ANZ Bank logs record interim profit


ANZ chief executive John McFarlane says the bank is performing well at a time of higher global risk

By Geoff Hiscock
CNN Asia Business Editor

SYDNEY, Australia (CNN) -- Australia's big banks look to be heading for higher earnings after the ANZ Bank opened the half-year reporting season Friday with a record interim profit of Aust $1.05 billion ($571 million).

The result, covering the six months to March 2002, was up 17.3 percent from the previous period last year. Earnings per share were up 18.8 percent to 66.3 Australian cents.

Investors responded with enthusiasm, pushing ANZ shares to a record close of A$19.47, up 2.64 percent from Thursday's close.

The broader market was up marginally, with the benchmark S&P/ASX200 ending 0.16 percent higher.

The ANZ is the smallest of the big four banks, behind the National Australia Bank, the Commonwealth Bank of Australia and Westpac Bank.

The NAB and Westpac will report their interim results early next month, while the CBA, which works to a June 30 close, will report in August.

All are benefiting from the strong Australian economy, where growth this year is tipped to reach about 3.7 percent. But overseas influences are continuing to bear on them.

Challenging environment

ANZ chairman Charles Goode called the bank's performance a good one in a challenging environment.

Chief executive John McFarlane said that in contrast to the previous economic cycle, the bank was showing a capacity to perform well in difficult economic circumstances, at a time of higher global risk and in an environment of major corporate collapses.

Last week ANZ formed a $2 billion funds management and life insurance joint venture with Dutch financial group ING.

MacFarlane said the partnership would take ANZ "into the big league" in funds management in Australia and New Zealand.

Third-ranked Westpac, which announced its own funds management deal this week with the purchase of the $5.5 billion (A$10.2 billion) Rothschild Australia Asset Management fund for $175 million (A$323 million), is also tipped to deliver a result of more than $545 million (A$1 billion-plus) when it reports next Thursday.

NAB looking for earnings growth

Australia's biggest bank, the NAB, will report on May 9. Earlier this month it said it would cut more than 2000 jobs over the next 18 months as part of a review designed to lift earnings per share by 12 percent in the 2003-04 business year.

The NAB's performance had been under a cloud since announcing it lost almost $2.3 billion at its U.S.-based HomeSide Lending unit last year.

It sold HomeSide for $1.9 billion in December, after unveiling a 36 percent fall in net profit to $1.06 billion (A$2.08 billion) for the year to September 2001.

CBA, the No. 2 bank by market capitalization, reported an operating profit of $1.22 billion (A$2.26 billion) last August for the year to last June 30, and said in November it was on track for double-digit growth in 2001-02.