ANZ has posted a record cash profit of $7.41 billion for the financial year ended 30 September (FY2023), up 14 per cent compared to the previous financial year (FY22).
In its full-year results released to the ASX on Monday, the big four bank reported a statutory profit after tax of $7.10 billion, remaining flat on the previous year.
“This is a strong annual result, with record revenue and cash profit following several years of transformation, enabling us to continue to support our customers and improve their banking experience,” said ANZ chief executive officer Shayne Elliott.
“We continued to strengthen our balance sheet and closed the year with provisions for potential credit losses higher than prior to the pandemic, and with more capital than ever before. This is critical as we enter a period of continued high interest rates, rising costs, and geopolitical tensions.
“While our first half was stronger, the second half delivered an outstanding revenue and profit result, demonstrating the benefits of our diversified franchise.”
The bank’s common equity tier 1 (CET1) lifted 105 bps to 13.3 per cent. ANZ noted that it had lifted its total credit provision over FY23 to $245 million.
Revenue rose by 13 per cent to $20.89 billion. Return on equity was up 54 basis points (bps) to 10.9 per cent while earnings per share lifted 8 per cent to 247.1 cents.
Net interest income increased by 11 per cent to $16.58 billion. ANZ’s net interest margin (NIM) for FY23 increased by 7 basis points to 1.70 per cent.
“Importantly, each of our core divisions contributed positively to the result. They all have a clear strategy and a funded roadmap to deliver sustainably better outcomes for customers, in line with our purpose,” said Mr Elliott.
Cash profit fell by 8 per cent in the Australia retail division to $1.87 billion but increased by 19 per cent in Australia commercial to $1.44 billion and 43 per cent in institutional to $2.96 billion.
“Australia commercial is our highest returning division and delivered 11 per cent revenue growth in the year. Lending grew to a record high of $62 billion. Deposits also grew, showing the underlying resilience of our SME customers,” Mr Elliott said.
“Our institutional division produced record financial results, reflecting the benefits of long-term investment and transformation. For the first time, all three of its core businesses, transaction banking, corporate finance and markets, generated more than $2 billion each in revenue.”
A final dividend of 94 cents per share has been declared, taking ANZ’s full-year dividend for FY23 to 175 cents per share, up from 146 cents in FY22.
ANZ indicated that it is continuing with preparations to integrate Suncorp Bank after filing an appeal with the Australian Competition Tribunal in August to review the ACCC’s decision to not to grant merger authorisation.
A decision from the Australian Competition Tribunal is anticipated in February next year, and the deal remains subject to approval from the federal treasurer as well as the passage of legislative amendments by the Queensland Parliament.
Looking ahead, Mr Elliott warned that the external environment would likely remain challenging.
“The full impact of higher interest rates is expected to continue to impact economic activity as well as household and business budgets,” he noted.
“Despite these challenges, we expect the economy will be supported by strong household savings, resilient housing markets, low unemployment, solid business investment intentions, and strong migration in Australia and New Zealand.”
The ANZ CEO added that the bank’s strong balance sheet means it is well placed to support customers facing cost-of-living pressures and financial difficulties.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.