Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Australia's ANZ posts record FY profit, investors fret over mortgage pressure

Published Nov 12, 2023 03:58PM ET Updated Nov 13, 2023 12:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo of the ANZ Bank is seen at Lambton Quay, in Wellington, New Zealand November 10, 2022. REUTERS/Lucy Craymer/File Photo
 
ANZ
+0.96%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NAB
+1.14%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
WBC
+0.27%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NABZY
+1.36%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Byron Kaye and Rishav Chatterjee

(Reuters) -Australia's fourth-biggest lender, ANZ, said on Monday surging demand for its institutional banking services propelled its annual profit to a record but an aggressive campaign to sell more mortgages flattened its margin, sending its shares lower.

As Australia's banks redirect focus away from their traditional earnings engine of mortgages, where interest rate increases have spurred competition, ANZ has benefited from an institutional payments platform that it says processes some of the world's biggest cross-border transactions.

That pushed net profit from the bank's institutional unit up 53% to overtake its retail unit, by dollar value, in the year to September, and helped the Melbourne-listed company grow overall profit 14% to A$7.4 billion ($4.7 billion), just missing a Visible Alpha consensus forecast of A$7.56 billion.

But analysts expressed concern about a faster-than-expected narrowing of profit margin from the bank's retail unit, the only one of Australia's so-called big four lenders that has persisted with offering cash handouts to lure mortgage customers looking for a cheaper deal.

Even as ANZ's institutional division grew its net interest margin (NIM) - the interest it collects on loans minus interest paid to deposit-holders - the bank's overall NIM declined 10 basis points to 1.65% in the six months to September, more than NIMs reported this month by rivals Westpac and National Australia Bank (OTC:NABZY).

ANZ shares were down 2.7% by midsession, against a 0.2% dip on the overall market, amid worries about whether the bank was sacrificing profitability for mortgage volume which had lagged in previous years.

The retail banking result "reflects the cost of ANZ growing above market during a period of heightened competition and possibly irrational pricing, notably in mortgages", UBS analysts wrote in a client note.

Barrenjoey analysts said the narrowing of retail banking margins "highlights further pain to come".

ANZ CEO Shayne Elliott denied forgoing margin to grow mortgages faster than the market, and challenged comments from other banks that have said they were intentionally slowing mortgage growth while competition eroded profit.

"The fact that others have stepped back from the market: I think there's a lot of people rationalising their loss of share," he said on a call with journalists.

"That's for them to answer, not me. All I know is we've been winning more customers than we have historically."

ANZ declared a final dividend of 94 Australian cents per share, up from 74 cents a year ago.

($1 = 1.5721 Australian dollars)

Australia's ANZ posts record FY profit, investors fret over mortgage pressure
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Derick Lim
Derick Lim Nov 12, 2023 9:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Typical bloodsucking leeches.....
Ernie Keebler
Ernie Keebler Nov 12, 2023 4:19PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
In other words they're screwing their customers out of interest they should be getting and keeping it for themselves typical bank
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email