UPDATE 2.35pm ANZ says its expansion into Asia gives it an advantage over rivals competing in an Australian market where credit growth is set to remain weak.
The bank today beat market forecasts with a net profit of $4.4 billion for the nine months to June, a 10 per cent rise from the same period in the previous year.
Cash profit, the industry’s preferred measure of underlying performance, was $4.5 billion in the nine months to June, up 5.5 per cent from the previous corresponding period.
Chief executive Mike Smith issued a positive outlook for the bank, despite weak lending growth and strong competition for deposits in the local banking sector.
But he extended a freeze on salaries for the bank’s top executives, including himself, for another year.
"As senior executives we have to demonstrate that constraining costs is everyone’s business,” Mr
Mr Smith’s annual salary is $3.15 million, and he is still eligible for additional incentives.
Cost savings and ANZ’s growing overseas operations contributed to its nine-month profit growth.
Market share gains were made in its Australian operations, with deposits up by 8.7 per cent in the nine months to June, and loans up by 7.7 per cent, Mr Smith said.
But consumer and business caution would remain a dominant influence on Australia’s banking industry for some time, he said.
"We’re not running the business on the expectation, or frankly on the hope, that the subdued lending environment will end any time soon,” Mr Smith said.
"We aren’t going to see the pre-GFC credit growth return anytime in the near future.
"And we are continuing to adapt the business to this environment."
Part of that change is ANZ’s offshore expansion strategy, which the bank expects to result in 20 per cent of its earnings coming from the Asia Pacific, Europe and America in the current year.
"We are really well placed to deal with an environment that is going to be volatile and going to have a number of challenges,” Mr Smith said.
"I think this includes the continuation of quite intense competition with every bank fighting to protect and grow their core franchises given the subdued credit growth environment."
Investors welcomed ANZ’s result, sending its shares up 71 cents to $24.61 at the close.
Morningstar analyst David Ellis said ANZ’s result put it on track for a $6 billion full year result.
Earlier this week CBA posted a $7.1 billion profit for the year to June 30.
NAB said it made a $1.2 billion net profit in the three months to June 30, taking its nine month net profit to $3.25 billion.
Westpac no longer provides quarterly updates, and will issue its full year result in November.