ANZ Bank annual profit jumps 53 percent to $4.4B

AP News
|
Posted: Oct 28, 2010 12:17 AM
ANZ Bank annual profit jumps 53 percent to $4.4B

ANZ Banking Group Ltd., one of Australia's four dominant lenders, on Thursday posted a better-than-expected 53 percent jump in annual profit to 4.5 billion Australian dollars ($4.4 billion) as bad debt costs diminished.

Critics argue that the strong result demonstrates diminishing competition in Australia's mortgage market since nonbank lenders failed during the global economic crisis.

ANZ results for the fiscal year that ended Sept. 30 exceeded market expectations. They pushed the bank's shares 3 percent higher to AU$24.78.

Rival National Australia Bank on Wednesday reported a 63 percent surge in net profit for the same year to AU$4.2 billion, citing more loans to businesses and fewer bad debts.

ANZ's provision for bad debts totaled AU$1.8 billion, down 41 percent from a year earlier when bad debts at Australian banks were peaking because of the financial crisis.

Australia's banks avoided the huge losses of their international counterparts due to relatively strong Australian government regulation that meant they made fewer high-risk investments.

The bank's preferred performance measure, cash profit, rose 51.7 percent to AU$5.1 billion for the latest year.

Of the AU$4.5 billion statutory profit, AU$509 million _ or 11.3 percent _ came from ANZ's Asia-Pacific operations.

ANZ is Australia's biggest lender in Asia and Chief Executive Mike Smith said his bank is on track to achieve its target that the Asia-Pacific unit would generate 20 percent of group net income by 2012.

Smith characterized the bank's 2010 result as "good."

ANZ did not give earnings guidance for 2011, but Smith said he expected revenue momentum to continue in 2011 and for corporate loan growth to increase.