NZPA
Friday 19th August 2011 |
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ANZ New Zealand says its provisions for credit impairments are down 68 percent in the nine months to June 30, from a year ago, and its profits up 45 percent.
The New Zealand unit of Australia's ANZ, which runs two bank networks in this country, reported an underlying profit of $NZ916m in the nine-month period, compared to $NZ630m in the same period the previous year.
This was before a $NZ102m charge for a move to a single core banking system. After this and other adjustments the bottom line profit was $NZ735m, up from $NZ620m last year.
The bank runs both ANZ and National Bank of New Zealand branch networks. The bank is adopting the National Bank IT network for both banking networks next year but It has denied speculation that it will eventually merge the branch networks.
"Our robust business performance reflects an increase in operating income of 7 percent, sound cost management and a significant reduction in provisioning for credit impairment," said chief executive David Hisco.
Provisioning was down $NZ276m, or 68 percent, reflecting the improving New Zealand economy.
"Credit quality in the rural sector, in particular, has improved steadily as the benefits from strong commodity prices flow through. We are also now seeing improvements in key indicators such as retail delinquency rates but we are maintaining a healthy dose of caution given the current challenges in the global economic environment," Hisco said.
The impact of the Canterbury earthquakes on credit quality had been less negative than expected.
"Nationally, we have seen customers moving from fixed to variable rate mortgages. As at mid July 2011, 40 percent of our home lending book was fixed compared to 58 percent at September 2010, with 25 percent of new lending flows being fixed."
ANZ is New Zealand's largest bank. Westpac said earlier this month that none of the major banks in New Zealand were trying to make their mark as a price discounter and this created a more rational credit pricing environment.
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