The profit lift was driven by gains from financial hedges, lower costs, and reduced bad debts. Photo: RNZ / Marika Khabazi
The country's biggest bank has posted a higher first half profit as it gained from policies to cope with financial market voaltility, while income was slightly up and costs were marginally lower .
Key numbers for the six months ended March compared with a year ago:
- Net profit after tax $1.27b vs $1.04b
- Net cash profit $1.16 b vs $1.15b
- Revenue $2.54b vs $2.52b
- Net interest income $2.2b vs $2.14b
- Impairments - gain $5m vs loss $33 m
- Net interest margin 2.59 pct vs 2.56 pct
The bank's profit for the six months ended March was $1.27 billion, a lift of about 23 percent.
Chief executive Antonia Watson said the bank's performance was consistent amid uncertainty, financial market turmoil, and broader economic conditions.
"Kiwis are very aware of what is going on in the economy and we are seeing this play out through our customers' behaviour."
"Global uncertainty is likely to keep firms cautious about taking risks for a bit longer, slowing the recovery in investment and employment.."
She said the fall in mortgage rates was filtering through to customers who were renewing, with a significant number choosing to maintain payment levels and pay off loans faster.
Watson said a borrower with a $500,000 mortgage could be saving $260 a month in repayments as they refixed at lower rates.
ANZ increased lending by 1 percent as it looked to defend market share, and it increased the amount raised from customer deposits by about 3 percent, while it managed to keep a lid on costs with expenses down 1 percent.
Watson said overall there were "encouraging" signs that the economy was improving, but recovery would take longer than previously expected.
However, she said having to meet Reserve Bank capital levels would cost the bank $5.4b by July this year.
"This capital impost comes at a cost to our business, shareholders and customers," she said.
The banking industry, Commerce Commission, and politicians including the Minister of Finance have criticised the RBNZ's capital rules as too high and tough, causing reduced lending.
The RBNZ has announced a review of the rules to be done by the end of the year.
