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Strong second half boosts ANZ result

Strong second half boosts ANZ result

(25 October 2005 – Australia) A strong second half has helped ANZ deliver an operating profit after tax of A$3.02 billion, up 7.2 percent on last year. ANZ highlighted strong lending and deposit growth and said credit quality was at its best level for over a decade.

"Lending and deposit growth were up 12 percent and 10 percent respectively on the year, offset by a margin decline of 14 basis points," ANZ chief executive John McFarlane said.

He said ANZ had added 2,221 new staff in predominantly customer facing positions and that expense growth for the year was 11 percent.

"We expect this level of investment to deliver improved returns over the coming year, and particularly into 2007, which should then see the cost income ratio move downwards once again," McFarlane said.

He said the bank’s Institutional business was being reinvigorated after a couple of years of flat earnings and asset growth.

"Institutional had a respectable year in the face of strong competition, up eight percent, building momentum after several years focusing on risk reductions.

"Corporate Australia performed well with good growth coming from the innovative Wall Street to Main Street strategy, however the exceptional asset growth in Business Banking has begun to slow," McFarlane said.

He said credit card balances grew 21 percent over the year, mortgages 14 percent and deposits 10 percent.

In New Zealand, the NBNZ franchise was showing solid progress with integration set to be completed by the end of 2005, he said.

McFarlane said the environment in 20066 would be broadly similar to 2005, enabling the bank to produce continued good results.
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