The ANZ has joined its fellow Melbourne-based bank, NAB, in reporting a solid first quarter as the bank industry continues to enjoy far better conditions than all the gloomy analysts and bankers had forecast.
Earnings rose despite a sharp surge in the bank’s credit charges, much of which relates to lending to businesses in Asia.
The ANZ revealed this morning in its first quarter trading update filed with the ASX that cash profit (unaudited) rose 4% to $1.85 billion. Statutory net profit was $1.6 billion.
That’s more than the $1.7 billion reported by the NAB yesterday.
The ANZ said income grew faster than expenses as business conditions softened.
That was helped by cutting 2.5% of the workforce and left the net interest margin stable in the quarter (the NAB’s rose), excluding its markets business. Including them, the NIM fell by just 2 points.
The news of the better thane expected update seems to have been anticipated by the market with ANZ shares up yesterday and on Monday.
They rose 1.9% on Tuesday to $23.27. The shares have fallen 17% so far this year and around 30% in the past year.
The bank said its credit charge for the six months to March 31 will be around $800 million, compared to market consensus of $735 million – a rise that will be looked at closely by analysts.
But that compared to the $510 credit charge revealed in the first half of 2014-15 – now that will be looked at closely by the market and red flags will be raised by some. That’s an increase of more than 50% half on half year, which will need some explaining.
