ANZ boss warns of future impact of Iran war
ANZ Bank chief executive Nuno Matos has warned of economic risks from a protracted conflict in the Middle East as the bank made a cash profit of $3.8 billion in the first half.
ANZ’s results on Friday showed March profits were 6 per cent higher than in the same half last year. The banking giant, which has started to profit from Australian banks, said the war had not led to an increase in financial distress among its business and household customers.
Matos noted that ANZ was the most international of Australia’s big four banks, giving it a “front row seat to global developments” and said its clients entered the energy crisis caused by the Iran war in a strong position.
Matos said households are starting to feel some impact from higher transportation costs, so some will have less money for non-essential expenses. He said difficulty levels haven’t changed yet, but also said it’s “too early to tell.”
He also said large corporate customers have plenty of cash and are prepared for a shock like this, but if the energy crisis continues they will begin to “feel more constrained.”
“Much of the potential impact of this crisis lies ahead of us, but the longer the flow of oil is restricted, the greater the chance that the crisis will become a supply and growth problem rather than primarily an inflation problem,” Matos said.
“Our corporate customers are preparing for shocks, building capital and liquidity, maintaining flexibility and increasing supply chain resilience. Therefore, there has been no significant change in our customers’ overall borrowing behavior.”
ANZ’s results showed operating income was flat in the March half compared to the September half, while operating expenses fell 9 per cent due to heavy redundancies. Bad debt expenses were also slightly lower, which helped the bottom line.
Clancy Yeates is deputy business editor. He covered banking and financial services and was previously a national business correspondent in the Canberra bureau.Connect with: X or email.
