ANZ profits fall 24%

ANZ has seen its profit plunge by 24 per cent as its CEO flags a “challenging period for banking”.

ANZ today announced a statutory profit after tax for the half year ended 31 March 2016 of $2.7 billion, down 22 per cent and a cash profit of $2.8 billion, down 24 per cent. It follows a $717 million net charge primarily related to initiatives to reposition the group for stronger profit before provisions growth in the future.

In a trading update today, the bank said the result reflects a strong performance in ANZ’s Australian and New Zealand consumer and small business franchises and challenging market conditions in institutional banking, including higher provisions in the resources sector and in related industries.

“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,” ANZ chief executive Shayne Elliott said.

“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,” he said.

“This has been supported by prudent capital management and tight control of costs with total expenses, excluding the impact of specified items, being lower for the first time in seven halves.”

Mr Elliott said banking is continuing to experience rapid shifts in technology, customer expectations and regulation against a backdrop of low economic growth, volatile financial markets and rising credit costs.

“Our priority is to take bold action to ensure ANZ is fit and ready for this future.”

“This means for the immediate future we are in a period of consolidation, simplification and transition.”

More to come.

[Related: ANZ restructures mortgage team]

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