Australia and New Zealand Banking Group Limited (ANZ) today announced an underlying profit for the first half of 2009 of $1,908 million up 20% on the preceding half (up 4% pcp).
Including net impacts from one-offs and non-continuing businesses, statutory profit grew 4% to $1,417 million compared to the preceding half (down 28% pcp).
As previously foreshadowed, the Interim Dividend of 46 cents per share fully franked is down 26% on the 2008 Interim Dividend.
ANZ Chief Executive Officer Mike Smith said: “In a deteriorating global banking environment this is a creditable result, particularly given the effect of the economic slowdown on provisions in Australia and New Zealand and the other remediation and change issues we are managing.
“In this environment, we have to step back and look through provisions and restructuring. What’s clear is we have a diversified set of businesses that have continued to perform well, with strong revenue trends. On an underlying basis Australia delivered acceptable results, while Asia Pacific, Europe & America produced an outstanding performance doubling their profit. Our core Institutional businesses also performed well.
“At the same time, we have to take a realistic view of the impact of both the economic slowdown and financial system issues on the Bank. The action we took last year to significantly increase provision coverage was the right one and we have to deal pragmatically with the effect of continued volatility in global markets on the credit risk charge required for the credit intermediation trades.
“The expected slowdown in Australia and New Zealand is now playing out with the outlook for provisions in the second half likely to be somewhat more difficult than the first half and we expect that situation to continue through to early 2010.
“Given the environment, we are continuing to focus on four key drivers for the bank: maintaining a strong capital and liquidity position; anticipating the impacts of the economic environment by ensuring we have adequate provisions; systematically completing the remediation in parts of the business; and driving our strategic growth agenda to become a super regional bank in the Asia Pacific region.
“When I announced our strategic direction in December 2007 we set out a number of steps which together would deliver growth and out-performance and create a leading super regional bank. Despite the very difficult economic conditions we are making good progress in delivering against those aspirations while facing up to what have turned out to be significant legacy issues.
“Against the objectives we set for the first two years, we are on track with our scorecard.
“We are turning around Institutional, driving increased profit in Asia, and maintaining our high quality domestic franchises in Australia and New Zealand. Across the Group, we have introduced a more cohesive ‘One ANZ’ business model and established a strategic approach to cost management with revenue increasing faster than costs at an underlying level, while still selectively investing in growth.
“Globally, banks are operating in an extraordinarily difficult environment. However, these results demonstrate ANZ is making good progress with its strategy and is in a strong position to manage through the cycle, to continue to support our customers and has the capacity to take advantage of the opportunities now emerging,” Mr Smith said.