ANZ Banking Group has posted a record $5.66 billion full year profit as it grew earnings from its domestic and international operations.
ANZ's net profit for the year to September 30 was up six per cent from $5.36 billion in the previous year, but slightly lower than analyst expectations.
The bank's cash profit of $6.01 billion was also up six per cent from $5.65 billion in the previous year.
ANZ posted underlying profit growth in its Australian, New Zealand and international divisions, while its wealth management business recorded a slight fall.
The bank continued to expand in Asia, with revenues there now making up 21 per cent of its total revenue.
Chief executive Mike Smith said the bank's performance was in line with it's expectations set out earlier in the year.
But he said conditions would get more challenging in the year ahead.
"With the global economy softening, it's clear that the post-GFC, lower growth business environment will be with us for the foreseeable future, as will the requirement to operate with higher levels of regulatory capital and higher funding and liquidity costs," Mr Smith said in a statement on Thursday.
"Although the operating environment in 2013 looks more challenging with stronger headwinds in a number of areas, our unique growth strategy and the momentum we have in adapting to the new environment means we are well placed to deliver value and performance to shareholders in 2013," Mr Smith said.
The bank declared a final dividend of 79 cents per share, an increase of four per cent from the same time last year.
However ANZ's return on equity, a key measure of performance for banks, fell by 60 basis points in the year to 15.6 per cent.
Another key measure of profitability, net interest margin, was also lower over the year to September, down 11 basis points to 2.31 per cent.
ANZ has the lowest reliance on offshore markets to fund its lending, with 61 per cent of its funding coming from customer deposits.
But increasing competition for deposits among the banks has increased the cost of attracting depositors.
ANZ grew its Australian customer deposits by six per cent over the year to September, to $194.7 billion.
Loans increased by eight per cent from the previous year to $427.8 billion.
The bank said it had improved its cost management, and reduced its number of employees by four per cent in the year to September to just over 48,200.