ANZ encouraged by NZ results in latest quarter

ANZ New Zealand, the country's largest bank, has announced a lift in profit in the December 2009 quarter compared with the September quarter, reflecting an emerging economic recovery.

The New Zealand branch of the Australia and New Zealand Banking Group said its underlying profit of $202 million in the December quarter was down 19 per cent on the same quarter in 2008.

"We are encouraged by the lift in profit in the December 2009 quarter compared with the September quarter, in line with signs of recovery in the broader economy following the recession," said ANZ New Zealand chief executive Jenny Fagg.

The bottom line profit in the three months to December 31 of $253 million was down 51 per cent from the previous year.

"A key improvement in the December 2009 quarter is the pronounced reduction in provisioning for credit impairment, which has decreased from $351 million in the September quarter to $151 million," Fagg said.

The $151 million figure was a 59 per cent increase on the same quarter in 2008.

"There is now evidence that the New Zealand economy has stabilised. As the economic recovery slowly gathers pace, it does offer the prospect of a significant improvement in ANZ's business performance over the next year or two," Fagg said.

A breakdown of the New Zealand earnings showed a 16 per cent decline in earnings from the institutional business in the December quarter from 2008. The institutional business had performed very strongly in the recession.

A breakdown of the New Zealand banking business showed earnings from the retail business were down just 1 per cent in the December quarter form the same quarter in 2008, while earnings in the commercial business were down 45 per cent.

ANZ New Zealand said it was well positioned to continue to support personal and business customers.

Reductions in fees across the bank's two brands, ANZ and National Bank of New Zealand, had saved customers $55 million on an annual basis.

Lending volumes were subdued. Gross loans and advances decreased to $96.65 billion from $99.12 billion in December 2008.

ANZ's Australian parent, Australia & New Zealand Banking Group, said underlying profit after tax for the period from October 1 to January 31 rose 16 per cent to about A$1.6 billion ($2.05 billion) from the same period a year earlier. Shares of ANZ rose 3.2 per cent during trading yesterday.

- NZPA, BLOOMBERG