Australian lender ANZ’s annual profit misses estimates as competition bites
2024.11.07 17:02
(Reuters) -Australian lender ANZ Group reported lower-than-expected annual earnings on Friday as its margins were impacted by what it called a “challenging” period of intense deposit and lending competition and high costs.
Australian banks have been struggling to increase profit recently because of stubbornly high expenses and a fierce price war between lenders as borrowers look for better deals on loans and their deposits.
The country’s fourth-largest lender by market value reported cash profit of A$6.73 billion ($4.49 billion) for the year ended Sept. 30, missing the Visible Alpha consensus of A$6.82 billion and below last year’s A$7.41 billion.
“Competition in the (core banking) sector has continued to be intense, particularly in home lending and deposits,” ANZ Chief Executive Shayne Elliott said.
“Higher interest rates are impacting customers and we saw an increase in those requiring hardship support.”
Net interest margin, a key measure of profitability, fell 13 basis points from last year to 1.57%. Common equity tier 1 ratio, a measure of spare cash, slipped more than a percentage point to 12.2% as of the end of the financial year.
It proposed a final dividend of 83 Australian cents apiece, compared with 94 Australian cents apiece handed out last year.
Earlier in the week, larger rivals Westpac and National Australia Bank (OTC:) also reported slight dips in their annual cash profits due to fierce competition as well as a slight uptick in late loan payments.
($1 = 1.4972 Australian dollars)
