ANZ Group sees "a lot of upside" in New Zealand where the profitability of its business is recovering well from the lows of the second half of 2009 and the first half of 2010.It made the comment about the New Zealand business in an update for th
ANZ Group sees "a lot of upside" in New Zealand where the profitability of its business is recovering well from the lows of the second half of 2009 and the first half of 2010.
It made the comment about the New Zealand business in an update for the nine months to June 30 released in Australia.
Mike Smith, chief executive of the Australian parent, told an analysts' briefing that the New Zealand economy has stabilised. "There is now a clear recovery story," he said.
The Australian bank owns both the ANZ and National Bank of New Zealand banks and fund management business ING, which is being rebranded OnePath. It is the largest bank in New Zealand.
The New Zealand business has continued to focus on operational efficiency and on customer service, Mr Smith said.
"As the economy recovers our business is strongly positioned to benefit over the next year or two, which I think gives us a lot of upside there," he said.
The bank said costs were being well controlled and provisions were moderating, especially in the retail business in New Zealand.
"While the lagged benefit of repricing the fixed rate book has seen a small improvement in margins, head winds from higher funding costs, both for wholesale and deposits, remain significant," the bank said in comment on its New Zealand business.
The parent reported an underlying profit of $A3.6 billion ($NZ4.5 billion) in the nine months to June 30, up 26 percent on the same period last year.
Earlier this month Commonwealth Bank of Australia commented that its New Zealand unit ASB was earning lower margins on deposits in an extremely competitive market, but a move by customers from fixed-rate to higher margin floating-rate home loans was an offsetting influence.
