RBA interest rate hike will force Australian economy ‘very different’: ANZ

ANZ Bank posted a slight drop in cash profits and kept its dividend stable for the half, but chief executive Shayne Elliott said the bank is positioned for growth as the economy enters a new phase with the rise official interest rates.

The big four banks on Wednesday morning announced cash profits of $3.2 billion for the six months ending March 31, down 3% from the corresponding period, and shareholders will receive an interim dividend of 72¢ per share for the second consecutive year.

ANZ chief executive Shayne Elliott said the bank “will continue to adjust our risk appetite, business metrics and investment priorities as needed”. Credit:Every Meitzel

“We are on track to grow in line with the major Australian banks by the end of our fiscal year, but we will do so taking into account the performance of our margins,” Elliott said.

Elliott said boosting the bank’s productivity remained a key objective as the industry headed into a more restrictive economic backdrop following the Reserve Bank’s 25 basis point cash rate hike on Tuesday. ANZ will pass on the full value of rising rates to mortgage customers when the era of super-cheap mortgages ends, as will its main rivals.

“Looking forward, the economic environment will likely be very different, and we will continue to adjust our risk appetite, business metrics and investment priorities as needed,” Elliott said.

“We are already seeing increased demand from our commercial customers, and we are well positioned to continue supporting them as they navigate a world of higher inflation and higher interest rates.”

ANZ Bank lost market share in the lucrative mortgage market during the pandemic housing boom due to an overreliance on manual processing that slowed approval times.

Morningstar banking analyst Nathan Zaia said ANZ’s home lending issues were well known, but the bank continued to lag its peers in brokerage channels.

“There is probably still work to be done to speed things up. And that’s kind of what hurts those results,” Zaia said. “Revenues are not increasing, but they have to invest to become competitive again.”

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