ANZ reported a third quarter FY2017 profit increase of 5.3 per cent to $1.79 billion, primarily driven by the owner-occupier housing segment.
In its report to the Australian Securities Exchange (ASX), the bank reported an unaudited statutory profit of $1.67 billion for the third quarter to 30 June, 2017.
ANZ chief executive, Shayne Elliot said the third quarter period witnessed more progress in improving returns based on rebalancing the bank’s business portfolio, ongoing cost management discipline, and improved capital efficiency.
“Although we are in period of lower sector revenue growth with some parts of the economy experiencing challenges, credit quality has improved,” Elliot said.
The bank’s revenue decreased 0.3 per cent, which partly reflected a normalisation of the market’s business performance while expenses reduced one per cent.
Elliott said the bank was shifting away from investors towards owner occupiers in mortgage lending.
“We’ve said for some time as a strategy we want to be the best bank for people that want to buy and own a home and so we’ve been growing our business in owner-occupied home loans much faster than the market, and actually really reweighting our portfolio towards that and we’re really comfortable with that,” Elliott said.
The Australian Prudential Regulation Authority (APRA) Common Equity Tier 1 (CET1) ratio was 9.8 per cent at 30 June, which incorporated 51 basis points of net organic capital generation offset by the interim dividend (59 basis points).
“I think for all intents and purposes the moves on capital are largely behind us as an industry now and so we’ve set the new level of what good looks like which is the 10.5 per cent CET1. Clearly unquestionably strong is more than just capital but from a capital perspective, 10 and a half,” Elliott said.
