ANZ FY profit jumps in robust market

Australia and New Zealand Banking Group has reported a sharp lift in full-year profit on the back of a strong lending market and reversal of some provisions for potential COVID-related losses.

The country’s fourth-largest bank by value delivered statutory net profit of $6.162 billion for fiscal 2021, up 72 per cent from a year ago.

Cash profit from continuing operations, its preferred measure of profitability, was up 65 per cent to $6.198 billion for the 12 months to September 30.

The result was underpinned by strong lending growth and higher customer deposits at the bank’s retail and commercial business, which helped deliver a “good” margin performance for the Australian division.

“This year demonstrated the benefits of our diversified portfolio as we provided solid returns for shareholders while also successfully navigating the continuing impacts of COVID-19,” CEO Shayne Elliott said on Thursday.

ANZ continued to bolster its presence in the home loan market, adding 179,000 new home loan accounts in Australia, although volumes in the second half slowed amid a competitive refinancing market, customers paying down their loans faster and processing issues.

It maintained its position as the leading lender in the New Zealand property market, adding a record 82,000 new loans there.

As a result, revenue growth in the home lending business was in the “low double digits”, Mr Elliott said.

Its bottom line was also helped by the reversal of provisions worth a net $567 million. This comprised of winding back collective provisions of $823 million and increasing specific provisions worth $256 million.

ANZ’s profit had plunged last year after it was forced to make higher provisions to cover for the potential impact from the COVID-19 disruptions, which also forced it to scrap shareholder payouts.

The release of some of those provisions reflected the improved economic outlook in the first half of the year, although the bank said uncertainty arising from extended lockdowns in NSW and Victoria limited further releases in the second half.

The lender said its customers, in general, had managed well through the pandemic, although it is prepared for an outlook that remains “somewhat uncertain”, with more than $4 billion of credit reserves should conditions deteriorate.

“Experience tells us the full impact of COVID-19 will not be fully understood until at least the end of 2022, however we’re well-positioned financially and culturally to respond,” Mr Elliott said.

ANZ had a common equity tier one (CET 1) capital ratio of 12.3 per cent at September-end, giving it a buffer of $6 billion above the prudential regulator’s “unquestionably strong” benchmark.

On Thursday, the lender also declared a final dividend of 72 cents a share, taking the annual payout to $1.42 per share.

ANZ FY RESULT REBOUND

* Operating income down 1.0pct to $17.42bn

* Cash profit up 65pct to $6.20bn

* Net profit up 72pct to $6.16bn

* Final dividend 72 cps vs 35cps.