ANZ New Zealand, the country's biggest bank, has posted a small drop in half-year profit and its CEO says "geopolitical headwinds" may styme momentum in the second-half of the bank's financial year.
ANZ NZ's net profit after tax for the six months to March 31 fell $18 million, or 1%, to $1.259 billion from last year's record high of $1.277 billion. The bank attributes the drop to lower gains from hedging interest rate and foreign exchange risks.
The bank's net interest margin, the difference between what it borrows money at through the likes of deposits and what it lends it out at, fell five basis points year-on-year to 2.55% with "deposit margin compression" cited as the key reason.
CEO Antonia Watson says ANZ NZ's carefully watching the conflict in the Middle East, especially the combination of inflation, interest rates and fuel costs.
"We continue to hold credit impairment provisions as a safeguard against future uncertainty, and our capital position, an important measure of a bank's financial stability, remains very strong," she says.
"Events in the Middle East are a reminder of how quickly global shocks can ripple through our economy and undermine what remains a fragile [economic] recovery."
"Current geopolitical headwinds may curtail momentum in the second half of the year," Watson says.
Nearly half home loan borrowers well ahead on repayments
Watson says more than 44% of the bank's home loan customers are ahead on repayments by at least six months, and 48% have a savings buffer of at least $5,000.
For the March half-year ANZ NZ recorded a $22 million credit impairment charge versus a release, or write-back, of $5 million in the March half last year.
Watson says ANZ NZ has a total credit impairment balance of $805 million, and total regulatory capital of more than $19 billion.
The bank's half-year operating income rose 5% to $2.669 billion, and its operating expenses fell 1% to $890 million. Its cost-to-income ratio fell to 37.3% from 38.5% year-on-year.
Figures released by the ANZ Banking Group, ANZ NZ's Australian parent, show NZ geography full-time equivalent staff numbers fell 162 year-on-on year to 6,675.
ANZ NZ says net loans grew 2% over the six months to March 31 to $143.205 billion, and customer deposits increased 3% to $118.591 billion. Housing lending reached $118.9 billion.
The ANZ NZ press release is here, and the ANZ Group presentation is here.
More to come.
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