, and in the consumer finance area, where profits were down 34 percent.
ANZ has flagged more investment and acquisitions in Asia, where the bank is already negotiating for a stake in Thai Military Bank.
"We have flagged strongly and consistently over the past few years that we were going to create some growth options in Asia,’ said McFarlane.
He nominated China, where ANZ recently announced an alliance with the Shanghai Rural Credit Co-Operative, as a particular focus.
McFarlane also said ANZ would look at the National Bank of New Zealand if it was put up for sale by its current owner, Britain’s Lloyds TSB.
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