ANZ doubles cash profit and settles in as third biggest home lender

One of Australia’s major banks has revealed its interim results for the 2021 financial year and its standing among mortgage lenders.

ANZ has doubled its cash profit and revealed it is the third biggest mortgage lender in Australia.

The major bank posted a cash profit of $2.98bn for the six months ending March 31, up from $1.32bn last year, with its chief executive Shayne Elliott saying the nation’s economic revival from the pandemic had been swift.

“Australia and New Zealand are emerging from the sharpest contraction in economic activity in a generation quicker and stronger than many believed possible,” he said.

“There is still significant uncertainty. You only need to look at how the pandemic is playing out overseas, as well as recent lockdowns, to realise how quickly the situation can escalate.”

ANZ chief executive Shayne Elliott has hailed Australia’s economic bounce-back. Picture: Attila Csaszar/AAP

ANZ’s 126 per cent jump in cash profit compared to last year’s interim result comes off the back of better performance in its retail and commercial banking divisions.

The bank recorded 92,000 new home loans from Australian customers worth $281bn, while its New Zealand arm added 42,000 Kiwi loans at a value of $90bn.

The Melbourne-based bank’s statutory profit for the first half of the 2021 financial year was $2.94bn, up 45 per cent on last year.

Mr Elliott said costs were 2 per cent lower and the bank’s ongoing simplification strategy would help it recover from the coronavirus pandemic.

“Australia retail and commercial had another good half, becoming the third largest home lender in the market,” Mr Elliott said.

ANZ doubled its cash profit compared to the first half of last year. Picture: NCA NewsWire/ Luis Ascui

“Deposits performed well, with retail and small business customers behaving prudently by building solid savings and offset balances through the half.”

The bank strengthened its capital position, increasing its common equity tier 1 ratio to 12.1 per cent.

The bank set aside $491m for loan defaults and bad debts, which is down on last year as the financial risk from the pandemic eases.

The bank also boosted its interim dividend to shareholders to 70 cents a share, but noted the pandemic was still fuelling uncertainty and would prompt the bank to retain a capital buffer of $4.3bn.

Mr Elliott said returning Australians from overseas and a lack of supply was driving up house prices, but would likely cool off when normal migration patterns resume as international borders reopen.

ANZ added 92,000 home loans in the six months ending March 31.

“We think that is 12 to 18 months away but we think that will have an impact on house prices,” he said.

“But house prices are not in uncharted territory yet.”

Mr Elliott conceded the bank would be looking at using online video for home loan applications, similar to what rival NAB has implemented.

The biggest uplift in home loans has been from first home buyers on owner-occupier loans, however investor loans are starting to rebound.

“Last year, it was all about owner-occupiers and investors weren’t really out there; they were worried about their tenants’ ability to pay rent,” Mr Elliott said.

“There is an increasing presence of investors in the marketplace, but not to the level there used to be.”

Originally published as ANZ doubles cash profit and settles in as third biggest home lender