Post-COVID bounce, strong property market drives profit up 8%
ANZ New Zealand has released its 2022 financial year results, recording an 8% increase in its cash net profit after tax of $2.06bn.
Statutory NPAT, which includes gains and losses from economic hedges, increased by 20% to $2.29bn in the year ended Sept. 30. The bank also recorded a $5.3bn increase in home lending to $104bn.
ANZ New Zealand chief executive Antonia Watson (pictured above) said the 8% increase in profit was a result of a combination of pent-up economic activity post the pandemic and a buoyant housing market.
“Coming into the 2021-2022 financial year, we didn’t anticipate the New Zealand economy would hold up as well as it has,” Watson said. “While inflation and supply chain problems, particularly for importers and exporters, were an issue for many customers throughout the year, the desire to get back to some kind of normal kept consumer spending up. While the housing market has quietened significantly in recent months, following four OCR rises since May, it was strong for most of the financial year.”
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Watson said the bank’s business and institutional customers managed well despite facing challenges throughout the year, including cost inflation, supply chain difficulties and finding/maintaining staff.
“Other highlights for us this year include launching the [ANZ] Business Green Loan – the first of its kind with the lowest advertised floating rate in the market for a green loan, which is linked to the green loan principles – and launching the low-interest ANZ Good Energy Home Loan top-up with more than $74 million drawn down in 15 weeks to fund energy efficiency initiatives,” she said.
Watson said in 2022 the bank helped over 8,300 customers build new homes with $4.1bn of discounted lending through Blueprint to Build, participated in 22 sustainable finance transactions during the year (up from 14 the prior year), paid $9m in sponsorship and donations, and collected more than $1m for The Cancer Society on Daffodil Day.
Watson said non-housing lending to business and institutional customers (including agri) remained muted, increasing by just $700m.
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“The Reserve Bank of New Zealand’s new capital rules equate to an increase in minimum regulatory capital required of $2.2 billion over the course of the year and will require ongoing regulatory capital uplift until 2028,” she said. “Banks are a reflection of the economies they operate in and New Zealand had been far more resilient than expected. Many of our customers have taken the opportunity to pay down debt and increase their savings. This caution is wise given the dark clouds on the horizon.”
Watson said the uncertain environment meant New Zealanders needed to be cautious.
“That was the main reason for ANZ NZ increasing its credit impairment provisions to $751 million with a $39 million charge recognised for FY22,” she said. “At the moment, the vast majority of customers are in a sound financial position, but we know that many will roll off fixed home loans onto higher rates over the coming year. When that happens, some will be under financial pressure.”
Watson said it wasn’t in anyone’s interests for people to get into financial stress.
“That’s why we’re keen to talk with customers sooner rather than later if there are any signs of problems to see. For example, we can structure their finances differently to relieve some pressure,” she said.
Watson said the bank had been in New Zealand since 1840 and was committed to supporting New Zealanders through any tough times ahead and to help build “future prosperity and security for Aotearoa”.
