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Summary
- ANZ has recorded a net profit after tax of $1.62 billion in 1Q FY21.
- ANZ Chief Executive Shayne Elliott was pleased with the result as the bank also helped customers with all the necessary lending.
- The total provisions reported during the Q1 FY21 was a net release of $150 million.
On 18 February 2021, Australia and New Zealand Banking Group Limited (ASX:ANZ) released its trading update for the first quarter ended 31 December 2020. The bank posted a net profit after tax of $1.62 billion and a cash profit from unaudited operations of $1.81 billion.
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Management commentary
ANZ Chief Executive Shayne Elliott acknowledged these numbers as a strong performance in these challenging conditions, highlighting the company’s discipline to execute their strategies efficiently and maintaining a robust portfolio of businesses.
The management was pleased with the result as it also helped customers with all the necessary lending critical to support economic recovery. The bank’s core businesses performed well during the quarter, and it has gained market share in an important home loan market in Australia. It also clocked a record home loan volume in New Zealand.
The diversified portfolio has again delivered a decent return for the shareholders, with a substantial contribution to the global markets. The management also noted that the revenue was down relative to the historic highs experienced at the end of last year.
The bank also scored higher margins on the back of higher volume growth in the targeted segments, coupled with the robust risk management and pricing strategies. The revenue for the entire group shot up by almost 4 per cent during the reported period.
Read More: ANZ’s CFO Michelle Jablko steps down, set to join Transurban
Credit Quality
The total provisions reported during Q1 FY21 was a net release of $150 million which included an individually assessed provision change of $23 million. The collective provision (cp) stood at 10 per cent of $1.7 billion set aside in the last financial year.
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As of 31 December 2020, the cp balance of $4.8 billion represents additional reserves of $1.42 billion compared to pre-COVID levels on 30 September 2019.
Stock Performance
ANZ’s share price was last traded at A$25.82 on 17 February 2021. The stock has been rallying for the last three months and has delivered a decent return of over 15 per cent. However, the stock is still down by 3.5 per cent in the one-year time frame.
