World News – UA – ANZ Bank’s annual profit plunges 42% to $ 3 76b

ANZ Bank said cash profit fell 42% to $ 3.76 billion for the year ending Sept. 30 as COVID-19 caused it to increase its provisions against loans that could deteriorate as borrowers struggle to recover from the impact of the virus

The bank recorded a credit impairment charge of $ 2.7 billion pre-tax for the full year, $ 2 billion more than a year ago The bank still has 61,000 deferred home loans in Australia and New Zealand, up from 108,000 as of July 31, and another 10,000 business loans frozen from high of 23,000

The total provision for the second half was $ 1.1 billion, lower than the $ 1.67 billion raised in the first half, as the economy begins to recover from the crisis

Shayne Elliott, CEO of ANZ: « The events of the last 12 months make it difficult to predict the course of the next year » Claudia Baxter

Its strong balance sheet has enabled ANZ to distribute some profits to shareholders: ANZ will pay a final dividend of 35 ¢ per share, fully franked with no discount for its dividend reinvestment program, after paying a 25 ¢ interim dividend in May Analysts expected a slightly higher payout before the bank announced further write-downs earlier this week, with APRA’s order to limit dividends to no more than 50% of profits still in place

« While our immediate focus has been to help clients, we have also taken steps to protect the interests of our shareholders by maintaining our strong capital position, tightly managing costs and strengthening credit reserves. , while managing to pay a prudent dividend without diluting their holdings, ”said Shayne Elliott, CEO of ANZ

Net interest margin – a key driver of income – slips to 163 percent from 175% as official interest rates tighten

Return on equity fell to 62 percent, from 109% a year ago, but common stocks’ Tier 1 capital ratio – the key measure of strength – was 113 percent. cent, just 01 percentage point lower over the year

ANZ said growth in homeowner home loans was above market average or the ‘system’ and deposits remained high as cautious customers decided to save more

Evans and Partners analyst Matthew Wilson said the result was in line with expectations and the bank was pulling all the levers at its disposal to protect profits in the COVID-19 environment

« Flooded with RBA liquidity and crippled by very low interest rates and a flat yield curve, ANZ is doing its best to control what it can, costs and non-income. interests « 

ANZ has warned investors that the ongoing pandemic has « increased estimation uncertainty » in its financial statements « The ramifications of COVID-19 remain uncertain and it remains difficult to predict the impact or duration of the pandemic « , he declared

The results provided new details on the critical issue of deferred loans While around 95,000 of its one million home loan clients were granted a deferral at the highest level, the amount of frozen loans continued to rise. decrease and fell 10% per month

ANZ retail bank manager Mark Hand said the bank does not have the same problem as other banks where offline customers give them the silent treatment or the ‘ghosts’ , a problem that has affected up to one in five frozen loans

« We haven’t had a big problem with ghosting so it’s sure the customers you call don’t answer the phones the first time you call – they have plenty of other things to do in their room. life, ”said M Hand

« But what we’re seeing is you email customers, you write to them, you call them, some proactively call us But for us it’s only about 3% customers who were trying to get in touch with « 

ANZ said that as of October 15, there were 55,000 accounts for which six-month postponements had been made Of this total, 79% returned to full payment, 20% requested a new postponement and 1% have restructured their loan or requested additional help

Of the remaining deferrals still active, ANZ said that « half have a savings ‘buffer’ of at least three months or more and a quarter have made at least one payment during the deferral »

Of the 23,000 deferred business loan repayments, ANZ said 15,000 were completed as of Oct. 15, and of those 1,600 had received a four-month extension – and 60% of those were from Victoria

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The results come after ANZ on Tuesday reported an increase in refunds to customers as the remediation bill nearly doubled, a decline in the value of its software and goodwill impairment as factors affecting its $ 528 million cash profit

The additional remediation costs brought the bank’s total expenditure on program costs and customer reimbursement to $ 159 billion since 2017

Emphasizing the stable management of ANZ, a strong balance sheet and prudent credit reserves, Mr. Elliott the bank would support our clients and protect the long-term interests of shareholders

« While we don’t run the business expecting things to return to how they were before the pandemic, we also haven’t stood idly by waiting for the next event to happen, ANZ is well placed to respond to opportunities as they arise emerging as a result of accelerated structural changes in the economy, ”he said

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Australian and New Zealand Banking Group, Finance, Dividends, Net Profit, Shayne Elliott