August 20, 2010
ANZ market update - nine months to 30 June 2010 (PDF 36kB)
Business momentum continues, provisions trend lower in 3rd quarter.
In a market update today ANZ reported an unaudited underlying profit after tax1 for the nine months to 30 June 2010 of approximately $3.6 billion, 26% above the prior corresponding period (PCP) in 2009.
Momentum evident during the first half of FY2010 was maintained in the third quarter with profit after tax of approximately $1.3 billion up 37% PCP driven by modest growth in business earnings and reduced provisions despite lower Global Markets income and USD/AUD exchange rate impacts.
Key Performance Metrics
- Profit before provisions (PBP) up 5% PCP to $6.5 billion.
- Income grew 9% PCP to $11.6 billion. ANZ has continued to invest for growth, particularly in Institutional and in Asia. Revenue/expense jaws were positive 2% YTD excluding acquisitions and lower Global Markets income but negative 5% YTD including both factors.
- Global Markets income, while lower (down 14% PCP to $1.4 billion) than the exceptional levels achieved in 2009, reflects an underlying CAGR of 25% pa since the start of 2008.
- Group margins (excluding Global Markets) have increased modestly but growth is slowing, with higher funding costs and intense competition especially for deposits, largely offsetting the flow-through of re-pricing in prior periods in New Zealand and Institutional including product mix impacts.
- Credit quality continues to improve. The provision charge of $1,440 million is 34% lower than PCP.
- Group lending growth was up over 3% PCP (4% FX adjusted) reflecting the transition of assets acquired from the Royal Bank of Scotland (RBS) and growth in Australian Retail (particularly Mortgages).
- Group deposit growth was up 8% PCP (9% FX adjusted) primarily driven by Australia Retail and Asia Pacific, Europe and America (APEA) including the impact of deposits transitioning from RBS.
- Third quarter income was up around 5% on quarter two, with PBP around 2% higher. Provisions are tracking almost 38% lower than the average run rate for the first half.
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