ANZ Bank braces for ‘very different’ economy after rate hike

Markets

ANZ Bank has posted a slight dip in cash profits and is keeping its dividend flat for the half-year, but chief executive Shayne Elliott says the bank is positioned for growth as the economy enters a new phase with the rise in official interest rates.

The big four bank on Wednesday morning reported cash profits of $3.2 billion for the six months to March 31, down 3 per cent from the corresponding period, and said shareholders will receive an interim dividend of 72¢ per share for the second year in a row.

ANZ chief executive Shayne Elliott. Credit:Elke Meitzel

“We are on target to grow in line with the Australian major banks by the end of our financial year, but will do so with an eye to our margin performance,” he said.

Elliott said lifting the bank’s productivity remains a key focus as the industry moves into a more contractionary economic setting following the Reserve Bank’s lifting of the cash rate by 25 basis points on Tuesday. ANZ will pass on the full value of the rate rise to mortgage customers as the era of ultra-cheap home loans comes to an end, and so will its major rivals.

“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,” Elliott 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.”

More to come.

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