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ANZ New Zealand first-half profit $751m

NZ NewswireNZ Newswire 2/05/2016 Jonathan Underhill

A woman walks past Australia and New Zealand Banking Group (ANZ) signage displayed © AFP A woman walks past Australia and New Zealand Banking Group (ANZ) signage displayed ANZ New Zealand, the local unit of the Australian bank, reported an 11 per cent decline in cash profit as growth in net interest income was offset by a charge against software.

Cash profit, the preferred earnings measure for banks which strips out non-core items, fell to $751 million in the six months ended March 31, from $841m a year earlier.

Net interest income rose 5 per cent to $1.49 billion but was offset by a 21 per cent decline in other operating income to $402 million, which resulted in an overall 2 per cent decline in operating income to about $1.9b.

ANZ is New Zealand's biggest lender, with more than $100 billion deployed across the economy. Its parent, Australian & New Zealand Banking Group, on Tuesday posted a 24 per cent decline in first-half cash profit to $A2.78b ($NZ3.03b).

"This result reflects a challenging period for banking and we have taken the opportunity to move decisively and adapt to the changing environment by building a simpler, better capitalised and more balanced bank," said chief executive Shayne Elliott.

"We have strong underlying drivers in our Australia and New Zealand consumer and small business franchise and we have seen good early progress in transforming institutional banking."

In New Zealand, the overall net interest margin fell 15 basis points from a year earlier to 2.37 per cent.

A breakdown of ANZ New Zealand's earnings shows 8 per cent growth in its retail business to $395m, while commercial fell 9 per cent to $221m, for an overall 3 per cent gain for its New Zealand businesses.

Of the other operations that fall under its umbrella, earnings from wealth management rose 1 per cent to $68m while institutional earnings tumbled 42 per cent to $98m.

ANZ shares rose 0.4 per cent to $25.64 on the NZX. The ASX-listed stock has declined 29 per cent in the past 12 months.

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