ANZ New Zealand1 (ANZ NZ) today reported a statutory2 net profit after tax (NPAT) of NZ$1,336 million for the 12 months to 30 September 2020 – a 27% decrease on the 2019 financial year.
Cash NPAT was NZ$1,371 million, 29% down on the previous year.
ANZ NZ Chief Executive Antonia Watson said the results reflected a significant uplift in the charge for expected credit losses due to changes in the economic environment, the sale of UDC Finance Limited (UDC) in September 2020, together with benefits in the previous financial year from the sales of OnePath Life (NZ) Limited and ANZ NZ’s share in Paymark Limited.
“COVID-19 brought unprecedented challenges to our country and consequently for many businesses, including ANZ NZ, and this is reflected in our full-year result. Despite the difficult year, ANZ NZ has continued to perform well, demonstrating it can weather challenging economic conditions and play an important role in supporting customers through the crisis,” said Ms Watson.
“As New Zealand’s largest bank, we’ve been in a unique position to assist thousands of Zealand businesses through a period of severely curtailed business activity.
“I’m proud that, despite such challenging conditions, we’ve been able to continue to lend and provide certainty to customers with an approach that is fair, transparent and consistent so access to credit isn’t a factor that holds them back.
“New Zealand has made much better progress in fighting the virus than most countries. While that’s encouraging there will be many challenges as the country emerges from the high level of response and starts to rebuild.”
During COVID-19, ANZ NZ worked closely with the Government and regulators to implement Government-led support initiatives, such as home loan deferrals and the Business Finance Guarantee Scheme, as well as a major programme of reduced fees, charges and interest rates to help customers through the crisis.
So far, ANZ NZ has provided financial help to around 43,000 personal, home and business loan customers through repayment deferrals, moving to interest-only, or loan adjustments covering lending of around $27 billion.
“The New Zealand economy has a lot going for it. As well as our management of COVID-19, our commodity prices are holding up as countries shore up their food supply chains,” Ms Watson said.
“Business confidence and other indicators of economic activity have bounced back quickly. Businesses have some certainty about the future that simply doesn’t exist in other countries.
“Helped by historically low interest rates, we also saw many customers take the opportunity to improve their financial situation by increasing savings and paying down their personal or home loan debt.”
Ms Watson said that although she was optimistic many businesses would survive, the next few months would be difficult.
“While the efforts of people in New Zealand to contain the spread of COVID-19 have reduced its impact, we must remember that there has been a considerable cost to many in the community.
“For the most vulnerable, the virus and emergency lockdowns made their lives even more precarious through restricted access to food, shelter or services, or put them in harm’s way in their own homes. COVID-19 has shown how much the community and volunteer sector do to support those in need.”
To help these organisations, ANZ NZ donated a total of $2 million to Women’s Refuge, Age Concern New Zealand and the Salvation Army’s foodbank network, as well as the Red Cross and a series of local charities in the Pacific supporting vulnerable people. A $1 million sports grant system was also established to support more than 400 grassroots cricket and netball clubs and initiatives.
The donations were in addition to ANZ NZ’s $13 million contribution of local sponsorships and donations to sports, arts, cultural and community organisations and events.
All comparisons are year ended 30 September 2020 compared with year ended 30 September 2019 and on a cash basis unless otherwise noted
Ms Watson said the full-year result was pleasing given the difficult economic circumstances.
“While the record low interest rate environment and fee reductions have impacted underlying revenue, customer deposits were up 11% and underlying gross lending increased by 3% (flat at a headline level after the sale of UDC). Despite an uplift in credit provision charges, our focus on responsible lending means credit quality remains strong.
“Official Cash Rate cuts saw interest rates drop to the lowest levels on record. This has provided a good opportunity for first home buyers to get on the property ladder, but low interest rates have also made property more attractive as an investment.”
Remediation and increased regulatory requirements contributed to a 10% increase in operating expenses on a cash NPAT basis. This includes a significant investment in a number of technology systems to ensure that we are able to meet Reserve Bank of New Zealand requirements to have a stand-alone bank.
ANZ NZ continued to simplify its product offering and focus on suitability for customers. “Our focus on digitisation and efficiencies means this year we have cut fees on a range of products and services, passing on around $50 million in savings to customers,” Ms Watson said.
Other highlights for the financial year include:
key financial information
For media enquiries contact Stefan Herrick, 021 748 492
1ANZ New Zealand represents all of ANZ’s operations in New Zealand (NZ Geography), including ANZ Bank New Zealand Limited, its parent company ANZ Holdings (New Zealand) Limited and the New Zealand branch of ANZ.
2Statutory profit has been adjusted to exclude non-core items to arrive at cash profit continuing basis, the result for the ongoing business activities of ANZ New Zealand. Refer to Summary of key financial information for details of reconciling items between cash profit and statutory profit.
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