ANZ New Zealand has revealed a significant leap in its full-year net profit as provision for bad debt almost halved, but the bank says economic recovery remains patchy.
Net profit from the bank’s New Zealand operations rose $673 million to $867 million for the year to September 30.
Underlying profits rose 40% to $882 million.
The result is part of a record $A5.13 billion annual result for its parent Australia New Zealand Banking Group, which was an increase of 51% on last year, -- largely fuelled by a drop in charges for bad debts, mostly from the business sector.
ANZ New Zealand chief executive David Hisco said the solid performance highlighted the steady turnaround in the economy and the dramatic fall in provision charges.
The bank wrote off $461 million for bad debts during the year, down 48% from the previous year. A charge of $131 million in the last six months was down 60% on the first half.
“However, so far the recovery hasn’t been consistent in all sectors. Customers have also remained cautious about taking on debt. Lending and deposit growth were flat with both personal and business customers continuing to deleverage,” he said.
“Our costs were well-managed which is becoming increasingly important in the lower- margin, lower-growth environment. Our focus on capital and prudent balance sheet management is ensuring we remain strong.
“While there’s no question 2010 has been a challenging environment to navigate, this year we’ve demonstrated that we have both the financial strength and long-term perspective to support our customers through the economic recovery. This sets us up well for the year ahead.”
Mr Hisco said he felt “relatively upbeat” about the outlook for the year ahead, having received a good feeling over the past six weeks.
“Although economic growth in New Zealand is likely to remain soft over the medium term, the Government’s focus on rebalancing the economy with a shift towards savings and exports is setting New Zealand on the right path.”