ANZ New Zealand's interim profit jumped 23% to a record high, boosted by gains from hedging interest rate and foreign exchange risks, and as it booked an impairment write-back.
ANZ NZ's net profit after tax for the six months to March rose $239 million, or 23%, to $1.277 billion from $1.038 billion in the March half of the bank's previous financial year. The bank's previous record interim profit was $1.096 billion in 2022.
Hedging gains certainly helped, weighing in at $116 million versus a loss of $117 million in the March half last year. The country's biggest bank also recorded an impairment write-back of $5 million versus a charge of $33 million.
Expenses rose $36 million, or 4%, to $895 million. Operating income rose $17 million, or 1%, to $2.541 billion with net interest income up $54 million to $2.196 billion. Non-interest income fell $37 million to $345 million.
Almost 40% of home loan customers ahead on payments by at least 6 months
CEO Antonia Watson says nearly 40% of ANZ NZ's home loan borrowers area ahead on their payments by six months or more and 45% have a savings buffer of at least $5,000. She says during the past three months almost a quarter of home loan customers refixing at a lower rate have either kept their repayment amounts the same or increased them. This, she adds, which means they will now be paying off their home loans faster than before.
Watson is taking a cautiously optimistic tone.
"Many Kiwis are starting to feel the benefits of a lower inflation and interest rate environment and our farmers are seeing strong commodity prices. However, global uncertainty is likely to keep firms cautious about taking risks for a bit longer, slowing the recovery in investment and employment," Watson says.
"While there are still challenges ahead, we're seeing encouraging signs that New Zealand's economy has some firm foundations and there are green shoots."
By the end of the year Watson says about 86% of customers with a fixed interest rate above 6% will shift to lower rates. They could "potentially see" 100 basis points or more coming off their home loans when they refix, she adds.
"For someone with a $500,000 loan this could mean monthly savings of around $260 in repayments."
Figures from the ANZ group, ANZ NZ's Aussie parent, show the NZ division's customer deposits up 3% between September last year and March this year to $113.6 billion. Net loans rose 2% to $136.4 billion, with funds under management down 2% to $38.9 billion.
The NZ division's half-year net interest margin rose four basis points year-on-year to 2.60%, with its cost-to-income ratio up 50 basis points to 38.5%.
Watson says the bank has now spent $1.7 billion on systems and technology over the past three years, which includes a programme to replace ANZ NZ's core banking system and shift to more modern and flexible technology.
The bank's paying a $744 million half-year dividend, down from $1.149 billion last year.
ANZ NZ's press release is here.
The ANZ group announcement is here.
The ANZ group press release is here.
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