ANZ axes $800 bonus for thousands of staff as profit dips

ANZ has axed its $800 share bonus scheme for more than 5000 staff in New Zealand because of tougher times at the bank.

Managers told staff that 2016 had been a "challenging year" and that in an "environment of lower growth and lower returns, ANZ needed to reduce costs."

''With ANZ reducing its dividend paid to shareholders this year we decided it was only fair to review the allocation of shares we give each year to full-time employees,'' a spokesman in Auckland said.

In New Zealand recently the shares have been valued at $800 and could be sold after three years. The bank had about 8000 staff and those who had worked there for three years or more and were eligible for shares.

''Share offers are never guaranteed and we have allocated different amounts in previous years depending on the performance of the company and it will be looked at again in future,'' the spokesman said.

These shares are also on top of any annual pay rises and annual bonuses.

ANZ is New Zealand's biggest lender and last month announced a 9 per cent fall in annual earnings as margins got squeezed by more expensive funding and stiff competition for mortgage lending, and as it dealt with more bad debts.

Cash profit fell to $1.53 billion in the 12 months ended September 30 from $1.69b a year earlier.

Net profit dropped 13 per cent to $1.53b, with both the bottom line and earnings measure weighed on by restructuring costs and charges from capitalising the bank's software.

Earlier this year the bank announced the closure of several rural branches.

In Australia the bank posted an 18 per cent fall in cash profit to A$5.9b for 2016 and the share bonus scheme has been cut this year across the Tasman too.

Bloomberg reports the group's chief executive Shayne Elliott saying in Sydney last week the bonus stock allocation "was intended to share the benefit of good years."

He said of 2016: "It was not a good year."

During his address, Elliott voiced concern over "emerging signs of stress" in the Australian economy and overheating property prices in some parts of the country. He also reiterated the bank's intention to sell its non-core businesses, which would release capital.