While the ANZ Bank (ANZ) has joined Bendigo and Adelaide (BEN) and the Commonwealth Bank (CBA) in reporting a solid profit in its June quarter update, there was a small, but significant stig in the announcement made this morning.
The bank said in its report it made a cash profit of $5.2 billion for the nine months to June 30, up 8%.
The bank said the result reflects growth across the bank’s Australia, New Zealand and, particularly, Asian businesses.
Bu the ANZ also warned that "softness" in the third quarter to June 30, and the current quarter, would see profit growth closer to 4% in the year to September 30, which would be on the low end of its 4% to 5% target range.
So in effect it’s a mild downgrade for the full year profit figure.
The 8% rise is lower than the 11% rise (to $3.5 billion) in the cash earnings for the first half to the end of March.
The bank earned $1.73 billion in the three months to December 2013, so the latest quarter’s earnings were around $1.72 billion.
After adjusting for currency movements, cash earnings rose 6% over the nine months, the ANZ said.
ANZ 1Y – ANZ cash profit up 8%
The bank warned that third-quarter revenue trends were "a little softer" and interest margins had been squeezed slightly.
We saw something similar in the second half of the CBA’s results were revenue growth slowed sharply, impairments rose and profit growth at Bankwest, at the Institutional and the business banking divisions went backwards.
Despite the third quarter softness, the ANZ said it was on track to hit its previous guidance for revenue growth, but said it will be at the lower end of its 4% to 5% annual target range.
Chief executive Mike Smith said the bank was performing well, but also conceded sections of the Australian economy were "softer than expected."
"ANZ has continued to perform well with strong results in Asia and consistent performances in both New Zealand and Australia despite parts of the Australian economy being a little slower than expected," he said in a statement.
“Strong growth in Asia and in businesses linked to Asia continues to be a highlight. Our unique regional capability also helped us regain the number-one lead bank position in institutional banking in Australia and retain the number-one lead bank position in New Zealand."
The ANZ said its impairment charges in the third quarter fell to $191 million – down $120 million from the $311 million in the June quarter of last year. The Commonwealth saw a 9% rise in second half impairment charges.
