ANZ profits dive as bank builds virus war chest

[SYDNEY] Australia's ANZ Bank announced Thursday a 50 per cent dive in after-tax profits, as the lender set aside A$1 billion (US$655 million) to cover expected losses resulting from the coronavirus fallout.

The bank announced credit impairment charges of A$1.67 billion - with A$1 billion of that marked for the impact of coronavirus - slashing after-tax profits by 51 per cent in the first half of the financial year.

It also deferred a decision on its interim dividend amid ongoing uncertainty about the economic outlook.

ANZ chief executive officer Shayne Elliott described it as a "reasonable result" given the "tough trading conditions" even before the onset of the coronavirus crisis.

"While the health implications of this crisis are different, the reality is the financial sector has faced major shocks every seven to 10 years on average," he said.

Mr Elliott said the bank had taken a "conservative" approach in recent years - including focusing on owner-occupier home loans - and had entered March with "historically low" loan losses that held it in good stead.

ANZ chairman David Gonski said the bank had deferred a decision on dividends based on economic uncertainty and advice from the Australian Prudential Regulation Authority to all financial institutions.

"This was a very difficult decision and the board considered all options available as we understand the impact this will have on those shareholders who rely on dividends," he said.

The result comes just days after another major Australian bank, NAB, reported its earnings had shrunk by 25 per cent in the first half of the financial year.

AFP

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