ANZ has reported a statutory profit after tax of $1.55 billion for the half-year ending March 31, 2020, marking a 51% decline compared to the previous period. The decrease is attributed mainly to credit impairment charges totaling $1.674 billion, with $1.031 billion set aside as reserves for COVID-19 impacts. Additionally, investments in Asian associates were impaired by $815 million due to the pandemic's effects.
The bank's cash profit from continuing operations fell by 60% to $1.41 billion, and cash earnings per share also dropped by 60% to 50 cents. ANZ's Common Equity Tier 1 Capital Ratio stood at 10.8% as of March 31, 2020, while its return on equity decreased to 4.7%.
ANZ has decided to defer its decision on the interim dividend for 2020 until there is more clarity regarding COVID-19's economic impact.
Shayne Elliott, ANZ Chief Executive Officer, stated: "Firstly, our thoughts are with those who have been directly impacted by COVID-19, particularly those who have suffered from the health impacts, as well as the millions of people who are now facing financial uncertainty."
Elliott emphasized that ANZ entered this crisis in a strong position due to efforts over the past four years to simplify business operations and strengthen its balance sheet: "Our experienced management team has implemented a four-pronged plan focused on protecting the things that matter."
The CEO highlighted customer support initiatives during this period: "We are already assisting 180,000 customers with deferrals on loan payments," adding that ANZ provided "$16 billion in additional lending" primarily aimed at long-term institutional clients.
From an operational standpoint, Elliott noted that more than "95% of our people [are] working from home" while maintaining essential banking services.
On ANZ’s financial performance before the crisis hit, Elliott commented: “This was a reasonable result given the tough trading conditions being experienced before the crisis hit.”
David Gonski, ANZ Chairman said about deferring dividends: “This decision is not about our current financial position and ANZ has not received any concerns from APRA regarding our level of capital.”
ANZ launched support packages for retail and commercial customers in Australia and New Zealand which included options like loan payment deferrals up to six months.
In terms of credit quality during this period marked by COVID-19 uncertainties, total provision charges increased significantly.
Looking ahead amid ongoing challenges posed by COVID-19 pandemic disruptions globally across sectors including finance industry players such as banks like themselves; Shayne Elliott remarked optimistically about future prospects despite difficulties anticipated over coming months saying: “While dealing with immediacy... we are not sitting idle waiting for changes... we know there will be opportunities.”