ANZ banks $7.12 billion profit

ANZ has posted an enormous $7.12 billion profit, a 15 per cent increase on the previous year. But its boss is still warning against more regulation.

New brand identity emblem for ANZ Bank.

ANZ has lifted its full year cash profit by 10 per cent to $7.12 billion after a stronger second half.

The bank’s net profit of $7.3 billion was up 15 per cent from a year ago.

The profits were in line with expectations and also match the accidental figures released by the bank earlier in the week, which resulted in a trading halt in its shares.

The final dividend of 95 cents a share, fully-franked, was up 14 per cent on the interim dividend and brings the full year distribution to $1.78, up nine per cent.

Chief executive Mike Smith said the bank expected 2015 to present similar opportunities for ANZ, with a continuation of a stable and benign credit environment.

“In Australia and New Zealand the consumer sector remains relatively buoyant, however, we expect a gradual transition to business-led growth as business confidence improves,” he said. “Asia’s economies are set to maintain their position as the world’s best performing region.” Cash profit from Asia increased 25 per cent and revenue by 10 per cent.

ANZ Bank CEO Mike Smith for the bank's first half year result, expected to be another record profit.

The bank’s international business in Asia Pacific, Europe and America now accounted for 24 per cent of group revenues. Cash profits in those areas increased 20 per cent to $1.2 billion. The Australian region’s cash profit was up one per cent at $4.4 billion.

The net interest margin narrowed to 2.13 per cent, from 2.22 per cent, as strong competition for borrowers hits the big banks. Mr Smith used the profit announcement to repeat his criticism of a proposed increases in how much capital the big banks must hold to protect them in a crisis, expected as part of the Financial System Inquiry in Australia.

“While everyone benefits from a well-capitalised, well-managed banking system — consumers, shareholders and taxpayers — there is a real cost to the economy of ever-more restrictive regulation and policy settings,” he said.

“It is not in Australia’s interest for its financial system to be globally uncompetitive.

“While the banking sector faces a number of headwinds, we believe the environment, ANZ’s strategy, our business mix and the strength of its customer franchise positions us strongly and we are well-placed to deliver against our 2016 cost to income and returns targets.”

Originally published as ANZ banks $7.12 billion profit