ANZ Bank beats profit estimates as home lending picks up

AUSTRALIA & New Zealand Banking Group reaped the rewards from a pick up in business lending and an increase in momentum for home loans, helping it to top analyst profit estimates.

Cash earnings from continuing operations rose to A$6.52 billion (S$5.95 billion) in the 12 months through Sep 30, compared with A$6.20 billion a year earlier, according to a statement on Thursday (Oct 27). That beat the average expectation for A$6.29 billion from 11 analysts surveyed by Bloomberg.

Lenders in Australia and New Zealand are benefiting from tighter central bank policies as borrowing costs for mortgages climb more than deposit rates. Still, with house prices falling and energy costs increasing, investors are watching for signs of stress from borrowers.

“There is uncertainty ahead, however we have the business in good shape to withstand volatility,” chief executive officer Shayne Elliott said in the statement.

Elliott also said work to improve momentum in Australian home loans was paying off, “with application times back in line with peers”.

Despite strong inflationary pressures and economic uncertainty heading into 2023, the bank signalled it was willing to spend big on growth in July with a A$4.9 billion deal to acquire the banking arm of Suncorp Group, a smaller peer with a customer base in the state of Queensland. BLOOMBERG