ANZ Bank interim profits rise as restructure continues

Sydney (AFP) – ANZ Bank posted a 14.2 percent jump in interim net profit Tuesday as it continues to restructure its core operations with the sale of a spate of assets.

The Australia and New Zealand Banking Group’s result for the six months to March 31 came in at Aus$3.32 billion (US$2.5 billion).

Cash profit, the financial industry’s preferred measure which strips out volatile items, was up 4.1 percent at Aus$3.49 billion, helped by lower bad debts and a streamlining of the business.

The bank has been undergoing a restructure to shift its emphasis away from Asia and onto core assets, which has seen it sell retail and wealth management arms in six Asian countries.

During the half-year, ANZ also completed the sale of its stake in Shanghai Rural Commercial Bank and announced plans for a Aus$1.5 billion share buyback with the funds.

It has also announced that it would sell its life insurance arm to Swiss giant Zurich for Aus$2.85 billion.

Chief executive Shayne Elliott said the strategy was paying off.

“We have increased the allocation of capital to our higher performing businesses, delivered on our simplification promise by divesting non-core assets, reduced product complexity and continued to reshape our workforce so we can better respond to changing market dynamics,” he said.

“We are now benefiting from a more focused organisation with sector-leading capital and improving returns.”

The result comes with the country’s major banks — among the developed world’s wealthiest — under increasing scrutiny amid allegations of dodgy financial and life insurance advice and mortgage fraud.

The government launched a royal commission in February to investigate misconduct in the banking sector, with ANZ among those accused of poor advice and charging customers the wrong interest rates.

It is proving to be costly, with ANZ reporting that its dealings with the inquiry will cost about Aus$50 million this year in legal and other costs.

Elliott has said he hopes the royal commission will help restore trust in the banking sector.

ANZ again held its half-year dividend steady at 80 cents a share.

Among the other big banks, NAB reports its half-year results on Thursday with Westpac the following week. Commonwealth Bank, Australia’s largest, operates on a different reporting schedule.