ANZ’s profit soared on cost cuts and lower provisions in results announced today.
At the same time, the bank is stepping up asset sales to boost capital in order to meet APRA’s minimum regulatory capital requirements. The asset sales, along with the reduction in lower-returning Asian loans, is expected to help lift return on equity, a measure of the banks efficiency in reinvesting shareholder funds.
The following charts explain the effects of ANZ’s efforts:
The asset sales above will boost ANZ’s common equity tier 1 ratio, a measure of the bank’s ability to absorb future losses, by $2.7 billion or 70 basis points to capital, it said.