"Nearly three years ago ANZ acquired The National
Bank in New Zealand, to become ANZ National. At the
time, we said it would be a very different acquisition,
and it has been. The biggest point of difference was
our decision to keep both the ANZ and The National
brands, which surprised a lot of people.
Three years on, that has proven to be absolutely the right
strategy, as more customers bank with ANZ National than
before the merger, and revenue attrition was much lower
than we anticipated. We have also managed to retain
a stable and experienced management team. With the
integration period now over, our focus has shifted from
defending our customer base to growing the business.
Just as we had a very different approach to the
acquisition and integration, we are taking a very different
approach to our new focus on growth. We have retained
our specialised business model which drives a focus
on customer needs and solutions. Our portfolio of nine
brands, of which ANZ, The National, and UDC are the
largest, enhance our customer reach and open up new
growth options.
When we combine our brands together, we are by far the
biggest player in the market. Our scale provides us with
the ability to invest more than our peers in areas such
as customer analytics and product innovation, and to
provide support to customers looking to grow. Our size
also means we have a wider range of challenging roles.
This helps us to attract the best talent in the market. In
a people industry like banking, that is essential.
With our ongoing investment in the business, the
commitment of our people, and the results we have
already achieved together, I am confident that we
have a strong future in New Zealand.”
Just as we had a very different approach to the
acquisition and integration, we are taking a very
different approach to our new focus on growth.
Our financial performance
(NZ$m)
2005
2006
%
Income
2,571
2,756
7%
Operating Expenses
(1,181)
(1,254)
6%
Profit before Provisions
1,390
1,502
8%
Provison1
(157)
(20)
(87%)
Tax & OEI
(394)
(476)
21%
Profit after Tax
839
1,006
20%
Cost to Income(CTI)
45.9%
45.5%
-
Staff (FTE)
9,333
9,392
1%
1 Provision for Credit Impairment
This year we had a much improved financial
performance from our New Zealand business,
with earnings up 20% in New Zealand dollar
(NZD) terms. Revenue growth of 7% was driven by
13% growth in lending assets, and 5% growth
in deposits. The New Zealand market continues
to be competitive, with net interest margin down
21 basis points over the year, although margins
stabilised in the second half.
We have continued to invest in our business,
with expense growth of 6%, however our Cost to
Income ratio still improved from 45.9% to 45.5%.
The credit quality environment in New Zealand
remains healthy, and as a result the provision for
credit impairment fell 87% to just NZ$20 million.
While profit was up 20% in NZD terms, a
weakening in the NZD actually resulted in the
Australian dollar profit being up 14%.
