ANZ half-year profit down

Market volatility and other factors have seen the ANZ Banking Group report a 7 per cent decline in first half profit after tax of $1,963 million.

The company, which is currently the centre of attention as a result of the Opes Prime collapse, acknowledged its position stating that when non-core items were taken into account the profit before provisions growth was a solid 11 per cent but that this had been offset by a significant increase in credit impairment charges to $980 million, with the result that cash profit was down 14 per cent to $1,674 million and cash earnings per share was down 16 per cent.

Commenting on the result, ANZ chief executive Mike Smith said strong revenue growth had been a feature of the bank’s performance in the first half, helping deliver good growth in profit before provisions despite significantly higher funding costs.

Looking at divisional performance, the banking group said that investment and insurance products had performed well, with profit growth of 26 per cent, albeit that investment flows had softened in recent months.

Looking ahead, Smith said that the global environment remained challenging and there were early signs of a downturn in the ANZ’s domestic markets.

“Over the course of the first half, we have seen revenue momentum improve each month, and this gives us confidence for the year as a whole,” he said. “At the same time, we reduced the rate of growth in expenses in the first half. We have provided for all known exposures, although in the current environment it is more likely that higher levels of new problem loans will emerge than has been experienced in recent years.”