Monday 31st August 2009 |
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ANZ National, New Zealand’s largest banking group, reported a 43% decline in profit for the first nine months as the impact of recession forced it to more-than triple its credit impairments.
Profit fell to $478 million in the nine months ended June 30, from $833 million a year earlier, according to parent Australia & New Zealand Banking Group’s NZ branch general disclosure statement.
“This result reflects the tough recessionary times in which we are operating, said ANZ National chief executive Jenny Fagg. Increased provisions for credit impairment reflect “the environment as households and businesses come to terms with the effect of the global slowdown.”
Credit impairment provisions surged to $532 million from $167 million and the results included a charge of $147 million related to the settlement with investors in the ING Diversified Yield and ING Regular Income funds. Provisions in the full year are expected to be three times higher than in 2008.
Underlying profit climbed 14%, mainly reflecting increased profit in its institutional businesses. ANZ National’s underlying net interest margin across its retail, commercial and rural businesses fell 26 basis points from a year earlier, it said.
“Strong backing” from parent ANZ Bank includes $10 billion of funding from the sale of mortgage assets to the parent, Australia’s fourth-biggest lender.
New Zealand was the only region for Melbourne-based ANZ Bank where loan provisions increased.
The bank today said underlying profit in the 10 months through July was “slightly above” the year-earlier figure as growth in home lending. Net loans and advances rose 3% in the first 10 months, the bank said in a statement.
“In Australia and Asia, the economies are showing early positive signs of recovery, and although the cycle is still playing out, there are reasons for cautious optimism,” chief executive Mike Smith said. “In New Zealand, economic conditions remain difficult with the economic recovery likely to be much slower.”
Businesswire.co.nz
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