On the face of it the ANZ’s first quarter trading update showed a bank doing well, perhaps better than its peers like the Commonwealth (CBA) and the National Australia Bank (NAB).
CEO, Shayne Elliott sounded more upbeat in comments in this morning’s trading update, and some of the figures seem to support that.
But the actual report was heavily qualified as the bank reshuffles assets, especially in Asia and New Zealand, takes losses and profits into the accounts, and provides for bad debts in its various businesses (which showed something of an improvement after the blowout a year ago).
The ANZ said its statutory net profit was up 8% to $1.6 billion, while it cash profit jumped 31% to $2 billion, (with the “adjusted proforma” figure up 20%, with the figure not given). The profit before provisions was up 17%, (with the “adjusted proforma” up 9%, figure not given).
The ANZ said its revenue rose 7% in the quarter – again no figure was given.
The group net interest margin “declined several basis points” (figure not given, like the NAB in its update 10 days ago).
The ANZ said the result “benefited from a good performance in Australian and New Zealand retail and institutional”.
In the statement this morning, ANZ CEO Shayne Elliott said: “The first quarter saw a positive start to the year. There was further momentum in executing our strategy to build a simpler, better balanced and fairer bank that more consistently meets customer expectations, and delivers improved shareholder returns.
“Our early progress in transforming ANZ is providing capacity to invest in new initiatives that provide a better experience for customers. Our ability to deliver these outcomes for customers while maintaining good earnings momentum has been supported by strong productivity gains and improved capital efficiency.
“Our key customer businesses delivered good outcomes. Retail and Commercial in Australia and New Zealand again performed well. Highlights include market share gains in customer deposits and Australian home lending, and further gains in new-to-bank customers driven by the success of ApplePay and AndroidPay. Institutional Banking delivered pleasing results in Australia and Asia. This has seen us manage the revenue impact of initiatives to improve capital efficiency and returns.
“We also saw progress with a strong organic capital generation performance. Together with the capital benefits from the sale of minority investments and non-core businesses, this leaves us in a very strong capital position ahead of domestic and international regulatory changes. Once the regulatory environment is clearer, we will be in a position to consider what capital flexibility this provides us.
“The outlook on provisions is also a little more positive. It is still too early to be definitive about the year as a whole however the first quarter together with our experience during first six weeks of the second quarter suggests the credit environment is marginally better than we expected at the time of our 2016 Full Year result which was for the provision charge in 2017 to remain broadly the same as a percentage of gross lending assets.
“Overall we have seen good progress in the first quarter. Clearly though, there is still a great deal to do to sustain this progress in a low growth environment and to deliver a winning proposition that meets our customers’ rapidly changing needs,” Mr Elliott said.
