ANZ today announced an unaudited cash profit of $1.85 billion for the three months to 31 December 2015. Earnings momentum continued in the quarter with cash profit up 5% compared to the average of the third and fourth quarters of the 2015 Financial Year (FY15). Statutory net profit was $1.6 billion.
Income grew at a faster rate than expenses, with expenses well contained; technology investment and wage inflation were largely offset by a 2.5% reduction in staff numbers.
The Group Net Interest Margin (NIM) was stable excluding the impact of the Markets business; there was a 2 basis points decrease including Markets.
Retail and Commercial. Retail in Australia and New Zealand continued to perform well led by further market share gains in home lending in key markets. Small Business in both markets grew strongly while Corporate Banking income was impacted by higher funding costs and competition. Wealth benefited from stable Life Insurance lapse rates which were offset by investment market volatility.
Institutional. Markets income increased 6% to $553 million. Customer sales comprised 56% of Markets’ total income in line with the average for both the second half and FY2015. Cash Management performed well and the Group further reduced lower returning assets in Trade and Lending. Institutional NIM improved reflecting actions around asset mix and deposit pricing.
The total provision charge for the first quarter 2016 was $362 million (individual provisions $319 million; collective provisions $43 million). The total Group credit charge will be a little above $800 million this half compared to current market consensus of $735 million1. Gross Impaired Assets for the half will be broadly similar to the second half of 20152 despite falling in the first quarter.
APRA Common Equity Tier 1 (CET1) ratio was 9.4%6 at 31 December 2015. Excluding the impact of the 2015 final dividend payment, the CET1 ratio increased 45 basis points compared to 30 September 2015 primarily driven by organic capital generation and assisted by the Esanda portfolio sale.
