ANZ Bank New Zealand Limited Analysis

Overview

Refer to www.anz.co.nz/about-us/media-centre/investor-information/ for ANZ Bank New Zealand Limited's (ANZB) disclosure statement and information on ANZB bonds and notes.

Performance

The following information was extracted from ANZ Bank New Zealand Limited's full year results, released 8 November 2024:

ANZ New Zealand full-year results: 'Cautious optimism'

ANZ New Zealand' (ANZ NZ) today reported a cash? net profit after tax (NPAT) of $2,286 million for the 12 months to 30 September 2024, an increase of 1% on the prior year. Statutory NPAT, which includes gains and losses from economic hedges, was $2,091 million, down 2%.

ANZ Bank New Zealand Ltd (ANZ Bank NZ) Chief Executive Officer Antonia Watson said it was a solid result in a tough year for the New Zealand economy.

"Banks are a reflection of the economies they operate in. Like many of our customers, our costs grew faster than our income in the year.

"But our business demonstrated resilience and strength as we worked hard to support customers through a period of high interest rates and cost-of-living pressures.

"While the results of stubborn inflation, an official cash rate at restrictive levels and a lack of economic growth are still feeding through the system, we're starting to see a brighter picture emerge.

"As interest rates come down, inflation is controlled and businesses feel more confident, there is a sense of cautious optimism surrounding New Zealand's economic future."

As a result, ANZ NZ reduced the total credit impairment provision charge to $44 million, $139 million lower. Revenue for the year was $5,046 million, up 1%.

Expenses for the year were $1,760 million, an increase of 6%, driven by inflationary pressures on staff and vendor

costs.

Despite the quieter housing market and strong competition, home lending was up 4%, maintaining market share for the year. Customer deposits were up 3%.

Net Interest Margin - the difference between the interest we earn primarily on lending and the interest we pay primarily on deposits - dropped by 7 basis points for the New Zealand Division. This was driven by customers' preference for higher earning term deposits together with continued sharp price competition in the market.

Key points:

All comparisons are against the prior comparable period and on a cash basis unless noted otherwise.

• Cash profit of NZ$2,286 million, up 1%
• Statutory profit of NZ$2,091 million, down 2%
• Revenue up 1% reflecting lending and deposit growth
• Expenses up 6% driven by inflationary pressures on staff and vendor costs
• Credit impairment charge of NZ$44 million, down NZ$139 million
• Customer deposits up 3% and net loans and advances up 2%
• Funds under management up 7% to $39.7 billion