ANZ Half Year Profits Take a Tumble

ANZ has reported a sharp fall in first half profit as its costs increased and it put aside more for the negative impact of the looming economic downturn.

The country’s biggest bank’s net profit for the six months ended March was $789 million, compared with $1.1 billion a year ago.

Lending and deposits and income from Kiwisaver funds all rose modestly, but its margins have been squeezed and its operating costs have risen sharply as it spent more on staff and systems to meet new standards imposed by the Reserve Bank and Financial Markets Authority.

The big hit comes from the extra $200 million it has put aside to cover expected loses and bad debts caused by the Covid-19 pandemic.

Chief executive Antonia Watson said ANZ had so far helped around 30,000 customers to the tune of $12 billion.

“We have helped thousands of businesses to hunker down by using financial strategies such as deferring loan repayments or increasing overdraft facilities in preparation for potentially further impacts in the near future.”

She said the bank was preparing for a higher-than-usual number of loan defaults.

ANZ said its local finances were a touch stronger than six months ago after the Reserve Bank deferred a rise in capital, while it had also saving by not paying a dividend to its Australian parent.

Source: rnz.co.nz Republished by arrangement.