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ANZ Bank Profit Stagnates Amid Low Rates, Customer Remediation
ANZ Bank Profit Stagnates Amid Low Rates, Customer Remediation
31 Oct 2019, 11:24 AM IST
(Bloomberg) -- Australia & New Zealand Banking Group Ltd. profit was little changed as the lender faced a slowing economy and higher customer-compensation costs.
(Bloomberg) -- Australia & New Zealand Banking Group Ltd. profit was little changed as the lender faced a slowing economy and higher customer-compensation costs.
- Cash profit from continuing operations was A$6.47 billion ($4.46 billion) in the year ended Sept. 30, compared to A$6.49 billion the year before, the Melbourne-based lender said Thursday.
Key Insights
- “This has been a challenging year of slow economic growth, increased competition, regulatory change and global uncertainty,” Chief Executive Officer Shayne Elliott said.
- While the bank maintained its final dividend at 80 cents a share, investors will get less of a tax benefit, with only 70% of the payout franked.
- The bank’s bad-debt charge rose 16% to A$795 million, and the bank said it remains cautious about the outlook for housing debt, given credit losses remain “at historically low levels.”
- Return on equity, a key measure of profitability, fell 10 basis points to 10.9%. Record low interest rates and intense competition will continue to impact profitability, Elliott said.
- Margins were squeezed by the entrenched low-rate environment, with the bank’s net interest margin shrinking again to 1.76%. That’s a far cry from margins of well over 2% ANZ had grown accustomed to in the previous decade.
Get More
- For more detail on ANZ Bank’s results, click here
- For more on what analysts expect for bank earnings season, click here
- Clean-Up Bill Mounts for Australian Banks With ANZ Charge
To contact the reporter on this story: Emily Cadman in Sydney at ecadman2@bloomberg.net
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Peter Vercoe, Edward Johnson
©2019 Bloomberg L.P.
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