ANZ National Bank nine-month after-tax profit eases

By NZPA

Friday 31st August 2007

ANZ National Bank is reporting an easing in nine-month underlying profit after tax to $805 million from $819 million in the previous corresponding period.

The bank today said the result was affected by a lift in provisions following unsustainably low provisioning charges in the previous corresponding period.

In the nine months to June 30 provision for credit impairment increased $51 million, from the corresponding nine-month period a year earlier, to $56 million.

The bank said changes to the credit risk profile across the portfolio had been minimal, and it had seen continued benign credit conditions in 2007.

Underlying profit before provisions for the nine months was up 6% to $1.3 billion, with profit also up 6%, to $848m.

A strong performance by retail, rural and corporate businesses, with profit before provisions growth of 13%, was offset by a lower institutional result, ANZ National said.

Underlying cost-to-income ratio decreased to 43.3% compared to 43.5%.

Net loans and advances increased by $8.7 billion or 11% over June 2006, to $85.1 billion, with mortgages growing $6 billion or 14 percent to $48.4 billion.

Total deposits were up by $2.9b or 5% over June 2006. Customer deposits grew by $3.2b or 8% to $43.6b.

Underlying costs of $990m were up 5% due to annual increases in salaries, an increase in the number of customer-facing staff and investment in business initiatives, partly offset by control of discretionary expenditure.

ANZ National Bank chief executive Graham Hodges said the bank's underlying performance was the strongest for some time.

"Our market share has grown in a number of businesses and is holding up well across the board, which again supports our decision to maintain our multiple brand strategy, including our two leading banking brands."

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