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ANZ group CEO says NZ lending up 1.4% in 9 months to June with deposit growth up 6.9%; Touts retail market share gain

ANZ group CEO says NZ lending up 1.4% in 9 months to June with deposit growth up 6.9%; Touts retail market share gain

Net interest margins at the country's biggest bank appear to have peaked due to competition for deposits and in business lending, ANZ Banking Group CEO Mike Smith says.

Smith made the comment in the ANZ group's quarterly trading update, released today. He also said ANZ NZ, including the ANZ and National banks, UDC Finance and fund manager OnePath, had seen market share gains, especially in retail banking whilst costs were continuing to be tightly controlled. For the nine months to June 30, Smith said the ANZ group's New Zealand operations recorded a 1.4% rise in lending and a nearly five times stronger 6.9% increase in deposits.

"The (New Zealand) business' focus on business simplification, including the planned move to a single IT platform, has positively impacted staff engagement, customer satisfaction and cost to income levels," Smith said. "As flagged at the half year margins appear to have peaked, impacted by competition for deposits and in business lending."

With its half-year results announcement in May - covering the six months to March 31 - the ANZ group said its "New Zealand businesses" net interest margin rose 12 basis points to 2.65% from 2.53% in the six months to September 30 last year, and a "New Zealand geography" net interest margin of 2.50% was up 10 basis points. At the time Smith told New Zealand margins had probably plateaued.

The group is currently moving its banking staff in New Zealand onto one information technology (IT) platform, National Bank's Systematics core banking system, nine years after the ANZ group bought National Bank from Lloyds TSB in 2003. Running behind schedule, the project was originally due for completion by late 2011. ANZ's now targeting completion by the end of 2012 at a cost of at least NZ$221 million.

Meanwhile, ANZ Group unaudited underlying profit for the nine months to June 30 rose 5.5% to A$4.5 billion with the Australia, New Zealand, and International and Institutional Banking units all recording rising income with the Wealth division's down.

Executive salary freeze staying in place

In a conference call with analysts' Smith said ANZ was seeing soft consumer spending in New Zealand and a slow economic recovery. However, he said there were signs of improving business confidence and the group's New Zealand business simplification programme was on track.

"In New Zealand we've seen revenue growth across each of our main businesses, (and) market share in retail has grown," Smith said.

The ANZ group has completed its wholesale fund raising for the 2012 financial year, and would again look to raise about A$20 billion next year.

"We also recognise that as senior executives we have to demonstrate that constraining costs is everybody's business and for many executives at ANZ, including myself, that means salaries will remain fixed in 2013 just as they were this year," Smith said without touching on bonuses.

He saw reiterated his view stated earlier this year that the world is making the necessary adjustments to deal with a "massive debt burden."

"The global economy is continuing a multi-year work out phase following the global financial crisis (GFC) where countries, businesses and consumers are all making adjustments that are necessary to deal with the excess debt. Obviously that's most acute in Europe but the situation there also has flow on effects for the world economy," said Smith.

"We're not running the business on a hope that the subdued lending environment will end any time soon. We aren't going to see the pre-GFC credit growth return any time in the near future and we are continuing to adapt the business to this environment."

(Update adds Mike Smith comments from analyst conference call).

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"We're not running the business on a hope that the subdued lending environment will end any time soon"....reality suggests 99% chance the euro will fold very soon...

Outlook.....the RBNZ will release NEW money to the banks on dirt cheap terms to bash down the value of the Kiwi$...and pork activity at the same time....fat chance of that.

Cash deposits will continue to rise as people rush to the least dangerous leaping on board the Titanic as it departed !

On the fiscal farce side of things...English has stopped talking of expected....those hopeful that the borrowing binge will end are in for a shock...expect 'govt borrowing' to increase and be justified by the argument that 'now is a good time'...(because there is an election looming)

013  post the US presidential electoral farce...expect to enter the greater depression....and for NZ the future looks like stuff a cow leaves behind....prices for food stuff at best will hold firm but food exports will not support the unproductive % of Kiwi peasant lifestyles...

Currrently we have a govt playing games with the bloated civil service..shifting deck sign yet of the upcoming payroll slashing...or the broad based redundancy moves....they are on the the 014 electoral farce of course.

Already the rush to sink capital into property in parts of Auckland hint at the future decline in the value of the Kiwi$....savers will be utterly rorted.

If this lot are still in the Beehive after Nov 014..we will see them quickly raise the pension age to 67 as from line with some sort of voter demand rigged inside the election as a referendum...

Meanwhile you should look to the retail trail of blood to spot the trends...and the collapsing govt revenue bag of stolen income.....

Heck..if we are really lucky a 'downgrade' by the liar agencies will see the mortgage rates rise sharply...won't that be fun!




Hope the sun came up today Wolly  (or is that solar mechanism a conspiracy against us peasants as well?)  .... 


Oh yeah...bright and hot it is...

You do have to wonder why don't you! not about the sun coming up....about the poor state of the economy and whether we might be better off ridding ourselves of all things political.

And if the parasites drop the cost of credit much more..will that bring the promised recovery in our time...or just a short spurt of make believe growth...

Brighter Kiwi are taking the scam offers to rid themselves of debt as fast as poss....plonkers are loading up on more debt.

IMF visit not far away...just ask Tweak!....delayed until after Nov 014 of course...just in time rate increases aimed at those happy to work for a parasite for their entire lives...this is the future facing young Kiwi.

To save is foolish when NZ govts plan on thieving away the value of the currency.....


Speaking of the sun , I just heard the funniest thing on radio ; the presenter was wondering why her solar panels weren't delivering the much promised electricity savings from her power bills ....


.... the energy efficiency guy tootled around to her house , and immediately noted that a neighbour's huge chimney was in a direct line , blocking off the sun from the solar panels ...


I'd have thought that the solar panel installation team would've noticed that chimney ....... until I remembered , this is Australia ! ..... cobberdiggermate ....


Must be up Darwin way Gummy!