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Asia-focused ANZ Bank lifts annual net profit amid headwinds

Thursday, October 29, 2015 - 06:38
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Asia-focused ANZ Bank on Thursday said annual net profit increased three percent to A$7.5 billion (S$7.47 billion) but growth slowed from the previous year, underscoring the headwinds facing the sector.

[SYDNEY] Asia-focused ANZ Bank on Thursday said annual net profit increased three percent to A$7.5 billion (S$7.47 billion) but growth slowed from the previous year, underscoring the headwinds facing the sector.

Cash profit, which strips out non-core items and is favoured by analysts, was up just one percent to A$7.22 billion in the 12 months to September 30. This compared to a 10 per cent rise in the previous corresponding period.

Annual net profit for the year to September 30 2014 was up 15 per cent.

British-born chief executive Mike Smith, who has overseen a big push into Asia and is standing down in January, said it was a challenging operating environment.

"We are continuing to evolve our strategy and accelerate its execution to maximise value for our customers and for our shareholders," he said.

"There are significant opportunities for ANZ, however lower economic growth, intense competition, the growing cost of regulation and market volatility present headwinds for all banks."

The comments highlight the challenges facing incoming chief executive Shayne Elliott, amid a focus on boosting Asian returns that have dragged on the lender's domestic units.

He will also need to protect margins and mortgage market share in Australia at a time when some economists are predicting a housing slowdown.

"We have continued to see growth in our core customer franchises in Australia, in New Zealand and in key Asian markets, partly offset by the effect of macro-economic headwinds on the International and Institutional Banking Division," Smith added.

ANZ, which operates in 34 countries, said profit improved seven percent in its Australian division and three percent in New Zealand, but dropped two per cent in its international and institutional bank.

On Wednesday, fellow banking giant NAB lifted its annual net profit 19.7 per cent to A$6.34 billion. Westpac Bank reports its results next week.

Australia's biggest lender, the Commonwealth, works to a July-June financial year and announced a five percent rise in annual net profit to a record A$9.06 billion in August.

AFP