ANZ New Zealand’s cash profit has slumped 29 per cent to $1.371 billion in the financial year to September 30 as the bank was hit by a rise in credit impairments driven by Covid-19.

The country’s largest bankwhich is owned by the ASX-listed ANZ revealed its financial results this morning.

ANZ New Zealand saw its operating income fall from $4.326b to $4.049b while its expenses also rose from $1.585b to $1.736b.

Net loans and advances were flat at $133b while its deposits rose from $109.2b to $120.9b.

But its credit impairment charges rose from $99m to $401m.

ANZ’s parent announced a net profit after tax of A$3.577 billion down 40 per cent on the prior financial year.

Its cash profits from continuing operations was down 42 per cent to A$3.76b.

In a statement the bank said the decrease was primarily driven by credit impairment charges of A2.74b, which increase from the prior year due to the impact of Covid-19 and a first half impairment of Asian associates of A$815m.

It will pay a dividend of A60c per share down from A$1.60 in the prior year.

ANZ chief executive Shayne Elliott said the bank could never have forecast 2020 – a year that starting with devastating bushfires in Australia and unwound with the waves of a pandemic that continues today.

“As a bank, we entered 2020 in robust condition. We have a strong balance sheet with record levels of capital and liquidity as well as provisions for potential future losses.”

Elliott said Covid-19 was contained in New Zealand and it remained well positioned to benefit from its subsequent economic recovery.

“While it was a tough revenue environment, given low interest rates and a focus on reducing or simplifying fees, we have maintained market leadership in our targeted segments.”

The ANZ New Zealand business had more than 529,000 home loan accounts with around 24,000 having received a deferral on their repayments.

As of October 15 there were around 10,000 accounts on a deferral plan – about 2 per cent of the bank’s mortgage book.

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