ANZ Profits fall
(24 April 2008 – Australia) ANZ has reported an Interim net profit of $1,963 million, falling 7 percent on the same result last year.
Despite the fall in overall profit, business performance is strong, with a 12 percent increase in revenue to just over $6 billion.
ANZ chief executive Mike Smith said, on the profit result, that funding pressures had shown some signs recently of peaking.
Funding pressures were clearly the biggest hit on the ANZ result, with provisions having a significant impact. Provisions expanded from $240 million last year to $980 million this year. This is an increase of more than 400 percent.
Smith also said that ANZ has provided for all known exposures, although in the current environment it is more likely that higher levels of new problem loans will emerge than has been experienced in recent years.
While cash profit before provisions was up 11 percent, they fell by 14 percent after provisions and tax were taken into account.
Institutional net profit fell 47 percent due to a sharp increase in credit costs on a small number of accounts, and a higher collective provision charge. However, profit before provisions was up 18 percent on March 2007.
Asia Pacific result was a standout, with net profit up 47 percent, or 58 percent FX adjusted. Investment in the region continued, with expense growth of 34 percent, and this was rewarded with revenue growth of 44 percent, leading to growth in profit before provisions of 52 percent.
ANZ chief executive Mike Smith said, on the profit result, that funding pressures had shown some signs recently of peaking.
Funding pressures were clearly the biggest hit on the ANZ result, with provisions having a significant impact. Provisions expanded from $240 million last year to $980 million this year. This is an increase of more than 400 percent.
Smith also said that ANZ has provided for all known exposures, although in the current environment it is more likely that higher levels of new problem loans will emerge than has been experienced in recent years.
While cash profit before provisions was up 11 percent, they fell by 14 percent after provisions and tax were taken into account.
Institutional net profit fell 47 percent due to a sharp increase in credit costs on a small number of accounts, and a higher collective provision charge. However, profit before provisions was up 18 percent on March 2007.
Asia Pacific result was a standout, with net profit up 47 percent, or 58 percent FX adjusted. Investment in the region continued, with expense growth of 34 percent, and this was rewarded with revenue growth of 44 percent, leading to growth in profit before provisions of 52 percent.
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