West China

Profit dazzles in step with ANZ's Asia push

2013-10-30 09:21:50

By Christian Edwards SYDNEY, Oct. 29 (Xinhua) -- Criticism of the Australia and New Zealand Banking Group Ltd (ANZ) controversial Asia strategy has effectively been put to the sword on Tuesday, after the bank beat analyst forecasts by posting a significant cash profit for the concluding financial year.

In the financial year to September, ANZ posted a cash profit of 6.49 billion Australian dollars (6.17 billion U.S. dollars), representing an 11 percent increase on the 5.830 billion (5.54 billion U.S. dollars)in the previous year and will offer shareholders a far more impressive dividend than previously expected.

ANZ Chief Executive Officer Mike Smith, who has taken his share of criticism for an aggressive Asian strategy said "This is a strong performance, the result of a distinctive long-term strategy focused on growth in our domestic franchises and targeted expansion in Asia."

The effect on the Australian share market (ASX) has been marked, with a clear upswing commencing a run on bank profits. The ASX is now up 5.81 percent in the last 14 days and October looks like it will be the third best month of the year, and well ahead of the average monthly rise in 2013 of 1.3 percent.

The ASX has now registered the highest read in five and a half years, and stocks are reaching record highs. Analyst expectations of a run on bank profits are high, with shares in the ANZ, Westpac and the Commonwealth Bank trade all trading at record levels this week.

While the ANZ's net profit was 6.27 billion Australian dollars(5. 96 billion U.S. dollars), also representing an 11 percent increase on the 5.66 billion Australian dollars(5.38 billion U.S.dollars)of the previous year, the National Australia Bank (NAB) shares also hit a five-year high of 36.87 billion(35.06 billion U.S. dollars).

ANZ's annual books reported an operating income at 18.44 billion Australian dollars(17.53 billion U.S. dollars), a four percent increase on the 17.711 billion Australian dollars (16.84 billion U. S. dollars)in the corresponding period 12 months earlier.

Smith's Asia strategy has drawn fire from a chorus of broking analysts in recent months due to the stymied returns flowing out of Asia. But Evan Lucas, market strategist with IG Markets in Melbourne, said the results are strong. "If the market was looking to be delighted by the bank's results, ANZ has certainly started bank week with a bang. The first take of the numbers look to be positive for the market." Lucas said. The ANZ board said that a full-year dividend payout ratio is aligned at 65 percent and 70 percent of cash profit and is " sustainable".

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Editor:Zhang Yi