ANZ Banking Group became the first major lender since 2004 to not lift its dividend when it reported yesterday that its half-year profit stumbled because of bad debt provisions.
The Melbourne-headquartered company said net profit after tax declined by 7 per cent to $1.96 billion for the six months to March 31.
Exposures ranging from a United States monoline insurer to property group Centro to a sinking mining firm forced Australia’s fourth-biggest bank by market capitalisation to set aside nearly $1 billion in bad loan provisions.
The firm’s dividend was left unchanged at 62 cents a share.
Only National Australia Bank stopped growing its dividends from 2004 to 2006 when it was plagued by a currency scandal.
Commonwealth Bank of Australia has consecutively raised interim and full-year distributions since 1994, St George Bank since 2000 and Westpac from 2003, according to data from the banks’ websites.
However, growth in ANZ’s insurance and investments division, which includes ANZ Financial Planning, surged by 26 per cent.
ANZ also earned $76 million from its joint venture with dealer group ING Australia (INGA) and its subsidiaries, which include Millennium3, RetireInvest and FSP Tandem.
ANZ’s stake in the joint venture is 49 per cent.
In-force premiums soared 28 per cent on the back of sales of ING’s insurance products, OneCare and OneCare Express.
Funds management income rose by $12 million, or 5 per cent, to $255 million, underpinned by sales of INGA’s Corporate Super product.
ANZ added 52 planners to bring the total number to 419 during the period.
The company’s shares rallied 89 cents or 4.2 per cent to end at $22.03 in trading yesterday.
