Australian & New Zealand Banking Group's local unit lifted first-half profit 7 per cent as it grew its loan book and booked smaller charges on bad loans.
Net profit rose to $655 million in the six months ended March 31 from $615 million a year earlier, ANZ New Zealand said in a statement. Cash profit, which excludes unrealised movements in financial instruments, climbed 14 per cent to $699 million.
The gains came despite a 4 per cent decline in net interest income to $1.3 billion, with tighter margins stemming from lower returns from capital and "rate insensitive deposits in a low interest rate environment." The bank's provision for credit impairment more than halved to $43 million in the half, while operating expenses shrank 11 per cent to $765 million.
The bank is underway with the biggest change on the New Zealand lending scene since ANZ Bank bought National Bank from Lloyds TSB in 2003 for $5.7 billion. It has been scrapping the National Bank brand, shrinking the group's network of branches and cutting out duplication ahead of relinquishing the rights to use the Lloyds black horse logo in 2014.
"While the revenue environment is still subdued, our simplification programme has helped us lift productivity and reduce costs and has positioned us to better leverage our scale to support future earnings growth," chief executive David Hisco said in a statement.
