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ANZ National boosts 1Q profit 60% on fair value gains

Wednesday 29th February 2012

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ANZ National Bank, the country’s biggest lender, lifted first-quarter profit 60 percent as it recognised gains in the value of its derivatives, though it lost ground in its loan book.

Net profit was $415 million in the three months ended Dec. 31, up from $260 million a year earlier, buoyed by a $64 million unrealised gain in the fair value of its derivatives, the local subsidiary of Australia & New Zealand Banking said in a statement. Underlying profit rose 17 percent to $351 million.

Earlier this month the parent bank reported a 0.7 percent fall in lending volumes in the period, and in today’s general disclosure statement, ANZ National’s total loans and advances were $93.5 billion as at Dec. 31, down from $95.7 billion a year earlier. Home loans slipped to $53.4 billion from $53.9 billion, while non-housing advances declined to $37.6 billion from $39.2 billion.

“During the quarter, lending volumes remained relatively flat as businesses continued to deleverage and retail customers increased deposits rather than taking on new debt,” chief executive David Hisco said. “We have continued to see customers moving from fixed to variable-rate mortgages.”

The bank’s retail deposit base was steady at $69.39 billion, though there was a shift of about $4 billion from term deposits into on-call accounts.

ANZ National lifted net interest income 5 percent to $679 million in the quarter. It took a $45 million charge on impaired assets in the period, up from $32 million a year ago, and Hisco said there was still some uncertainty over the medium-term impacts from the Canterbury earthquakes.

Hisco said “good progress has been made with the move to a single core banking system,” which plans to integrate the National Bank and ANZ systems. The bank’s board approved an extra $110 million to complete the programme, according to the disclosure statement’s notes.

The dual-listed shares rose 0.4 percent to $28.20 on the NZX and slipped 0.1 percent to A$21.86 on the ASX.


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