ANZ profits from diversification

The Australia and New Zealand Bank (ANZ) today announced an operating profit after tax of $1.4 billion for the half year ending March — a 22 per cent rise on the same period last year.

The interim result announcement includes four months of revenue from its acquisition in December 2003 of the National Bank of New Zealand (NBNZ), and performance was also boosted by a 10 per cent rise in net loans and advances over the period.

ANZ, which has also just completed its program of clustering specialist businesses around customer segments, says the acquisition of NBNZ has given it a stronger, more sustainable and diversified base.

“At ANZ, we have taken considerable steps to create a strong diversified business foundation. We now have a much stronger franchise across Australia, New Zealand and the Pacific,” ANZ chief executive officer John McFarlane says.

Australia and New Zealand account for 93 per cent of ANZ assets.

“ANZ is now a very different bank. Our specialised business model is unique. Our move to cluster our specialist businesses around customers to develop greater coherence and synergy, while maintaining their individual vitality, should enable us to continue to advance our strategic position,” McFarlane adds.

The bank also continues to reduce its risk exposure with net specific provisions down 24 per cent, net non-accrual loans down 14 per cent and international assets 19 per cent lower.

“Our risk domestically and internationally, particularly in our institutional businesses, has been reduced substantially such that overall risk is approaching an optimal level,” McFarlane says.

As for strategic direction going forward, McFarlane says ANZ will now focus on identifying and investing in predominantly Australian organic growth opportunities.