ANZ chief executive Shayne Elliott said intense competition in the mortgage market had weighed down the bank, after unveiling a $6.7 billion cash profit that missed analyst expectations.
Elliott also said an increasing number of customers were seeking hardship support as they grappled with high interest rates for a lengthy period of time.
ANZ chief executive Shayne Elliott said competition in the home lending sector continued to be intense.Credit: Alex Ellinghausen
Loan arrears at the bank lifted 17 basis points to 1.69 per cent in the 12 months to September 30. The number of mortgage holders 90 days behind on their repayments was at a three-year high.
“Higher interest rates are impacting customers, and we saw an increase in those requiring hardship support,” Elliott said. “Our data shows customers, in general, are holding up better than expected.”
ANZ’s cash profits fell 8 per cent to $6.7 billion compared to last year’s record amid one-off cost pressures from its acquisition of Suncorp. Excluding the Suncorp acquisition, ANZ booked cash profits of $6.9 billion.
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The bank’s net interest margin – a key measure of profitability that compares banks’ funding costs with what they charge for loans – lifted to 1.57 per cent.
Its margins in the retail arm tumbled 31 basis points to 1.91 per cent, while the commercial division fell 11 basis points to 2.59 per cent. Those pressures subsided in the second half.
The institutional bank recorded a 7 basis point jump in margins to 2.38 per cent.