ANZ New Zealand is boasting a $2.26 billion cash profit for the last 12 months to September 30, 2023 – but is warning of potential tough times ahead for some customers.
The news comes after last week BNZ posted a net annual record of more than $1.5 billion, and Westpac $963m.
"The year was very much a game of two halves; the good performance of the bank in the first half of the 2022-2023 financial year reflected the tailwinds of the Covid fiscal stimulus in the economy together with a series of rapid increases in the official cash rate," chief executive Antonia Watson said.
“But in the second half of the year our performance slowed due to the more difficult environment New Zealand is entering. However, we’re a well-managed, resilient business and remain well placed to support our customers and the New Zealand economy as we enter more challenging periods."
The bank's profit is up 10% on last year - but is seeing an increase in the number of customers falling behind on payments by 90 days or more. (Source: 1News)
Despite the $2.26 billion net profit after tax, ANZ said it is closely monitoring how customers were coping with tough financial times and were seeing an increase in the number of people falling behind on payments by 90 days or more.
Watson said, as a result, ANZ had increased the amount put aside for potential bad debts by $144 million, taking total credit impairment provisions to $857 million.
In the past 12 months, the bank had contacted over 290,000 customers identified as most at risk of financial stress to offer reassurance and support.
"The majority of our home loan customers have moved onto higher interest rates, and most have adapted well. A third of home loan accounts are ahead by six months or more. But around 34 percent are on rates lower than five percent with around a third of those rolling onto higher rates over the next six months."
She said ANZ had worked hard to support customers as interest rates and cost of living pressures continued to rise.
“Strong, well-capitalised banks act as a shock absorber through challenging economic conditions. This means we’re still well positioned to meet the housing, business and trading needs of the country.”
The bank provided $19.3 billion in new home loan lending.
ANZ's revenue for the year was $5.13 billion, remaining broadly flat in the second half.
Expenses for the year were up $13 million, an increase of 1%, driven by inflationary pressures on staff and vendor costs, offset by lower project spend due to the completion of project work on the RBNZ’s new outsourcing policy.
The bank's statutory net profit after tax was down 7% to $2.135 billion.
A 'difficult year ahead'
Watson said the bank was prepared for a potentially difficult year ahead, with the new government facing several fiscal challenges and central banks around the world still trying to tame inflation.
“New Zealand is probably headed into tougher times. Inflation is expected to remain above the Reserve Bank’s target range, interest rates will likely be higher for longer and unemployment is expected to rise.”
Watson added the bank expected to see more stress among businesses and mortgage holders.
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