ANZ Bank Profit Rises as Australia’s Economic Rebound Builds

(Bloomberg) -- Australia & New Zealand Banking Group Ltd.’s first-half profit climbed as the lender wound back bad debt provisions made during the pandemic and the country’s economic recovery builds.

Cash earnings from continuous operations rose to A$3 billion ($2.3 billion) in the six months through March 31, compared with A$1.4 billion in the same period a year earlier, according to a statement Wednesday. That narrowly missed the A$3.1 billion estimate of four analysts surveyed by Bloomberg. The Melbourne-based firm will pay an interim dividend of 70 Australian cents per share.

ANZ is the second of the nation’s four biggest banks to give an investor update this results season after Westpac Banking Corp. on Monday said profit surged and reinstated an interim dividend that it was forced to cancel last year due to the pandemic. The country’s central bank on Tuesday upgraded its economic outlook for a recovery that’s helping to offset pressure on banks from the low interest rate environment.

“While many households and businesses are still doing it tough, Australia and New Zealand are emerging from the sharpest contraction in economic activity in a generation quicker and stronger than many believed possible,” Chief Executive Officer Shayne Elliott said in the statement. “There is still significant uncertainty. You only need to look at how the pandemic is playing out overseas, as well as recent lock-downs, to realize how quickly the situation can escalate.”

Key Insights

• Total release of provisions A$491 million
• Common equity Tier 1 ratio 12.4%
• Net interest margin on cash basis slipped to 1.63% from 1.69% a year earlier
• Return on equity on cash basis climbed to 9.7% from 4.4%

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• For more information on the results, click here.

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