ANZ disappoints market with trading update

ANZ shares have fallen after it disappointed investors with a fall in statutory profit, and a 6.3 per cent rise in the widely preferred cash profit measure.

Australia's third-largest bank has reported a fall in its unaudited, after-tax profit for the three months to the end of December.

The bank made $1.36 billion over that period, which is down 20 per cent on the same period the year before.

Its cash profit, which is the banking industry's preferred measure of earnings, and excludes one-off write-downs and accounting adjustments, was up 6.3 per cent to $1.53 billion.

However, the growth seemed to underwhelm investors, who had pushed ANZ's share price considerably higher over recent weeks.

The bank's shares had given up 1.4 per cent to $27.67 by 10:23am (AEDT), while the other major banks were broadly flat.

In a statement, ANZ's chief executive Mike Smith said domestic conditions remained quite soft, but the bank has increased its market share in household mortgages and deposits.

He also says the bank's Asian focus is starting to pay off.

"Our strategy has seen us benefit from volume growth in Asia and our exposure to these opportunities is an increasingly important part of the group's earnings, with greater China our third largest source of profits after Australia and New Zealand," Mr Smith noted.

The bank says its net interest margin - which measures the gap between the rates the bank pays to borrow money and the rates it lends it out at - was roughly the same at the end of December as it was during September.

However, it says margins in its Australian retail business improved slightly, while the bank also benefitted from cost-cutting measures in the local business.

"Productivity improvement is a key focus ensuring that we can continue to invest in our super regional strategy while also maintaining our financial performance," Mr Smith said.

"Initiatives to manage costs and margins helped to sustain a good performance in the Australia division."

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9327-0.0005-0.05%
    AUDUSD=X
    0.5555-0.0003-0.05%
    AUDGBP=X
    0.6753-0.0003-0.05%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg