ANZ's half year cash profit up 4% to $3.32 billion

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  • The ANZ’s half year to March: Cash profit up $3.32 billion, statutory up 14% to $3.32 billion.
  • But CEO Shayne Elliott expects revenue growth for the second half of 2018 to be constrained.
  • External legal costs for the financial services royal commission to be around $50 million.

The ANZ Bank today announced a 4% lift in cash profit to $3.32 billion for the half year to March but sees intense competition and more regulation ahead.

Statutory profit after tax for the six months was $3.32 billion, up 14%, and within analyst forecasts.

The ANZ, the first of the big four to report half years results, sounded a warning about increased regulation ahead and the impact of the royal commission now investigating a series of scandal in the financial services sector.

Return on equity increased 32 bps to 11.9% with cash earnings per Share up 4% to 119.4 cents. Cred impairment charges fell $408 million from $720 million a year ago.

“This result demonstrates our strategy to build a better balanced, better capitalised and simpler bank is delivering results for customers and shareholders despite continued headwinds for the sector,” says CEO Shayne Elliott.

Staff numbers fell 4466 over the six months to 41,580.

He expects revenue growth for the second half of 2018 to continue to be constrained by intense competition as well by increased regulation.

“Australia’s economic growth is expected to pick up in the coming year, led by a broad lift in the business sector and additional stimulus from public spending,” he says.

“However, historically high levels of household debt and low wage growth will offset some of the positive impact of recent strong employment data, so consumers are likely to remain cautious.

“The difficult trading conditions we originally forecast in 2016 are expected to continue for the foreseeable future.

“This reinforces the decision we took to focus our business on areas where we can deliver exceptional customer outcomes, solve real customer needs and generate a decent return for shareholders. Our focused strategy of simplification and digital transformation remains appropriate.”

The bank expects external legal costs for the financial services Royal Commission to be around $50 million.

“The Royal Commission into Financial Services in Australia will also continue to have an impact on the sector,” says Elliott.

“ANZ will learn from this Inquiry and continue to take real action to restore trust within the community. We’re committed to playing our part and will continue to engage with the Commission in an open, constructive and transparent manner.”

The bank declared a steady fully franked interim dividend of 80 cents a share, a payout ratio of 66% of cash profit.

The half year numbers at a glance:

Source: ANZ Bank

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