anz reports above expectations

ANZ Bank's Profit Falls on Bad Debts, Funding Costs (Update1)

By Stuart Kelly

April 23 (Bloomberg) -- Australia & New Zealand Banking Group Ltd., the nation's third-largest, said first-half profit fell 7 percent as bad debts and funding costs rose.

Net income fell to A$1.96 billion ($1.86 billion), or 98.6 cents a share, in the six months ended March 31, from A$2.1 billion, or A$1.10 a share, a year earlier, the Melbourne-based bank said in a statement today. That compared with a A$1.85 billion median estimate of five analysts surveyed by Bloomberg.

ANZ set aside A$980 million for bad debts, predicting rising defaults as higher interest rates curb economic growth. The bank, which is examining its role in the collapse of securities firm Opes Prime Group Ltd., also provided funding to indebted Centro Properties Group.

``The company is struggling to come to terms with its poor credit decisions,'' said Brett Le Mesurier, an analyst at Wilson HTM in Sydney, before the results were released. ``Directors are in a state of shock at the mess they find themselves in and are not confident that the worst is over.''

To contact the reporter for this story: Stuart Kelly in Sydney [email protected]
Last Updated: April 22, 2008 18:17 EDT