Australian’s ANZ posts record annual profit amid higher interest rates; lifts dividend

Nov 13 (Reuters) – Australia’s ANZ Group Holdings (ANZ.AX) reported a record annual cash profit on Monday which slightly fell short of estimates while it bumped up its dividend as the bank continued to manage costs while operating in a high-interest rate environment.

The country’s No.3 lender posted cash profit of A$7.41 billion ($4.51 billion) for the year ended Sept. 30, compared with A$6.50 billion a year earlier, missing the Visible Alpha consensus estimate of A$7.56 billion compiled by Citi.

ANZ declared a final dividend of 94 Australian cents apiece, up from 74 Australian cents apiece announced a year ago.

ANZ said net interest margin, a closely watched measure that shows the amount banks take in interest payments minus operating costs, rose to 1.70% for the year from 1.63% a year ago.

The country’s top lenders have been cashing in on their margins in an environment where interest rates have been hiked 13 times in just one and a half years, helping them take advantage of the greater spread between the interest they pay to their customers and the profits they earn by investing.

The company also intends to grow its commercial business with focus on its currency and payment platforms while reducing costs.

The bank also ended the year with its provisions for potential credit losses higher than prior to the pandemic as it now holds more cash than ever before, its CEO said.

ANZ, however flagged that the external environment will likely remain challenging adding that higher interest rates will impact economic activity as it sees “another year of cost-of-living pressures.”

The results were in tandem with larger peers National Australia Bank (NAB.AX) and Westpac Banking Corp (WBC.AX), as both logged higher annual profits despite facing inflationary headwinds and higher competition in home-loan lending.

($1 = 1.5733 Australian dollars)

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