ANZ's Australian margins recover

ANZ says its margins recovered in Australia over the June 2012 quarter, while margins were stable at a group level over the quarter.

In a trading update that was typically thin on detail, but less typically thin on colour, that ANZ released on Friday, the bank said underlying profit for the nine months to June 2012 increased 5.5 per cent to A$4.5 billion. It said statutory profit increased 10.3 per cent to $4.4 billion.

Like other banks, ANZ has struggled to reprice assets, at least in Australia, to match rising funding costs.

The bank has also proved timid about lifting consumer and small business rates despite taking the lead in formally breaking the nexus between its pricing approach and the Reserve Bank of Australia's cash rate cycle.

On capital management, ANZ's chief executive, Mike Smith, said the bank may need to hold an additional capital buffer, relative to its domestic peers, because of its business in Asia, but there was no need for a buffer for acquisitions.

"I believe if we want to do an acquisition we should go to the market and raise the capital and test the validity."

ANZ said its core capital ratio at June was 7.8 per cent, and this was unchanged from the March half-year. On a "harmonised" basis, ANZ put this ratio at 9.8 per cent.

Smith also foreshadowed "some important initiatives for the Australian retail network", and said the bank would undertake a further briefing on its technology later in the year.