Big four bank says customers have savings buffers
One of Australia’s big four banks says conflict in the Middle East is creating greater economic uncertainty, especially for customers.
ANZ Bank’s warning came as the fourth-ranked top institution posted a net profit of $3.65 billion in the first half.
The bank’s preferred measure of cash profits, excluding major items, rose 14 percent year over year to $3.78 billion, a whopping 70 percent increase from the last quarter of the fiscal year.
ANZ was the first of the big three banks to report earnings for the three months to March 31 this snow season. Commonwealth Bank will publish its third quarter results later this month.
All are being watched closely for signals about how clients are coping with the high-interest-rate, high-inflation environment.
ANZ’s result was supported by a 9 per cent drop in operating expenses; operating income was flat at $11.2 billion, excluding one-time items.
Chief executive Nuno Matos said the bank, which has a large corporate trading arm, believes the world has now become more complex due to the war in the Middle East that started on February 28.
“As Australia’s most international bank, we are at the forefront of global developments,” he said in a statement on Friday.
“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 less primarily an inflation problem and more of a supply and growth problem.”
During Asian trading on Thursday, the price of global benchmark Brent crude rose above $125 a barrel as the Strait of Hormuz, a key transit route for about 20 percent of the world’s oil supply, remained closed.
Before the war it was trading around $60. It was around US$110 on Friday morning.
Higher oil prices translate into higher fuel costs for Australian society and businesses.
At the same time, domestic inflation is rising rapidly and interest rates set by the central bank are expected to rise again this month.
“Likewise, in both Australia and New Zealand, households entered this period with generally strong balance sheets and high savings buffers,” Mr Matos said.
“We have not seen a significant increase in new customers experiencing difficulties or receiving assistance.
“However, we recognize that some individuals and businesses are struggling with these challenging circumstances.”
ANZ will pay shareholders an interim dividend of 83 cents per share, in line with last year.
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