Friday 6th March 2009 |
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The unit of Melbourne-based Australia & New Zealand Banking Group posted a 32% drop in profit to $210 million for the three months ended Dec. 31, according to a statement today. It took a credit impairment charge of $94 million, up from $32 million a year earlier, and said full-year provisions may double to $572 million.
"Volume growth has been flat and margins under pressure due to higher wholesale funding costs, competition for deposits and break costs on mortgages as customers take advantage of lower interest rates," the company said.
"The New Zealand economy contracted sharply with delinquencies subsequently rising strongly off a historically low base," it said. Provisions "could approach double those of last year," when they were $286 million.
Since the end of the quarter, the bank has taken a $161 million charge against revenue for its 49% share of costs associated with the payment offer to investors in two ING New Zealand frozen funds.
Net interest income in the latest quarter rose 5% to $601 million. The bank said it is well capitalized, with tier one capital of 8.19% and total capital of 11.68%.
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