SYDNEY: Australia and New Zealand Banking Group's annual profit jumped 65% as it released funds kept aside to cover potential bad loans, but it acknowledged it had not done enough to capitalise on a pandemic-induced boom in home lending.
The bank's home loan volumes in Australia fell 1% in the second half to A$278 billion, despite a 20% surge in nationwide home prices driven by an unprecedented amount of fiscal spending.
"We started the year really well in home loans and then, of course, we saw just unbelievable levels of volume across the economy in terms of turnover, people buying and selling houses. Now we didn't prepare well and that's on me," Chief Executive Shayne Elliott said.
Since 2019, Australian home loan market share for the country's No. 4 lender has fallen 70 basis points to 13.9% in August, to the benefit of its larger rivals.
ANZ has hired people to address problems with loan processing times and Elliott said the book should be growing in line with its larger peers by the end of the current fiscal year.
Like many other banks globally, ANZ has benefited from releasing cash set aside for potential bad loans resulting from the pandemic.
Cash profit from continuing operations came in at A$6.2 billion ($4.7 billion) for the year ended Sept. 30, 4% ahead of expectations.
The bank declared a A$0.70 per share dividend, 2 cents higher than in the previous half and up from 35 cents in the same period last year, when regulatory authorities restricted dividend payments due to the pandemic uncertainty.
ANZ shares were 0.5% higher in afternoon trade compared to a slightly lower broader market.
In New Zealand, a market the lender dominates, home loans grew 11% during the year and net interest margin, a key measure of profitability, grew 2 basis points to 2.34%.
Group net interest margin was one basis point higher to 1.64%, mainly due to ultra-cheap funding costs.
"Going forward, the key question will be how much margin ANZ will need to sacrifice to restore balance sheet growth," Victor German, a Macquarie banking analyst said in a client note.
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