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All eyes on ANZ

This morning Australian and New Zealand Banking Corporation (ASX: ANZ)(“ANZ”) released its 2013 half-year results, highlighting healthy growth and profit throughout domestic and international divisions.

The report detailed increases to statutory profit ($2.9 billion), cash profit ($3.18 billion) and dividend payments to shareholders that have impressed shareholders and analysts alike. An important performance highlight was profit before provisions (PBP), which increased 7%, reflecting strong growth in international and institutional banking from its ‘Super Regional Strategy’ launched back in 2007.

EPS also increased 7% to 117.0 cents, and the interim dividend uplift of 11% came from stronger earnings, a move that hopes to progressively rebalance to a more even distribution of its dividend payments. Something investors will be very pleased with.

Commonwealth Bank (ASX: CBA), Westpac (ASX: WBC) and NAB (ASX: NAB) will be paying close attention to not only local figures, but also to ANZ’s global operations, which saw revenue increase 11% to $1.1 billion compared to previous corresponding period. The report is released at a key time for ANZ as it seeks to expand its business throughout Asia and is the only bank of the big four to have less than 70% of its revenue generated from Australian customers.

ANZ Chief Executive Officer Mike Smith reinforced that their commitment to the Super Regional Strategy is beginning to take a hold and the “good performance” shows that the bank has been working hard for “the significant opportunities being created by Asia’s fast-growing economies”.

However, Mr Smith also pointed out ANZ’s ability to “strengthen our franchises in Asia Pacific, Australia and New Zealand” which has again produced a lower cost-to-income ratio and achieved a higher return on equity. This is something the CBA, NAB and Westpac will be watching closely as they know ANZ’s ability to remain locally cost effective has driven its profit margins and share price up in recent years.

Foolish takeaway

The news today has ticked all the boxes for this investor. Not only has ANZ retained its strong and sustainable businesses in Australia and New Zealand but the international division has begun to show its ability to impress with strong revenues.

Taking advantage of the booming markets in Asia will see ANZ move ahead in leaps and bounds and revenue is sure to grow immensely as these economies look for finance. Although largely flat from previous half compared to the previous corresponding period, commercial Asia revenue grew 32% and ROE improved further which confirms that investors can expect big things from this big four bank.

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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 contributor Owen Raszkiewicz owns shares in ANZ.

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