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ANZ full-year profit plunges on expected virus fallout

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Australia's ANZ Bank announced on Thursday its post-tax profit had plunged 40 per cent as the lender set aside billions to cover loans unlikely to be repaid because of the coronavirus pandemic.

[SYDNEY] Australia's ANZ Bank announced on Thursday its post-tax profit had plunged 40 per cent as the lender set aside billions to cover loans unlikely to be repaid because of the coronavirus pandemic.

The bank reported profits of A$3.58 billion (S$3.45 billion) for the full year ending September 30, attributing the lower return to credit impairment charges of A$2.74 billion before tax.

A further A$815 million was set aside to cover expected virus-related lending losses in Asia.

The bank said about 119,000 home loans across Australia and New Zealand were deferred during the crisis, with roughly 40,000 remaining frozen as at October 15 and another 11,000 requesting an extension.

"We never could have forecast 2020, a year that started with devastating bushfires in Australia and unwound with the waves of a pandemic that continues today," CEO Shayne Elliott said in a statement to the Australian Securities Exchange (ASX).

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"While we still cannot predict its course, we remain confident we can deal with its impacts."

A dividend of A$0.35 per share will be paid out to shareholders, the bank said.

ANZ also announced a new climate change policy that includes a commitment not to finance new thermal coal mines or coal-fired power stations from 2030.

The decision drew the ire of Australia's conservative government with Resources Minister Keith Pitt telling the bank to "focus on home loans, not activism".

Australia is roundly criticised by environmental groups as a climate laggard, with corporations increasingly ahead of the government on action to reduce carbon emissions.

The company's shares dropped 2.45 per cent to A$18.69 at the start of trade.

AFP

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