ANZ first half profit jumps by 11 percent to $3.5b

ANZ has lifted its first half cash profit by 11 per cent following solid growth across its divisions.
Written by AAP , Contributor and  Chris Duckett, Contributor

The bank made a cash profit of $3.5 billion for the six months to March 31, up from AU$3.2 billion for the same period last year. Net profit was AU$3.4 billion, up 15 percent from AU$2.9 billion a year ago.

Chief executive Mike Smith pointed to solid growth in Australia and New Zealand and a strong performance at ANZ's international division.

"Our international business, particularly Asia, is firing on all cylinders with revenue and profits again growing strongly, and a sustained improvement in returns," he said in a statement on Thursday.

Profit from the bank's Australian division lifted five percent, thanks to strong growth in home loans and loans to small businesses. Meanwhile, profit from the New Zealand business lifted 21 percent after the bank grew market share and improved credit quality.

Profit from ANZ's international operations was up nine percent, while the global wealth division lifted profit by 11 percent.

"This is a good set of results," Mr Smith said.

"They demonstrate consistent progress with ANZ's long-term strategy to grow in our core franchises in Australia and New Zealand, to build a significant and profitable franchise in Asia Pacific, and to establish common infrastructure and processes that improve productivity and reduce risk."

Key to ANZ's new common infrastructure has been its AU$1.5b Banking on Australia program, first announced in October 2012, which aimed to improve customer experience and reduce branch footprint with the use of video-conferencing, smart ATMs, and mobile apps.

The bank revealed today more than half of its customers are labelled as "digital users", with 1.1 million active users of its banking app, goMoney, handling AU$78b in transactions via the app to date. The active user base is only marginally up on the 1 million users announced at this time last year.

The news was better for the bank's commercially aimed FastPay app, which has experienced a growth rate of 43 percent since its launch October 2012.

The company said that the Banking on Australia program is "building business momentum", reducing average monthly customer complaints by 9 percent, with increased training and the deployment of 1200 iPads increasing customer contact in its commercial team by 20 percent.

The commercial arm of the business has added 26,000 customers since this time last year, and the bank has jumped from fourth in customer satisfaction to first. Overall, the bank added 110,000 new customers in the past year.

The use of its 400 smart ATMs has moved 26 percent of the company's targeted transaction from the branch to the ATM.

For the company's New Zealand business, goMoney user numbers were up 96 percent, with smart ATMs responsible for lowering branch transaction by 11 percent.

"In New Zealand after several years of hard work our business is in a winning position. ANZ's move to a single brand and technology platform together with New Zealand’s economic recovery saw volume growth, improved productivity and lower provisions," Smith said.

ANZ's chief rivals, Commonwealth Bank of Australia and Westpac, have this week announced plans to introduce cardless ATM cash withdrawal services, with the new functionality set to be rolled out across the CBA ATM network by the end of May.

The bank announced a fully-franked interim dividend of 83 cents per cent, up from 73 cents a year ago.

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