ANZ cash profits jump in latest big bank turnaround
ANZ has reported a jump in cash profits for the December quarter in another sign the big four banks are making a turnaround after COVID-19.
ANZ’s unaudited statutory profit after tax for the first quarter of the financial year was $1.6 billion, up from a quarterly average of $773 million the first half of last year.
The bank reported its unaudited cash profit from continuing operations was $1.8 billion for the December quarter, up 54 per cent from the average of the last two quarters and 156 per cent from the first two quarters of last financial year.
“We’re pleased to have achieved these results for shareholders while also helping customers in difficulty and providing the vital lending needed to support the economic recovery”: ANZ chief executive Shayne Elliott. Credit:Arsineh Houspian
The figures were reported in a quarterly trading update, a first for ANZ since the Global Financial Crisis to keep the market informed during the uncertain environment brought on by the coronavirus pandemic.
ANZ chief executive Shayne Elliott said the bank’s performance had been strong during volatile trading conditions, which “again highlights the benefits of disciplined execution of our strategy as well as maintaining a simpler and well balanced portfolio of businesses”.
“We’re pleased to have achieved these results for shareholders while also helping customers in difficulty and providing the vital lending needed to support the economic recovery,” Mr Elliott said.
The bank provided an update on loan deferrals, with the total bill for paused loans of $33 billion for mortgage holders and $10 billion for businesses being reduced by 97 per cent and 90 per cent respectively.
Of these, around 1 per cent of ANZ’s mortgage accounts had now been transferred to hardship, 1 per cent had been restructured and the remaining 98 per cent had restarted repayments.
For businesses, around 4 per cent of accounts have been transferred to hardship, 6 per cent restructured and 90 per cent returned to payment, according to ANZ.
ANZ’s total credit provision for bad loans for the December quarter was $150 million, which compares to the $1.7 billion set aside during the previous financial year, reflecting the ongoing government and bank support packages for customers affected by COVID-19.
Mr Elliott also said all its major business clients had performed well through the quarter, adding ANZ had expanded its market share of Australian and New Zealand home loans.
“ANZ is well positioned heading into the remainder of 2021 with good momentum in our core activities,” he said.
Morningstar banking analyst Nathan Zaia said he was pleased to see ANZ’s mortgage growth had not come at the expense of profitability.
“Don’t forget ANZ lost a fair bit of share, so they’ve increased their focus on serviceability and processing times back to where they need to be,” he said. “We expect them to be winning back share but they’ve been able to do it without any notable increase in operating expenses which is good to see.”
More to come
Market Recap
A concise wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon. Sign up here.
Charlotte is a reporter for The Age.