ANZ CFO Farhan Faruqui
ANZ reported a net profit of A$3.4 billion for the six months to March 2024 – a fall of 4 per cent compared with earnings of $3.5 billion in the March half last year. The result was also down 4 per cent on the September half last year, when the bank reported net profit of $3.5 billion. On a cash basis, profit was down 7 per cent year-on-year to $3.5 billion.
Income: Net interest income of $7.9 billion was down 7 per cent compared with the previous corresponding period and down 2 per cent compared with the September half. Other operating income rose 36 per cent year-on-year to $2.2 billion. Operating income of $10.1 billion was flat year-on-year and down 2 per cent half-on-half.
Expenses and cost to income: Operating expenses of $5.2 billion were up 4 per cent compared with the previous corresponding period and up 1 per cent half-on-half. The cost-to-income ratio has increased from 49.2 per cent in the March half last ear to 49.8 per cent in the September half and 51.4 per cent in the latest half.
Impairment expense: The bank booked a credit impairment charge of $70 million, which was 47 per cent lower than the $133 million charge in the March half last year and 38 per cent lower than the $112 million charge in the September half. Included in the charge was $38 million of individually assessed charges – down from $133 million in the previous corresponding period. The impairment charge as a percentage of gross loans and advances fell from 4 basis points to 2 bps year-on-year.
Credit quality: The proportion of Australian mortgages past due by 90 days or more rose from around 55 bs to more than 75 bps over 12 months. The bank has gross impaired assets of $1.5 billion, an increase of 25 per cent over the previous corresponding period. Gross impaired assets as a proportion of gross loans and acceptance rose from 17 to 21 bps over 12 months.
Margin: The net interest margin was 1.56 per cent – down from 1.75 per cent in the March half last year and 1.65 per cent in the September half. The biggest hit to NIM was in the Australian retail division, where the margin fell 44 bps year-on-year.
Return on equity: ROE has fallen from 10.6 per cent in the March half last year to 10.4 per cent in the September half and to 9.7 per cent in the latest half. On a cash basis, ROE was 10.1 per cent.
Dividend: The bank declared an interim dividend of 83 cents a share, compared with 81 cents a share in the March half last year. The dividend is franked at 65 per cent, reflecting the value of earnings from overseas operations. The dividend payout ratio was 70.3 per cent, compared with 63.5 per cent a year ago.
The divisions: The institutional division generated the biggest cash profit for the group, at $1.5 billion. This was down 4 per cent compared with the March half last year but up 12 per cent on the September half. The Australian retail division’s profit fell 25 per cent year-on-year and fell 9 per cent half-on-half to $794 million. Australian commercial was down 10 per cent year-on-year and down 5 per cent half-on-half to $665 million. New Zealand was up 3 per cent year-on-year and up two per cent half-on-half to $791 million. The Pacific was down 9 per cent year-on-year and down 16 per cent half-on-half to $31 million.
Loans and deposits: The Australian home loan book grew 7.1 per cent year-on-year to $316 billion. The Australian commercial loan portfolio grew 6.7 per cent to $64 billion and institutional loans fell 1 per cent to $206 billion. The New Zealand home loan book grew 3 per cent to $100.4 billion. Customer deposit fell 1 per cent to $641.1 billion.
Market share: Australian home loan market share rose from 13.2 per cent to 13.5 per cent year-on-year. New Zealand home loan share fell from 30.7 per cent to 30.5 per cent.
Capital: The common equity tier 1 capital ratio is 13.5 per cent, compared with 13.2 per cent in the March half last year and 13.3 per cent in the September half. The bank has declared a $2 billion share buyback. On a pro forma basis, assuming completion of the Suncorp Bank acquisition and the buyback, the CET1 capital ratio falls to 11.85 er cent.
Funding and liquidity: The bank has $715.2 billion of net loans and advances – up 4 per cent over the previous corresponding period. It has $641.1 billion of customer deposits – down 1 per cent year-on-year. The deposit-to-loan ratio is 89.6 per cent. The net stable funding ratio is 118 per cent and the liquidity coverage ratio is 134 per cent. During the half the bank issued $21.2 billion of term wholesale funding.
Staffing: The bank has 40,262 staff (full time equivalents), an increase of 1 per cent over the previous corresponding period.