ANZ reported an after-tax profit of $1.28 billion for the six months ending March 31.
This marks a 21% increase compared to the same period last year.
The bank said a notable part of the profit increase was due to the strong performance in the foreign exchange and interest rate hedging markets.
Chief executive Antonia Watson noted that, excluding gains from hedging, the bank’s cash net profit after tax was $1.16 billion – an increase of just 3% compared to the previous six months.
“Our performance reflects the broader economy we operate in. With revenue and costs largely flat, our half-year result demonstrates consistent performance,” Watson said.
Home loan customers, as Watson explained, are also starting to benefit from declining interest rates.
“Many Kiwis are starting to feel the benefits of a lower inflation and interest rate environment, and our farmers are seeing strong commodity prices,” she said.
“By the end of this year, around 86% of our customers with a fixed interest rate higher than 6% will roll off onto lower rates.”
“These borrowers could potentially see 100 basis points or more coming off their home loans when they refix. For someone with a $500,000 loan, this could mean monthly savings of around $260 in repayments.”
But the ongoing global uncertainty is expected to make businesses more cautious about taking risks for a while longer, which will likely slow the recovery in investment and employment.
“Kiwis are very aware of what is going on in the economy, and we are seeing this play out through our customers’ behaviour,” Watson said.
Household behaviour was marked by a stronger focus on repaying debt faster.
Watson said that nearly 40% of home loan customers were at least six months ahead on their payments, and 45% had a savings buffer of $5,000 or more.
“While there are still challenges ahead, we’re seeing encouraging signs that New Zealand’s economy has some firm foundations and there are green shoots.”
“It’s important to note that while it is now looking like it will take a little longer, the New Zealand economy is forecast to continue to improve as the impacts of interest rate cuts work their way through,” she said.