Australia’s ANZ posts record annual profit on resilient commercial banking


By Rishav Chatterjee

(Reuters) -Australia’s ANZ Group on Monday posted a record annual cash profit which fell slightly short of estimates as the bank diversified its operations in commercial banking amid higher interest rates and a tough housing market.

The country’s No.3 lender posted cash profit of A$7.41 billion ($4.51 billion) for the year ended Sept. 30, compared with A$6.50 billion a year earlier, missing the Visible Alpha consensus estimate of A$7.56 billion compiled by Citi.

“Earnings were a little shy of some estimates, which could keep a lid on the share price performance today,” said Tim Waterer, market analyst at KCM Trade.

“Nonetheless, the results show that the current era of high interest rates have been a boon for the top and bottom lines of the big banks in Australia from a margin perspective.”

ANZ, which is caught up in regulatory scrutiny over its $3.2 billion Suncorp Group’s banking business bid, has been expanding its operations in retail and commercial businesses.

ANZ intends to expand its commercial business with focus on its currency and payment sites while reducing costs, it said.

The banking group’s Aussie commercial business recorded 11% revenue growth over the year with lending rising to record high of A$62 billion.

Australia’s top lenders have been cashing in on their margins in an environment where interest rates have been hiked 13 times in just 18 months, helping them take advantage of the greater spread between the interest they pay to their customers and the profits they earn by investing.

ANZ declared a final dividend of 94 Australian cents apiece, up from 74 Australian cents apiece announced a year ago.

Net interest margin rose to 1.70% for the year from 1.63% a year ago.

ANZ, however flagged that the external environment will likely remain challenging adding that higher interest rates will impact economic activity as it sees “another year of cost-of-living pressures.”

($1 = 1.5733 Australian dollars)

(Reporting by Rishav Chatterjee and Roushni Nair in Bengaluru; editing by Grant McCool)

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