ANZ New Zealand has felt the bite of the economic slowdown, with its reported net profit after tax (NPAT) sliding by 15% on the corresponding half of the 2019 financial year.
NPAT was $789 million for the six months to 31 March 2020, and cash NPAT took an even stronger dive to $677 million - a 39% decrease on the corresponding 2019 period.
ANZ New Zealand says the decrease was down to its significant economic provisions to customers as a result of the Covid-19 pandemic, and some one-off gains from last year’s sales of OnePath Life and its share in Paymark Limited.
ANZ says these sales contributed to an approximate 13% decline in revenue, while expenses increased by roughly 13% - partly due to increased spending on regulatory compliance. Despite the difficulties, ANZ says it remains well capitalised with a total capital ratio of 13.9% - an increase from 13.6% in September 2019.
Commenting on the results, CEO Antonia Watson said the relatively stable position of ANZ New Zealand reflected the financial wellbeing of customers.
“New Zealand’s response to Covid-19 has resulted in extraordinary changes to the economy, the fortunes of businesses and the lives of customers,” Watson said.
“While the Covid-19 crisis only began in earnest in New Zealand at the end of March, the collective provision has increased substantially to recognise the possible impacts on economic activity as we go through FY20 and beyond. The extent to which this impact continues in the second half will depend on how and when New Zealand fully emerges from lockdown.”
Watson noted that New Zealand has made significantly better progress in fighting the virus compared to most other countries, and says this will help our chances of kick-starting a quicker economic recovery.
“While that’s encouraging, there will be many challenges as the country emerges from the high level of response and starts to rebuild,” Watson said.
“Banks have an important role in helping New Zealanders through the recovery, and ANZ New Zealand is ready to take on that task.”