ANZ cash profit tumbles 62 per cent after a $1 billion coronavirus hit

The major lender has copped a $1 billion hit from the coronavirus pandemic and will not provide a payment to its shareholders.

ANZ will hold off paying shareholders an interim dividend after its first-half cash profit plunged 62 per cent on a $1 billion COVID-19 hit.

The big four lender on Thursday said it was deferring its first-half payout following guidance from prudential regulator APRA that banks and insurers should seriously consider doing so until the economic outlook is clearer.

A year ago it made a payment to shareholders of 80 cents per share.

The deferral comes as ANZ’s statutory net profit for the six months to March 31 fell 51 per cent to $1.54 billion on credit impairment charges of $1.674 billion – including increased credit reserves of $1.031 billion for COVID-19 impacts.

$ANZ- no int dividend! Decision deferred (see pic)
Dividends always paid in recent history (1987+) & only times cut:
1987/88: 1987 stockmarket crash
1991: The recession we had to have
2009: Global Financial Crisis
2016: Cash profit fell 18%
2020? The Corona Crisis#retirees😢 pic.twitter.com/jKHoKeHiw2

— Julia Lee (@JuliaLeeAU) April 29, 2020

The bank said valuation of investments in Asian associates was also impaired by $815 million during the half, largely due to the impact COVID-19. Cash profit plunged 62 per cent to $1.32 billion and operating income dropped 4.0 per cent to $8.89 billion.

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ANZ Chairman David Gonski said the decision to hold off on paying a dividend was not a reflection of the bank’s financial health.

He said ANZ had not received any concerns from APRA regarding capital levels.

“The board agrees with the regulator’s guidance that deferring a decision on the 2020 interim dividend is prudent given the present economic uncertainty and that making a decision at this time would not have been appropriate,” Mr Gonski said.

The major lender will not pay an interim dividend to shareholders. Picture: Mick Tsikas/AAP

“This was a very difficult decision and the Board considered all options available as we understand the impact this will have on those shareholders who rely on dividends.”

ANZ said it would “consider all factors” over the coming months and will continue to assess the evolving situation, including the severity of community lockdowns, before determining a final position on the interim dividend.

ANZ FIRST-HALF ROCKED BY COVID-19

* Operating income down 4.0 per cent to $8.89 billion

* Cash profit down 62 per cent to $1.32 billion

* Net profit down 51 per cent to $1.54 billion

* Interim dividend deferred