ANZ shares are up around twice as much as the bank’s competitors on a strong December quarter trading update.
The bank’s unaudited cash profit, which excludes some one-off financial fluctuations, was up 13 per cent on the same period last year to $1.73 billion.
ANZ’s unaudited statutory net profit was $1.64 billion over the three months to the end of December.
The bank’s shares were up 1.1 per cent to $30.24 by 10:44am (AEDT), while the other major banks were up 0.3 to 0.5 per cent.
ANZ’s chief executive Mike Smith says the company performed well domestically and overseas.
“The Australia division again grew market share in both retail and corporate and commercial during the quarter while making further investments through the banking on Australia program to improve our customers’ experience,” he noted in the report.
“In the international and institutional banking (IIB) division, global markets, trade and cash management have performed strongly particularly in Asia where a number of our country operations delivered double-digit growth in revenue including Singapore, China and Hong Kong.”
Mr Smith says the bank’s strategy, low levels of corporate borrowing and record low interest rates are expected to improve its loan book, with the provision for bad debts forecast to fall around 10 per cent this financial year compared with last.
The fall in bad debts is clearly assisting the bank’s bottom line, with revenue growth expected to be only 4-5 per cent for the financial year, while expenses were up 2 per cent.
ANZ says its net interest margin – the gap between the interest rates it borrows money at and what it lends it out for – fell slightly during the quarter.