ANZ chief singles out strong mortgage performance

Announcing the bank’s third-quarter profit results yesterday, Mr Smith noted that economies in the lender’s key markets have “slowed a little” compared to previous years and global conditions “remain challenging”.

Mr Smith went on to highlight ANZ’s solid mortgage performance and capital position.

“Our Australian retail and commercial businesses are continuing to outperform peers particularly in mortgages and are delivering consistently strong performances,” he said.

ANZ’s unaudited cash profit for the nine months to 30 June 2015 was $5.4 billion – up four per cent – and its unaudited statutory net profit was $5.58 billion – up 11 per cent.

Customer deposits grew 9.5 per cent (+5 per cent FX adjusted), with net loans and advances up 7.7 per cent (+5.4 per cent FX adjusted).

Earlier in the month, ANZ raised $2.5 billion through an institutional placement and this week announced that it will open its share purchase plan offer on 24 August 2015 in an effort to raise $500 million to meet additional capital requirements imposed by APRA.

“The recent capital raising has allowed ANZ to deal with known regulatory change, such as the higher capital adequacy requirements for Australian mortgages and positions ANZ’s capital ratios within the top quartile of international peers,” Mr Smith said.

At 30 June 2015 ANZ’s reported APRA Common Equity Tier-1 (CET1) ratio was 8.6 per cent. Following the completion of the $2.5 billion institutional placement, the June 2015 pro-forma APRA CET1 ratio was 9.2 per cent.

“On the basis that $500 million is raised under the share purchase plan, on the same pro-forma basis this would add a further 13 bps increasing the CET1 ratio to 9.3 per cent,” ANZ said in a trading update yesterday.

“The recent capital raising has allowed ANZ to deal with the known regulatory changes and position ANZ’s capital position within the top quartile of international peers.”