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ANZ nets solid profit despite wealth management

Source: Money Management: 26 Oct 2012

ANZ banking group has reported a solid full-year result with net profit attributable to shareholders up 6 per cent to nearly $5.7 billion - but with its wealth management division still struggling in what it represents as adverse market conditions.

The big banking group released its results on the Australian Securities Exchange (ASX) today reporting a proposed final dividend of 79 cents per share fully franked, and with its chief executive Mike Smith claiming it had delivered on its promise to shareholders, staff and customers.

However he acknowledged that profits from the newly-formed Global Wealth and Private Banking Division had been flat, attributing this to market conditions.

".but importantly, having put a new management focus on the business, we saw an improving contribution in the second half with better insurance results, higher investment earnings and productivity improvements," he said.

Smith said ANZ would be updating investors on the direction of the wealth management business next month.

However, drilling down on the banking group's results announcement, it was revealed that net income from global wealth and private banking increased $24 million, primarily due to the impact of interest and inflation rates on insurance and annuity reserves, higher sales from Asian operations, and favourable insurance results "partially offset by lower funds management and advice income".

Where advice was concerned, the ANZ results documentation revealed that while the company had struggled in the second half, net advice income was still up five per cent year-on-year.

However in terms of the six months between March and September, it was down by 14 per cent.

Looking at the broad outlook for ANZ, Smith said that with the global economy softening it was clear that the post-Global Financial Crisis lower growth business environment "will be with us for the foreseeable future".

He said that although the operating environment in 2013 looked more challenging with stronger headwinds in a number of areas, he believed ANZ's unique growth strategy meant it was well placed to deliver value and performance to shareholders.

Money Management

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