ANZ Banks first half profit loses a massive 28 per cent

Wednesday April 29, 2009

ANZ Banks has announced that its first half profit has declined a massive 28 percent to $1.417 billion with no signs of the market improving for the remainder of the year.

The fall in net profits for the six months ended March 31 fell from $1.963 billion in the previous corresponding half with charges for bad debts became an issue. Also of significance was the decline of 43 percent in cash profit to $954 million.

The ANZ Banks total credit impairment charges increased by 28 percent from $726 million to $1.435 billion since last year's corresponding period.

While banks profit were always expected to decline after the beating the global financial crisis has given the economy, this is quite a lapse from the ANZ Banks previously forecasted full year provisions of between $2.4 billion and $2.5 billion. However, ANZ Banks have stated that due to the global economic slowdown, ANZ Banks expect these tough conditions and figures to continue into the second half and into fiscal 2010.

Overall, ANZ Banks stated that it expects its revenue from its markets trading business and official cash interest rate will both decline further over the remainder of 2009 while the negative impact of the commercial property market had hit harder than expected for the banks.

The Bank further stated that it fully expects the commercial sector and SMEs (small and medium sized enterprises) to be negatively impacted while bad debt provisions for the household sector are expected to rise from the first half of fiscal 2010.

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