Home lending drives ANZ profit

ANZ New Zealand saw post-tax profits rise by 42% in the half-year to March, underpinned by a buoyant housing market and strong home lending book.

Wednesday, May 5th 2021, 10:35AM

New Zealand's biggest bank saw net profit after tax rise to $962 million, up from 42% in the six month period to March 2020. 

The bank said the turnaround was driven by a "strong home lending market" and a "significant" reduction in credit impairment charges.

Big four banks, including Westpac, have revised down the impact of Covid-19 on their lending books, coming out of 2020 with stronger than expected credit books.

Home lending by ANZ NZ rose by $5.8 billion over the half-year. 

The big four bank said the housing market "defied expectations during the six-month period due to historically low interest and deposit rates, reduced loan-to-valuation ratio requirements and supply constraints".

ANZ New Zealand chief executive Antonia Watson said the bank had released 25% of the additional credit provision it had put in place since the pandemic hit. 

Watson said there was "room for optimism" but "we also know the impact on the economy is uneven".

"Sectors that relied on overseas visitors, such as education, hospitality and tourism, have been disproportionately affected and we’ve seen first-hand the challenges facing our customers in those industries.

"As we look ahead, a full recovery is still some way off. Economic confidence will take time to be restored as residual impacts of the pandemic are felt.

"Banks have an important role in helping New Zealanders through the recovery, and ANZ NZ is playing its part," Watson added.

Tags: ANZ home loans Lending

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