ANZ profit tracking well
(1 September 2009 – Australia) ANZ has released a trading update for the ten months to July 2009, announcing solid business performance in many business areas.
The statement from the Bank said unaudited underlying profit after tax was on track to exceed the A$2.9bn figure reported last year.
There were also signs that the Bank’s impaired assets growth has started to moderate. ANZ’s impaired loans and derivatives were up by seven percent in the June quarter, a considerable improvement on the 18 percent growth seen in the first quarter of 2009.
ANZ experienced a three percent increase in net loans and advances during the first ten months of the reporting year. This reflects mixed performance across the three main business divisions. Net loans and advances in the Retail and Commercial divisions grew by nine percent and three percent respectively. By contrast, there was a seven percent decline in Institutional lending, mainly due to these businesses’ focus on paying down debt and a shift to equity funding.
The Bank said its performance in Australia was helped by loan repricing which would deliver improved margins. An 11 percent growth in mortgage lending also strengthened ANZ performance in its biggest regional market.
The profit reported by ANZ’s Asia Pacific, Europe & Americas division is expected to rise by 60 percent compared to the previous year, with the recent acquisition of RBS Asia assets giving ANZ a firmer foothold in Asia.
ANZ reiterated its estimate that credit impairment provisions would be about 20 percent higher in the second half of the reporting year. The Bank said that this increase was driven mainly by the performance in New Zealand, where provisions would be roughly three times the amount reported in the previous year.
In talking about the results update, ANZ chief executive Mike Smith said there were reasons for cautious optimism, with some early signs of an economic recovery in Australia and Asia.
He added that the economic conditions in New Zealand remain difficult but that ANZ was coping reasonably well.
There were also signs that the Bank’s impaired assets growth has started to moderate. ANZ’s impaired loans and derivatives were up by seven percent in the June quarter, a considerable improvement on the 18 percent growth seen in the first quarter of 2009.
ANZ experienced a three percent increase in net loans and advances during the first ten months of the reporting year. This reflects mixed performance across the three main business divisions. Net loans and advances in the Retail and Commercial divisions grew by nine percent and three percent respectively. By contrast, there was a seven percent decline in Institutional lending, mainly due to these businesses’ focus on paying down debt and a shift to equity funding.
The Bank said its performance in Australia was helped by loan repricing which would deliver improved margins. An 11 percent growth in mortgage lending also strengthened ANZ performance in its biggest regional market.
The profit reported by ANZ’s Asia Pacific, Europe & Americas division is expected to rise by 60 percent compared to the previous year, with the recent acquisition of RBS Asia assets giving ANZ a firmer foothold in Asia.
ANZ reiterated its estimate that credit impairment provisions would be about 20 percent higher in the second half of the reporting year. The Bank said that this increase was driven mainly by the performance in New Zealand, where provisions would be roughly three times the amount reported in the previous year.
In talking about the results update, ANZ chief executive Mike Smith said there were reasons for cautious optimism, with some early signs of an economic recovery in Australia and Asia.
He added that the economic conditions in New Zealand remain difficult but that ANZ was coping reasonably well.
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