ANZ's poor image allayed by 27pc gain

By Richard Braddell

WELLINGTON - A focus on cost reductions and adherence to the doctrine of economic value added (EVA) have seen strong improvement in ANZ's Australian and New Zealand earnings, although the New Zealand share of group earnings has slipped in line with the decline of the kiwi dollar.

In local currency terms, ANZ New Zealand's net profit for the year ended June was up 27 per cent to $252 million.

But in Australian dollars (in which the result was reported yesterday) net profit rose only 20 per cent to $A200 million and the contribution to group earnings fell from 20 to 14 per cent.

Unhindered by the vagaries of exchange rates, the Australian contribution rose 27 per cent to $A1.2 billion.

The results form part of what has been a bumper year for ANZ with the group profit of $A1.48 billion up from $A1.1 billion the year before.

Continuing restructuring has again shown through with the cost to income ratio (a measure of operating efficiency that was once one of the industry's highest) down another 4 percentage points to a respectable 54 per cent for the group and 59.4 per cent for New Zealand.

However, getting the financial side of the bank working well has not always been appreciated by customers.

In a recent Auckland University survey of the New Zealand banking industry, ANZ was the clear loser among the five major banks in terms of what customers thought of it.

On customer experience, the group's chief executive, John McFarlane, said satisfaction levels among corporate customers continued to run high, but a great deal of work was needed in personal and small business areas.