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Preliminary Final Report/Media Release/Financial Statements

Document date:  Thu 25 Oct 2001
Published:  Thu 25 Oct 2001 14:12:56
Document No:  182866
Document part:  R
Market Flag:  Y
Classification:  Preliminary Final Report , Full Year Accounts , Dividend Record Date , Dividend Pay Date , Dividend Rate

AUSTRALIA AND NEW ZEALAND BANKING GROUP       2001-10-25  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

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CHIEF FINANCIAL OFFICER'S REVIEW (CONTINUED)

GEOGRAPHIC SEGMENT - AUSTRALIA            HALF YEAR      FULL YEAR
                                            SEP 01    SEP 01   SEP 00
                                               $M        $M      $M

Net interest income                         1,453     2,867     2,623
Fee income                                    722     1,407     1,268
Other operating income                        271       547       465
Operating income                            2,446     4,821     4,356
Operating expenses                         (1,145)   (2,276)   (2,226)
Profit before debt provision                1,301     2,545     2,130
Provision for doubtful debts                 (226)     (403)     (349)
Income tax expense                           (349)     (712)     (581)
Net profit after income tax before           
 abnormal items                               726     1,430     1,200
Net prior period abnormal profit                -         -       171
Net profit attributable to members of
 the Company                                  726     1,430     1,371
RATIOS EXCLUDE ABNORMAL ITEMS               
Net interest average margin                  2.95%     2.96%     2.95%
Return on risk weighted assets               1.49%     1.49%     1.39%
Operating expenses to operating income       46.6%     47.0%     50.9%
Operating expenses to average assets         1.79%     1.79%     1.89%
Net specific provision                        297       474       238
Net specific provision as a % of average 
 net advances                                0.55%     0.45%     0.25%
Net non-accrual loans                         492       492       393
Net non-accrual loans as a % of net 
 advances                                    0.46%     0.46%     0.38%
Total employees                            16,152    16,152    16,570
Lending growth                                1.3%      3.1%     16.0%
Total assets                              133,035   133,035   127,306
Risk weighted assets                       98,236    98,236    93,809

Profit after tax in Australia increased by 3% to $726 million in the 
second half. There was a net positive impact on the first half result 
from several one-off items, including our strategic investment in St 
George (profit after tax $65 million) and write down of various equity
investments (loss $41 million), implying underlying growth of 7% in 
profit after tax in the half.

The main influences on the result were:

* net interest was up 3% ($39 million) due to lending growth of 2%, 
primarily in mortgages, partly offset by a contraction in the average 
margin

* solid growth in fee income in Institutional Banking and Personal, 
from transaction volume growth and new fee initiatives

* increase in lending offset by securitisation of $2 billion of 
mortgages

* excluding the one-off items described above, other operating income
increased 24% ($53 million), due to an increase in income from
hedging activities, increased income resulting from the AASB 1038
accounting impact (refer further on) and higher income from Wealth
Management product sales

* operating expenses increased 1% ($14 million), partly due to 
non-lending losses, "Perform, Grow and Breakout" program costs and 
restructuring costs

* increased economic loss provision charge, reflecting an assessment 
of the impact of September 11 (refer back) and an increase in loss 
rates in the Personal non-mortgage lending book

* net specific provisions were $120 million higher reflecting the 
weakened economy and potential losses on certain larger corporate 
exposures


GEOGRAPHIC SEGMENT - NEW ZEALAND         HALF YEAR      FULL YEAR
                                            SEP 01    SEP 01   SEP 00
                                               $M        $M      $M

Net interest income                           274       520      477
Fee income                                    153       296      273
Other operating income                         40        79       63
Operating income                              467       895      813
Operating expenses                           (223)     (455)    (450)
Profit before debt provision                  244       440      363
Provision for doubtful debts                  (26)      (45)     (35)
Income tax expense                            (66)     (117)     (87)
Net profit after income tax before           
 abnormal items                               152       278      241
Net prior period abnormal profit                -         -      (31)
Net profit attributable to members of
 the Company                                  152       278      210
RATIOS EXCLUDE ABNORMAL ITEMS               
Net interest average margin                  2.66%     2.63%    2.63%
Return on risk weighted assets               2.04%     1.91%    1.70%
Operating expenses to operating income       46.9%     49.9%    54.9%
Operating expenses to average assets         1.96%     2.04%    2.19%
Net specific provision                         32        42       42
Net specific provision as a % of average 
 net advances                                0.37%     0.24%    0.25%
Net non-accrual loans                          48        48       33
Net non-accrual loans as a % of net 
 advances                                    0.27%     0.27%    0.20%
Total employees                             3,683     3,683    3,918
Lending growth (including FX impact)          1.4%     11.0%     5.1%
Lending growth (excluding FX impact)          1.4%      1.0%    11.1%
Total assets                               22,337    22,337   20,354
Risk weighted assets                       15,147    15,147   13,578

Profit after tax in New Zealand increased by 21% to $152 million in 
the second half.

The main influences on the result were:

* increased net interest income, driven by modest lending growth, with
margins benefiting from falling interest rates

* increased fee income, reflecting a strong result from corporate 
financing activities, higher transaction volumes, and growth in the 
contribution from the cards business

* operating expenses have been well contained in the second half, and 
reflect reduced staff numbers

* increased economic loss provisioning charge, reflecting an 
assessment, of the impact of September 11 (refer back)

* increased net specific provisions, due mainly to higher provisions 
in the mortgage portfolio

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