ANZ New Zealand has reported a $1.259 billion net profit after tax for the six months to 31 March, a result the bank’s chief executive has described as solid but which she warned will be hard to repeat in the second half if the Iran war keeps disrupting global trade.
The country’s largest bank’s half-year profit was down 1 percent or $18 million on the same period a year earlier, an outcome ANZ said reflected lower hedging gains rather than weaker underlying business performance. On a cash basis, which strips out one-off items, profit actually rose 2 percent to $1.238 billion compared with the second half of 2025, according to the bank’s official announcement.
ANZ chief executive Antonia Watson said the result showed the bank had held its ground in a tough operating environment. “This is a solid and consistent performance in a very competitive market, which is important in times like these,” she said.
But she was openly cautious about what comes next. “Confidence was beginning to return as lower interest rates flowed through to customers” before the Middle East conflict broke out, Watson said in comments to RNZ. “Events in the Middle East are a reminder of how quickly global shocks can ripple through our economy and undermine what remains a fragile recovery.” Watson said “current geopolitical headwinds may curtail momentum in the second half of the year” and pointed to “the combination of inflation, interest rates and fuel costs” as the main pressure points facing households and businesses.
The bank lifted its credit impairment charge to $22 million for the half, after taking a $5 million write-back in the same period last year. Total credit impairment provisions sit at $805 million, money set aside for loans that may go bad. “We continue to hold credit impairment provisions as a safeguard against future uncertainty, and our capital position, an important measure of a bank’s financial stability, remains very strong,” Watson said. ANZ’s regulatory capital is now more than $19 billion, with a total capital ratio of 17.1 percent, well above the 14.5 percent the Reserve Bank requires the country’s largest banks to hold.
Operating income climbed 5 percent to $2.669 billion while operating expenses fell 1 percent to $890 million, pushing the cost-to-income ratio down from 38.5 percent to 37.3 percent. Behind that improvement is a quieter story about jobs. ANZ’s New Zealand full-time-equivalent staff count fell by 162 over the year, leaving 6,675 people on the books at the end of March.
The pressure on margins continued to bite. The net interest margin, which is the gap between what a bank pays for deposits and what it charges on loans, slipped 5 basis points to 2.55 percent year-on-year. ANZ said the main culprit was deposit margin compression, a sign that competition for savings is keeping deposit rates higher than they would otherwise be even as lending rates fall.
The lending book grew 2 percent to $143.2 billion overall, with $118.9 billion of that in housing loans. ANZ said its mortgage book had expanded more slowly than the overall market — a notable shift for a bank that has long been the country’s biggest mortgage lender by some distance — while its business and agricultural lending grew slightly faster than the market. Customer deposits rose 3 percent to $118.6 billion. Watson said the bank had supported $15 billion of new home loan lending in the half and helped more than 4,800 first home buyers into a property.
Two figures in the result stand out for what they say about how households are coping. ANZ said 44 percent of its home loan customers are six months or more ahead on their repayments, and 48 percent hold a savings buffer of at least $5,000. That suggests a meaningful chunk of the bank’s mortgage book is well-positioned to absorb shocks. It also means the other half are not, and Watson’s commentary makes it clear ANZ is keeping a close eye on how those customers fare as fuel costs and the wider cost-of-living burden move through the economy.
The result lands at the same time as ANZ’s own Business Outlook survey is showing confidence has crashed from plus 32.5 in March to minus 10.6 in April, a drop the bank’s economists have called a wall of worry. Whether ANZ’s own forecast for a tougher second half plays out will likely depend on how quickly that worry feeds through into actual loan defaults, hiring freezes and slower business lending.
What did you make of the ANZ result? Are you ahead on the mortgage or feeling the squeeze? Drop a comment below and let us know what you’re seeing in your own household.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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