Home lending by the bank rose by $9.3 billion to $99 billion over the year
ANZ New Zealand has seen a 44 per cent rise in its profit to hit $1.92 billion for the year to September 30.
The country’s largest bank saw its cash net profit rise 39 per cent to $1.907 billion compared to the previous year.
ANZ New Zealand chief executive Antonia Watson said the results reflected record demand in the housing market, a stronger-than-expected economy and a significant reduction in provisions the bank put aside last year.
Watson said that while many businesses that relied on tourists and overseas students were facing ongoing impacts of Covid-19 restrictions, particularly in Auckland where the hospitality industry is disproportionately affected by lockdown measures, the economy had fared better than the bank expected.
The ability of many New Zealand businesses to learn from last year’s lockdowns and adapt, and continuing strong global demand for our exports, has meant we were able to release $115 million of the credit impairment provisions we’d made previously into this year’s result, she said.
Home lending by the bank rose by $9.3 billion to $99 billion over the year.
Watson said high house prices continued to be driven by historically low interest rates and more demand for houses than are available. This demand is reflected in our financial results.
The bank’s operating income increased 2 per cent or $83 million to hit $4.132 billion while its expenses dropped 7 per cent or $129 million to reach $1.607 billion.
It put the lower expenses down to lower customer remediation and restructuring, one-offs in the prior period not being repeated and the sale of UDC Finance in September 2020.
It made a $32 million loss on the sale of UDC in its 2020 financial year.
Deposits at the bank increased 3.5 per cent while lending rose 6 per cent.
Watson said the full year result was strong given the Covid influenced economic circumstances. New Zealand experienced a rebound in economic activity following the 2020 Covid-19 lockdowns. Household and business confidence surveys recovered quickly and investment had picked up prior to the August 2021 outbreak.
She said: The Reserve Bank of New Zealand has projected rate increases over the next two years. However it is likely uncertainty will linger as long as Covid-19 is a threat.