Major banks report rising profits

By Neil Griffiths

May 06 2022
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NAB and ANZ announced their half-year results this week.

Australia’s third and fourth largest banks both posted a lift in profit this week as part of their half-yearly results.

On Thursday, NAB reported a statutory net profit of $3.6 billion while also confirming a spike in cash earnings.

The bank’s cash earnings were up 4 per cent on 1H21 to $3.5 billion. Revenue also increased by 4.6 per cent from March 2021 - due to reported higher volumes, increased fees and commission income, offset by lower margins - as did lending (10 per cent) and deposits (12 per cent).

NAB also confirmed it will pay an interim dividend of 73 cents per share, fully franked.

Following the release of the results, NAB CEO Ross McEwan said capital levels remain above targets despite the $2.5 billion buyback it completed in March, with another to commence at the same figure in May.

On the back of the buyback, Common Equity Tier 1 (CET1) was reported at 12.48 per cent, 52 basis points lower than September last year and closer to its target range of 10.75 to 11.25 per cent.

Mr McEwan said that the FY22 term funding is also “well advanced”.

“The lift in our interim dividend reflects progress of our strategy, confidence in the sustainability of our performance and our continued optimism in the medium term outlook for the Australian and New Zealand economies," he said.

ANZ profits up

On Wednesday, ANZ reported a statutory profit after tax for the half-year ended 31 March 2022 of $3.5 billion, up 10 per cent on the previous half.

The bank also confirmed cash profit from continuing operations of $3.1 billion; down 3 per cent on the prior half.

The proposed interim dividend remains unchanged at 72 cent per share fully franked.

Cash return on equity fell slightly to 10 per cent, while return on average assets remained stable at 0.62 per cent.

ANZ chief executive Shayne Elliot called the latest results an “important half in the continued transformation” of the bank.

“Looking ahead, the economic environment is likely to be very different and we will continue to adjust our risk appetite, business settings and investment priorities as required,” Mr Elliot said.

“We are already seeing increased demand from our business customers and we are well placed to continue to support them as they manage in a world of higher inflation and interest rates.

“For ANZ, we will continue to focus on the long term – investing for tomorrow and not just running today. We have made good progress in building a resilient, agile bank for the future.

“Our culture is strong and we have an embedded sense of purpose as an organisation – to shape a world where people and communities thrive.”

The other two big four banks are set to provide updates on their operations next week, with half-yearly results from Westpac due on Monday and a quarterly trading update from the Commonwealth Bank on Thursday.

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