ANZ has joined Westpac in lifting earnings and dividend for the six months to March 31 as the economy and lending in particular recovers from 2020’s pandemic driven lockdowns.
Without the need to write down asset values – as it did with Asian investments in early 2020 and the lack of a special set aside provision for possible loan defaults and write downs – which it did a year ago, the ANZ reported cash earnings of $2.990 billion and a statutory profit of $2.934 billion.
Cash Profit for continuing operations, before credit impairments and tax, was $3,941 million, down 10%.
Like Westpac, ANZ released some of the special loan loss provisions made last year. Westpac’s was more than $370 million, the ANZ’s was larger at $491 million.
“The credit impairment release in the current period was primarily driven by the release of allowance for collectively assessed expected credit losses largely reflecting the impact of an improved economic outlook relative to the outlook at the September 2020 half,” The ANZ said in its release to the ASX.
The bank’s decision to release some of 2020’s loss provisions is supported by the way customers on support packages have ended these and moved back to normal terms.
The bank said that “94% of home loan support packages in Australia and New Zealand and 90% of business support packages in Australia have reverted back to loan repayments, with the remaining having been either restructured or transferred to hardship.”
The bank will pay an interim of 70 cents a share – more than the 60 cents paid for all of 2019-20.
Bank dividends were restricted for much of 2020 – the ANZ deferred its interim then slashed it to 25 cents a share and the final was also cut to 35 cents, making a total of 60 cents.
APRA later eased the ban to allow the banks to make limited payouts – which ANZ did for the final half of the year, which became the full year payout.
ANZ paid an interim of 80 cents a share for the first half of 2018-19.
The bank said revenue fell 6% in the half to $8.367 billion.