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Asian focus paying dividends for ANZ

ANZ Bank’s (ASX: ANZ) focus on Asian expansion is paying dividends with Greater China (China, Taiwan and Hong Kong) the company’s third largest source of revenues, behind Australia and New Zealand.

In a trading update, released today, ANZ said that its strategy has seen the group benefit from volume growth in Asia, despite soft economic conditions in Australasia, and cautious behaviour by consumers and business. The bank reported a cash profit of $1.53 billion, for the three months to December 2012, up 6% over the previous year. Statutory profit came in at $1.36 billion.

Global Markets income grew 26% to $544 million, while average customer deposits increased by 12.3%, suggesting consumers have been throwing their cash into bank accounts and term deposits.

Continuing competitive pressures in the deposit market meant the bank’s net interest margin, the difference between interest income and interest expenses, was slightly lower when excluding global markets.

Provisions for credit losses continues to fall, and now stands at $4.45 billion, down from $4.54 billion in September 2012, although the company confirmed that bad debts are expected to be about 10% higher in 2013 than the previous year.

Earlier this week, the Commonwealth Bank (ASX: CBA) reported a $3.8 billion profit for the December half, while National Australia Bank’s (ASX: NAB) profit hit $1.45 billion in the December quarter. Westpac Banking Corporation (ASX: WBC) is not due to report its half year results until May.

Foolish takeaway

This was a steady-as-she-goes result from ANZ, with no major surprises. The bank appears on track to meet its forecast of $3.08 billion in cash profit for the 2013 financial year, barring any unseen events.

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More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned.

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