SYDNEY–Shares in ANZ Bank rallied Tuesday after its first-half net profit rose 3 percent to AU$3.5 billion (US$2.7 billion), spurred by growth in both domestic and international operations. The Australia and New Zealand Banking Group’s cash profit, which strips out one-off and other items and is a measure often preferred by financial institutions, jumped 5 percent to AU$3.7 billion in the six months to March 31. The better than expected result came a day after fellow banking giant Westpac disappointed with a flat interim net profit of AU$3.61 billion, which sent its shares plummeting. ANZ shares soared as much as 3.75 percent before a decision by the central bank to cut interest rates to record lows took some wind out of its sails. It closed 2.65 percent higher at AU$34.12. ��ANZ has managed to grow its revenue while keeping its expenses flat, an outcome Westpac wasn’t able to do,�� said CommSec market analyst Steven Daghlian. CMC Markets chief strategist Michael McCarthy said the ANZ result was ��a welcome relief�� after Westpac’s worse than expected numbers. ��The growth is good for ANZ and also the broader market, as it casts Westpac’s result as one hit by its competitors rather than a broader industry slowdown,�� he said.
��Overseas earnings played a key role in lifting ANZ over its peer, and may become more of a strategic focus for bank boards. Domestic earnings also grew significantly, with NZ the major negative.�� National Australia Bank reports its interim numbers on Thursday. The nation’s biggest company by market capitalization, Commonwealth Bank, follows a June year-end compared with September for its three competitors. ANZ chief executive Mike Smith said he was pleased with the direction in which the country’s most Asian-focused bank was heading, while lifting the six-monthly dividend to 86 cents. ��This is a good, well-balanced financial performance with solid progress made in reshaping our business in response to the more challenging macro-environment,�� he said.
��Our domestic markets in Australia and New Zealand have again delivered strong growth and returns.�� Smith said the Melbourne-based bank was focusing on increasing home lending and loans to commercial businesses in Australia and New Zealand, while also working to enlarge its presence in Asia. ��We are managing expenses carefully. However, we have been prepared to accept a slightly higher run rate on costs in the short term where investment can deliver sustainable growth and returns,�� he said. ��We have directed those investments toward customer technology platforms, growing our geographic footprint in both Australia and Asia, and more customer-facing bankers.�� Geographically, ANZ businesses in the Asia-Pacific, Europe and Americas were the standout performer, with profit up 18 percent. ANZ’s Australian division lifted profit 8 percent thanks to continued growth in retail and business loans but its New Zealand operations managed only 1 percent profit growth.