ANZ New Zealand, the country’s largest bank, posted a 44% increase in annual profits.
The bank’s net income after tax for September rose $ 583 million from $ 1.336 billion to $ 1.919 billion last year. It’s not too far away ANZ NZ’s record annual profit, which was $ 1.986 billion in September 2018.
According to CEO Antonia Watson, the surge was driven by record demand in the housing market, a stronger-than-expected economy and a significant decline in loan reserves that ANZ NZ put on hold last year.
The bank grew by 9.3 billion US dollars to 99 billion US dollars in the September year.
“The high house prices continue to be driven by historically low interest rates and higher demand for homes than are available. That demand is reflected in our financial results, ”says Watson.
“Over the year we believed that the affordability of housing was no longer sustainable, so we implemented a number of initiatives to try to strike some balance in the market.”
“It is in everyone’s long-term interest that the heat is withdrawn from the housing market. That is why we were the first to introduce a higher LVR [loan-to-value ratio] Restrictions on investors, reduced the minimum size of the apartments we will rent, introduced reduced rates on new homes, and helped fund and facilitate $ 600 million in social housing, ”said Watson.
Meanwhile, the bank saw a turnaround of $ 516 million in loan loss provisions to a release of $ 115 million from a $ 401 million charge.
“The ability of many New Zealand companies to learn and adapt from last year’s lockdowns, and continued strong global demand for our exports, have enabled us to incorporate $ 115 million of previously created loan loss provisions into this year’s results . “Says Watson.
ANZ NZ increased customer deposits by 3.5% and gross lending by 6%. KiwiSaver funds under management grew 16% to $ 19 billion.
The bank, whose parent company is Australia’s ANZ Banking Group, paid a dividend of $ 845 million in June.
ANZ NZ’s annual net interest income increased $ 175 million, or 5%, to $ 3.404 billion. Total operating income rose just $ 83 million, or 2%, after other operating income fell to $ 4.132 billion.
Operating costs decreased $ 129 million, or 7%, to $ 1.607 billion, the decrease attributable to reduced customer turnaround and restructuring, the sale of UDC Finance last year, one-time charges last year, and efficiency gains.
ANZ NZ’s annual results for 2020 included a loss of $ 32 million on the sale of UDC Finance after the $ 794 million sale to Shinsei Bank of Japan and an after-tax loss of $ 23 million from the release of economic hedges on UDC loans. ANZ NZ’s annual profit for 2019 was $ 1.825 billion, down $ 94 million from that year.
According to ANZ NZ, over-the-counter transactions in its branches have decreased by 50% since March 2020.
The press release from ANZ NZ is here.
The ANZ Group announcement is here.