ANZ net profit increases on credit provision reversals

Reversals of Covid-19 credit provisions helped the Australian and New Zealand (ANZ) banking group record a 65% increase in cash profit for the year ended September 30.

ANZ’s cash profit for the year was A $ 6.20 billion (A $ 4.66 billion) from A $ 3.76 billion in the same quarter last year.

Cash profit was helped by a net reversal of MAUD 567 in collective provisions. “In general, our customers continued to manage the pandemic well, resulting in a low individually assessed (IP) provision charge for the entire year. A disciplined focus on strategy and client selection in the institutional sector contributed to this strong result, as did the continued impact of government and bank support programs, ”ANZ said in a statement on Thursday.

The strength of capital increases

This impressive performance helped improve ANZ’s Tier 1 capital ratio, the most important measure of a bank’s financial health, to 12.3%, or roughly A $ 6 billion above. of the “unmistakably strong” benchmark of the Australian Prudential Regulatory Authority.

Due to its healthy financial position and improving conditions, the Board of Directors announced a final dividend of AUD 0.72 per share, bringing the total dividend for the year to AUD 1.42 per share. ANZ also launched an AU $ 1.5 billion share buyback program in August this year.

“This year has demonstrated the benefits of our diversification… We have managed our activities in the context of Covid-19… While we have benefited from a more favorable credit environment, indicators such as more than 90 days of arrears and reports performed better than expected and reflected our prudent management for many years. We recognize that the outlook remains somewhat uncertain and that we have over A $ 4 billion in credit reserves if conditions deteriorate, ”said Shayne Elliott, CEO of ANZ.

ANZ goes up

Following the announcement, ANZ shares rose 0.81% on ASX to AUD 28.62.

Read more: ANZ Launches AU $ 1.5 Billion Share Buyback, More To Follow

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