ANZ Bank's NZ underlying earnings fall 19%

Friday 26th February 2010

Australia & New Zealand Banking Group’s New Zealand business reported a 19% decline in underlying earnings in the three months ended December 31, reflecting impairment charges and ‘subdued’ lending volumes.

Underlying profit fell to $202 million in the latest quarter, from $250 million a year earlier, the lender said in its NZ Branch General Disclosure Statement. The results included a credit impairment of $151 million, up from $95 million in the same period 12 months earlier.

Lending volumes slipped to $96.65 billion from a year-earlier $99.12 billion. The New Zealand figures coincide with the release of the parent company’s four-month results in Australia, which showed underlying profit at the Melbourne-based bank climbed 16% to A$1.6 billion in the period to Jan. 31, amid growing evidence of a strengthening Australian economy.

Shares of ANZ Bank rose 2.9% to A$22.89 on the ASX today.

For the New Zealand bank, Tier One capital improved to 9.62% from 8.19% in the final quarter of calendar 2008. Its total liquidity portfolio was $11.08 billion at December 31, up from $9.2 billion a year earlier.

ANZ New Zealand chief executive Jenny Fagg said there is evidence that New Zealand’s economy has stabilised, having emerged from recession in the second quarter of 2009.

While impairments rose from a year earlier, they declined from $351 million in the three months through September last year.

“As the economic recovery slowly gathers pace, it does offer the prospect of a significant improvement in ANZ’s business performance over the next year or two,” Fagg said.

“ANZ New Zealand remains strongly capitalised and profitable, with costs well-managed.”

Businesswire.co.nz

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