UP +2.3%, net profit $1.05bn, int div 39c

ANZ net profit $1.05bn for March half; int div 39c
09:56, Friday, 26 April 2002

Sydney - Friday - April 26: (RWE) - Australia and New Zealand
Banking Group Ltd today announced a record net profit of $1.05 billion
for the half-year to March, compared with a profit of $895 million for
same period last year.
Earnings per share were up 18.8 per cent to 66.3c.
Return on equity was 21.6 per cent, compared with 19.6 per cent
last year.
Directors have declared an interim dividend of 39c fully
franked, up from 33c.
Chairman Mr Charles Goode said: "This is a good result in a
challenging environment.
"The consistency of our performance is the result of continued
hard work in strategically repositioning ANZ and in building a high
performance organisation.
"We have achieved good earnings growth and a high return on
equity that has remained above 20 per cent.
"We ended the half well on track against our public financial
targets and with a strong financial and capital position," Mr Goode
said.
Chief executive Mr John McFarlane noted the wide range of
initiatives undertaken in recent years to reduce risk, to improve
performance, to reshape the portfolio of businesses and to create a high
performance culture.
"While we still have some way to go, the collective impacty of
these initiatives is now increasingly evident in the quality and
consistency of our financial results, and in our ability to withstand
unexpected surprises such as the collapse of Enron, which was the cause
of the increased specific provision in the half.
"Consistent with our philosophy of holding prudent capital and
reserves, we took the opportunity to increase our general provision for
doubtful debts by $250 million.
"This enhances our capacity to deal with similar issues should
they arise."
With regard to the immediate outlook, the bank expected the
Australian and New Zealand economies to perform relatively well, and for
overseas markets to begin to strengthen from their low base, Mr
McFarlane said.
"Loan demand is expected to remain reasonably subdued, and
rising domestic interest rates are likely to cause a squeeze on mortgage
margins, partially offset by an improvement in deposit margins.
"Loan losses tend to lag the economic cycle and these are
expected to remain moderately high, although at levels that are
manageable.
"Expense growth is being managed within the revenue growth rate,
which should lead to further improvement in the cost-income ratio."
The bank continues to expect a favourable operating performance
in the second half, with the 2002 and 2003 targets remaining unchanged.
Shares in ANZ closed at $18.97 on Wednesday.