ANZ (N.Z.) earns more

Press, 13 May 1988, Page 12

ANZ (N.Z.) earns more

The unlisted ANZ Banking Group (New Zealand), Ltd, reports an unaudited group profit before tax of $97,184,000 for the half-year ended March 31.

This is 15 per cent up on the result of $84,470,000 for the half-year ended March 31, 1987. After tax the profit was $53,637,000 — up 12% (1987: $47,814,000). In addition there were extraordinary profits of $8,453,000, mainly from property sales (1987: $448,000). ANZ Banking Group (New Zealand) brackets the New Zealand activities of the listed, Melbourne-based ANZ Banking Group. The directors say the improved profit results largely from the growth that occurred in the balance sheet in the second half of the 1987 financial year. The margin between the

cost of funds to the bank and the returns available from lending/investment continued to contract and for the halfyear to March 31, 1988 was significantly below the margin for the corresponding period last year. The bank reports increased provisions for doubtful debts (specific, up $15.2M to $25.1M and general, in line with the increased balance sheet, up $3.6M to 1 S29M). Bad debts of $13.7M were written off in the half-year. The directors expect economic conditions to remain difficult during the remainder of the financial year. However, they say they are confident that the quality of the asset portfolio of the Group has been thoroughly assessed by management and that losses and provisions in the second half will revert to more traditional levels. They expect results for the full year are expected to show an increase over 1987. Non-interest operating costs, excluding bad and doubtful debts, increased more than the rate of inflation, but largely reflected an increasing investment in technology.