Asian Asset Sales and Cost Cuts Lifts ANZ to Profit

Source ANZ Bank

A sharp fall in charges for bad debts has seen a rebound in ANZ Bank's full-year cash profit, which jumped 18 percent in the year to $6.9 billion.

Statutory profit was $6.4 billion, up 12%.

In morning trade the Australia and New Zealand Banking Group (ASX: ANZ) share price is mostly flat at $30.14. ANZ shares fell 1.3% to $30.13.

"I mean, it's a big exposure for any bank so we watch it like a hawk", Elliott said, alluding to the bank's mortgage portfolio, which is worth $250bn.

Fewer products on offer for customers and staff efficiency has helped drive ANZ to a profit of $1.86 billion over the past year.

And while final and full dividends have been held at $1.60 and 80 cents a share respectively, there is now a suggestion (as some analysts have predicted) that shareholders could benefit from a buyback with the bank's capital meeting regulator requirements to be "unquestionably strong".

There were still questions around revenue growth in the industry at this point in the cycle, Elliott said, and ANZ was committing resources toward preparing for that.

"That's why we have been transforming ANZ, getting ready for that".

David Hisco, ANZ New Zealand chief executive, said the reduction in costs took it below the lender's 2010 levels, while at the same time maintaining high customer satisfaction levels.

"Although we had a strong business, the external environment was changing faster than we were and our customers, the community and our shareholders expected much more from us".

The bank said its net interest income (NIM) fell $223 million, which is said was largely due to a fall in the NIM of 8 basis points to 1.99 cents in the dollar from 2.07 cents.

This year the bank has sold off its Asia retail network to concentrate on institutional business in the region.

Cash profit was up 21 per cent compared to the year before.

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