The Australia and New Zealand Banking Group Limited (ASX:ANZ) (NZX:ANZ) shared that their cash profit had plunged 42% to 3.76 billion for the year as Covid-19 increased requirements against loans which could go bad as borrowers struggle to recover from the impact of the pandemic.
The drop was primarily driven by a bad-debt provision of $2.74 billion as the economic slowdown puts pressure in both consumers and businesses.
The key revenue driver – net interest margin went down to 1.63% from 1.75% as low interest rates crammed the gap between interest paid out on deposits and received from loans in a competitive market.
Michelle Jablko, ANZ chief financial officer said the lower overnight cash rate was a key factor in the result.
ANZ shares fell 2.8% in early trading, leading a sharp plunge among major bank stocks and helping drag the benchmark S&P/ASX200 Index lower.
Meanwhile, the share price was trading at $18.570 with a market capitalisation of $54.42 billion at AEDT 03:26 PM.