ANZ disappoints with a cash profit of $7.2 billion

Photo: Hannah Peters/ Getty.

The ANZ Bank posted a weaker than expected full year cash profit of $7.2 billion, a “modest” rise of just 1%, as the bank faces lower economic growth and intense competition.

Outgoing CEO Mike Smith says the result is another record in a constrained environment.

“We have continued to see growth in our core customer franchises in Australia, in New Zealand and in key Asian markets, partly offset by the effect of macro-economic headwinds on the International and Institutional Banking Division,” he says.

Smith says there are significant opportunities for the NZ but lower economic growth, intense competition, the growing cost of regulation and market volatility present headwinds for all banks.

Analysts had expected a cash profit of $7.117 billion, a rise of 2.42%.

Statutory profit was up 3% to $7.5 billion.

Business in Australia was good with cash profit growing 7.2% to $3.274 billion, as customer numbers increased along with increased product sales and market share.

However, international and institutional banking cash profit fell 1.6% to $2.664 billion.

“While it has been a challenging year for the business we have continued to develop the customer franchises in Asia, New Zealand and Australia with particularly good outcomes in Asia,” Smith says.

“Customer sales in our higher returning products demonstrated good growth with cash deposits up 11%, commodities sales up 44% and rates sales up 32%.”

The global wealth division increased profit by 11%.

“Over the past eight years we have strengthened ANZ, created Australia’s only truly regional bank and built a better bank for our customers in Australia, in New Zealand and in Asia Pacific. I know ANZ will be in good hands when Shayne Elliott succeeds me as Chief Executive on 1 January,” Smith says.

A final fully franked dividend of 95 cents was declared.

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