ANZ boss says households remain robust, posts record $7.4b profit

ANZ boss says households remain robust, posts record $7.4b profit

ANZ boss Shayne Elliott says households remain resilient, despite increasing cost-of-living and interest rate pressures as the bank reported a record $7.4 billion in cash profits.

On Monday, ANZ posted a 14 per cent in cash profit to $7.4 billion – slightly below market expectations of $7.6 billion.

ANZ chief executive Shayne Elliott said he was optimistic about the bank’s proposed takeover of Suncorp Bank.

ANZ chief executive Shayne Elliott said he was optimistic about the bank’s proposed takeover of Suncorp Bank.Credit: Arsineh Houspian

Elliott said of the bank’s 1 million homeowners, only 2000 were in hardship.

“They’re actually muddling through pretty well,” he said. “Now it’s dreadful for the 2000, and we’ll do everything we can to help them through. But in the scheme of things, it’s relatively modest.”

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However, the bank increased its total credit provisions – money set aside for loan losses – by $245 million, citing increased risks associated with rising inflation, higher interest rates and geopolitical tensions.

The bank announced a fully franked interim dividend of 81¢ a share compared with 72¢ a share last year.

ANZ’s net interest margin – a measure of profitability that compares funding costs with what lenders charge for loans – increased 7 basis points to 1.7 per cent.

Favourable deposit margins from a rising interest rate environment drove the bulk of the bank’s improved profitability, partly offset by home loan pricing competition.

ANZ’s average deposits and other borrowings increased 6 per cent, or $44.4 billion, driven by growth in term deposits across all of its divisions.

The bank’s Australian commercial division was its highest-returning arm, with revenue growing 11 per cent over the year, while its institutional division posted record results with all three core businesses including transaction banking, corporate finance and markets generating more than $2 billion in revenue each.

ANZ’s operating expenses increased 6 per cent to $560 million, largely reflecting a $68 million increase in restructuring expenses and a $466 million – or 9 per cent increase – in personnel expenses.

On the ANZ’s proposed $4.9 billion takeover of Suncorp’s banking division, Elliott said the bank would be going in front of the Australian Competition Tribunal in a few weeks after the deal was knocked back by the Australian Competition and Consumer Commission.

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“They’ve given us an indication that they’ll come back with a decision in late February,” he said.

“We’re really optimistic about that. We strongly believe our case is a good one, that this really is in the best interest of consumers.”

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