Big jump in profit for ANZ

ANZ has reported another record full-year profit of $1.27 billion to September 30, up 17 per cent from the previous financial year.

As the economy continues to recover, the country's largest bank has seen a big increase in lending and fewer bad loans on its books.

Underlying after-tax profit in the year rose to $1.37b, also a record result and up 10 per cent on last year's $1.24b.

The bank's retail business made $344m in the full-year to September, up 24 per cent.

It's Wealth business surged 62 per cent to $97m and Commercial business rose 4 per cent to $612m, while Institutional banking fell 9 per cent to $317m.

ANZ's New Zealand chief executive David Hisco said the bank's brand had strengthened, as reflected by significant growth in its mortgage market share.

With $52.5b on its residential mortgage books as at June 30, the bank has cornered roughly 30 per cent of the home loan market.

But there could be some risk in that market share as rival banks have tightened competition recently in a bidding war for National Bank customers who may be unhappy with the scrapping of the black horse brand.

Hisco said the ongoing focus was to bring together the ANZ and National brands and build on the opportunities presented by greater efficiencies and scale.  

ANZ's profit included a charge of $135m after tax for the winding down of the National brand and integrating customers onto a single IT system, which will happen this weekend.

Hisco also said credit quality had strengthened across the book. The bank's impaired assets were down by almost a quarter over the course of the year, to $990m.

Rising funding costs were having an impact on the bank's net interest margin - the difference between what it borrows money at and what it lends it out for - and that was expected to continue for some time.

While the margin rose 9 basis points to 2.43 per cent over the year, it was down 4 basis points from the half-year in March.

ANZ's local operations include brands such as OnePath, UDC Finance and Direct Broking, and it claims roughly half of all New Zealanders use its financial services.

A report by KPMG yesterday found New Zealand's major banks made a net profit of $914 million for the three months ending June, up by a massive 45 per cent on the previous quarter.

ANZ had made one of the biggest profit gains in the quarter on the back of a big increase in its gross loans and advances.

ANZ's Australian parent of the same name has also reported a record full-year profit of A$5.66b (NZ$7.17b), up 6 per cent from the previous year.

Roughly 13,000 New Zealand shareholders and superannuation funds collectively own more than $1b worth of ANZ shares.