ANZ New Zealand posts a half-year profit of $NZ962m
ANZ New Zealand posted an interim cash profit of NZ$962 million which is up 42 percent from the previous corresponding period, reflecting a strong home lending market and a significant drop in impairment charges.
Expenses dropped 8 percent due to lower personnel costs, a series of simplification initiatives, and the sale of UDC Finance last September.
As at 31 March 2021, the ANZ Bank New Zealand remains well capitalised with a Reserve Bank of New Zealand total capital ratio of 15.9 percent up from 14.4 percent recorded in September 2020 when the lender posted its annual results.
ANZ NZ chief executive Antonia Watson said that while the full impact of Covid-19 on the New Zealand economy had yet to play out, sectors such as housing, construction, and agriculture had proven resilient during the crisis.
“Across the economy, businesses have generally fared better than we expected so we’ve been able to release around 25 percent of the additional credit provisions we had put in place since the start of the pandemic,” she said.
Watson added while there’s room for optimism, the impact on the economy is uneven.
“Sectors that relied on overseas visitors, such as education, hospitality, and tourism, have been disproportionately affected and we’ve seen first-hand the challenges facing our customers in those industries.
Recovery some way off
In her view, a full recovery is still some way off. Economic confidence will take time to be restored she added as residual impacts of the pandemic are felt. “Banks have an important role in helping New Zealanders through the recovery, and ANZ NZ is playing its part - working with the government to help business and retail customers manage their cash-flows and borrowings during the pandemic.
As for New Zealand’s white-hot housing market, she explained that ANZ NZ was the first bank to require a 40 percent deposit from residential property investors as a step to bring balance to that market. “It’s in everyone’s interests for residential property prices to be sustainable long term, and for homeownership to be accessible to as many people as possible,” she said.
Home lending increased NZ$5.8 billion over the six months to 31 March 2021.
Watson confirmed the bank’s continued development of the New Zealand sustainable debt market with several innovative transactions including the first 30-year green bond for Auckland Council and the inaugural green bond for Mercury, the energy supplier.
She also recently confirmed support for the Aotearoa Pledge, an initiative aimed at increasing the supply of affordable housing in partnership with Community Finance, a lending platform that was set up to support community housing projects.