The country's biggest bank has posted a strong first-half profit, but sees challenges ahead amid rising inflation and interest rates.
Photo: RNZ / Russell Palmer
ANZ's net profit rose 18 percent on the year earlier to $1.1 billion in the six months ended March, which includes gains on financial instruments used to manage risk.
Otherwise, the cash profit was up just 1 percent to $968 million.
New Zealand chief executive Antonia Watson said the result reflected the strength of the housing market, with more than a third of homeowners ahead on their loans by six months or more.
"The business has successfully grown home loan market share and carefully navigated through significant regulatory change over the period," she said.
Customer deposits rose 3.4 percent in the six months from September, while net loans and advances rose 3.8 percent, including a 7 percent increase in home loans to more than $100b.
However, Watson said rising interest rates and inflation were creating challenges for small and medium sized businesses as consumers begin to tighten their belts.
"Many of our business customers tell us that borrowing more money is often not the solution," she said, adding that non-home lending to businesses and institutions was muted over the period, but still rose by $900m.
"While we do work with those seeking additional working capital support, many are using their existing cash resources or facilities."
Watson said provisions for bad debts were broadly flat, with a $20m release recognised for the half.
She said the bank's funds management business had managed through significant market volatility over the period.
The transfer of KiwiSaver default customers in December to newly-appointed default providers meant KiwiSaver funds under management dropped overall by $665m to $18.5b from $19.1b
However, she said bank still maintained its position as New Zealand's biggest fund manager and KiwiSaver provider managing more than $37b in investments for more than 650,000 investors.