ANZ says home loan business back on track as profits jump to $6.5 billion

ANZ full-year cash profits have risen by 5 per cent to $6.52 billion, with chief executive Shayne Elliott saying the bank has restored momentum in its home loan business after ongoing struggles with slow mortgage processing times which failed to keep up with soaring demand during COVID-19.

The big four bank declared shareholders would receive a full-year dividend of $1.46, a 3 per cent jump from the previous year, as it released its results on Thursday morning. The profits were higher than expected, with markets predicting cash earnings of $6.3 billion and a dividend of $1.44.

The profits were higher than expected, with markets predicting cash earnings of $6.3 billion and a dividend of $1.44.Credit:Will Willitts

Last year’s profit was $6.2 billion, an increase of 65 per cent, but a result which Elliott at the time said had been hampered by slow mortgage processing times.

“We restored momentum in Australian home loans with application approval times back in line with industry peers,” Elliott said on Thursday.

However, Elliott warned that the world was in a period of significant uncertainty with central banks struggling to control inflation, and cost-of-living pressures would be likely to have an impact on households.

“Fortunately, RBA data show aggregate household balance sheets, net of liquid assets, are the best they have been for 15 years. This is largely a result of customers taking cautious measures during COVID and the effective response from all levels of government in Australia and New Zealand,” he said.

ANZ chief executive Shayne Elliott says the bank’s home loan business has “restored momentum”..Credit:Peter Wallis

“While this data suggests on average people are still doing well, cost-of-living pressures are starting to have a meaningful impact and the next six months will be testing. This is particularly an issue for first-time homeowners who are only starting to build up their equity as well as those with less stable employment.”

ANZ kicked off the sector’s reporting season on Thursday. The big four banks’ combined full-year profits are expected to exceed $28 billion, as rising interest rates help the country’s biggest financial institutions rake in higher revenue while bad debts remain subdued.

ANZ had already announced that its results would include a $113 million charge because of factors including compensation and restructuring costs.

The bank announced in July its plans to secure Suncorp’s banking arm for $4.9 billion in what would be the biggest banking deal in over a decade.

The deal still faces regulatory and political approval. ANZ has said the deal would allow it to further expand into the retail banking market and pick up Queensland customers, bringing about $47 billion in home loans.

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