Aug 09, 2016
Nine Months to 30 June 2016 Trading Update
Performance Highlights:
Basis of comparison: Comparisons are based on the 9 months to 30 June 2016 with the same 9 month period for the previous financial year unless otherwise stated. The results are unaudited.
Group |
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Retail & Commercial |
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Institutional |
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Credit Quality - Including June Quarter APS 330 |
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Capital |
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Specified Items – Capitalised Software
The ANZ 1H16 results outlined the impact of a number of items referred to as “Specified Items” which included changes to the application of the Group’s software capitalisation policy effective from 1 October 2015. These Specified Items are excluded from Adjusted Proforma.
As outlined, the higher capitalisation threshold and direct expensing of more project costs will result in higher software expense in the second half (Year to Date FY16 $126 million pre-tax which includes 1H16 $73 million pre-tax).
CEO Commentary
ANZ Chief Executive Officer Shayne Elliott said: “ANZ has now established a consistent focus on delivering the strategic outcomes outlined to shareholders in our First Half 2016 result.
“This includes a steady pattern of strong cost management outcomes and initiatives to rebalance our portfolio to improve capital efficiency and returns.
“There continue to be opportunities for growth in Retail and Commercial in Australia and New Zealand, and in Institutional Banking including business supporting trade and capital flows in Asia. For example, our leadership in launching Apple Pay and Android Pay in Australia has seen us attract significant numbers of new to bank retail customers and helped deepen relationships with our existing customers.
“The revenue environment for banking, however, is more constrained and this means a consistently strong focus on productivity and capital efficiency disciplines is now fundamental to the way we are running the business.
“Further good progress was also made on our broader strategic priorities: creating a simpler, better capitalised, better balanced bank; investing in attractive, winning market positions; leading a purpose and values led transformation to benefit our customers, staff and the community; and building capability to successfully compete in the digital age,” Mr Elliott said.
An interview with ANZ CEO Shayne Elliott discussing the trading update is available at bluenotes.anz.com.
Download the PDF for the full report.
Footnotes:
- Adjusted Proforma refers to Cash Profit adjusted to remove the impact of Specified Items (please refer to 1H16 Results disclosures including Page 16 of the Consolidated Financial Report & Dividend Announcement). In the nine months to 30 June 2016 there have been approximately $780 million of Specified Items impacts. Cash profit excludes non-core items included in Statutory Profit. These non-core adjustments mainly relate to accounting timing differences that will reverse through earnings in future periods. In the nine months to 30 June 2016 there have been approximately $100 million of after tax non-core adjustments.
- On an Adjusted Proforma basis.
- All NIM commentary is 30 June 2016 compared to 31 March 2016. Group NIM at 31 March was 201 bps.
- On an Adjusted Proforma basis. Page 60 of the Consolidated Financial Report & Dividend Announcement for 1H16 for Half Year outlines the impact of Specified Items on the Institutional Division.
- ASX announcement 8 August, 2016 “ANZ comments on APRA revised mortgage risk weight target”.