Online readiness costs ANZ $41m

By RICHARD BRADDELL

ANZ New Zealand chalked up a net $A31 million ($41 million) in tax-paid abnormal costs in the September financial year, mostly in repositioning itself for the online economy.

The disclosure was made in the ANZ group accounts released yesterday, in which the bank posted a bumper 21 per cent jump in net profit before abnormals to $A241 million, from $A199 million last year.

The result would have been even better but for its translation from New Zealand currency, which declined 5.7 per cent against its Australian counterpart during the year.

In New Zealand dollars, the bank would have made an annual profit of $321 million before abnormals and $280 million after.

ANZ New Zealand's managing director, Murray Horn, said the "terrific number" reflected the hard work of everybody in the bank.

He said the high abnormals figure reflected investment in getting the bank and branches on to the internet and efforts to streamline processing, as well as repositioning branches to better suit changing demographics.

While the bank was going online, the substance of the business remained unchanged.

"We will do what we've always done a hell of a lot better because of the internet," Dr Horn said, although he conceded there was still much detail to sort through in improving customer contact.

'Retail is detail."

In common with other Australian-controlled New Zealand financial institutions, ANZ has made a disproportionately high contribution to the group profit even though its costs were proportionately higher.

Despite an asset base equal to 12.5 per cent of average assets, ANZ in New Zealand contributed 14 per cent of the group result.

The group yesterday announced a $A1.75 billion net profit for the September year, up 18 per cent from $A1.5 billion in 1999.

The cost-to-income ratio, a measure of operating costs and efficiency, fell to 54.9 per cent from 59.4 per cent the previous year, but was still higher than the group average of 51.7 per cent.

ANZ's strong result owes much to 11 per cent growth in lending in New Zealand dollar terms, while expenses rose only marginally.