Full year profit
Australia and New Zealand Banking Group Limited (ANZ) today announced a profit after tax of $3,319 million for the 12 months to 30 September 2008, down 21%. Cash profit* of $3,029 million was down 23%.
The full year dividend has been maintained at 136 cents per share fully franked.
Underlying revenue* grew 12%, with lending growth for the year of 16% and growth in deposits and other borrowings of 21% highlighting an increased reliance on AA-rated banks during the global financial turmoil, the relative strength of the regional economy and the quality of ANZ’s franchise.
The results were impacted by a $1.4 billion increase in credit impairment charges on lending to $1.9 billion along with a $0.7 billion charge for credit risk on derivatives. The collective provision has been strengthened by $829 million to sit at over 1% of credit risk weighted assets providing a strong position against the deteriorating global credit environment and softening economic conditions. The increase in the individual provision charge to $1.1 billion was driven principally by a small number of large single name exposures in the Institutional portfolio.
Net interest margin declined 18 basis points impacted by the dislocation in global credit markets , partly offset by actions taken by ANZ to recover margin losses incurred in the first half.
Operating expenses* grew 10% year on year reflecting continued substantial investment in the Asia Pacific business, remedial work in the Institutional division, lower than normal spend in the first half of 2007 and the full year impact of prior period investment in the Personal division.
ANZ Chief Executive Officer Mr Mike Smith said: “The solid underlying result shows the strength of the Australian banking system and highlights ANZ’s ability to weather an extremely challenging year. We have maintained our dividend, provided security and confidence for our customers and worked hard to meet community expectations with responsible, sustainable banking services.