Why ANZ's 'best ever' result was a big disappointment
ANZ's Shayne Elliott says the big four bank delivered its "best ever" profit. Investors disagreed, and one analyst said the lender is underperforming its peers.
Bankers tend to be polite to one another and defer to euphemisms and allusions when referring to their competitors. Recently, there have been references from some big bank bosses to “peer” banks driving what they claim are value-destroying competition in Australian mortgages.
Now anyone in the market knows those references were a sly nod to Westpac, Macquarie and ANZ. And today’s ANZ full year result confirms the bank has in fact been aggressively buying market share, not just in Australian mortgage lending but also in deposits.
ANZ’s result, broadly, was in line with expectations but it was the second half margin performance that told the story. Not unexpectedly, given other bank results, margins were down, particularly in the second half, but at ANZ by more than expected: around 6 basis points overall but a stomach hollowing 33 basis points in the retail bank in the second half alone. That’s where the mortgages and deposits are.
ANZ’s cash profit of $7.41 billion for the year to 30 September was up 14% with statutory profit nearly flat at $7.1 billion. Operating income was up 5% to $20.5 billion and the final dividend 94 cents a share, from 74 cents a year ago.
