ANZ New Zealand, the country's biggest bank, says annual profit fell 7% as its net interest margin fell, loan impairments rose and hedging activity hit the bottom line.
ANZ NZ's September year net profit after tax fell $173 million, or 7%, to $2.359 billion from last year's record high $2.532 billion.*
Total operating income rose 3% to $5.302 billion with net interest income also up 3 % to $4.586 billion. Operating expenses rose 9% to $1.982 billion with a provision included for the Credit Contracts and Consumer Finance Act class action High Court case ANZ NZ lost, but is appealing. The bank says it faces a maximum potential liability of about $125 million stemming from the case.
Loan impairments rose to $42 million compared to a release of $25 million last year.
Meanwhile, the bank said annual returns from economic hedges used to manage interest rate and currency risk dropped to $53 million from $163 million.
The bank's net interest margin, the difference between what a bank borrows money at through the likes of deposits and what it lends it out at, fell seven basis points to the still high 2.52%, with the drop attributed to "'competitive pressure in the lending market."
ANZ NZ said lending and deposits increased 3% and 4% respectively.
*ANZ NZ reported different net profit after tax figures in its general disclosure statement, with profit down $181 million, or 7%, to $2.533 billion.
ANZ NZ's press release is here.
The ANZ Group press release is here, the ANZ Group major release is here.
More to come.
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