ANZ H2 underlying profit tops forecasts

SYDNEY Wed Oct 24, 2012 5:03pm EDT

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SYDNEY Oct 25 (Reuters) - Australia and New Zealand Banking Corp said second half underlying profit rose 7.4 percent, beating expectations on tighter costs and Asian expansion and taking full-year earnings to a record for a third-straight year.

ANZ, which wants to earn a third of its annual profit in Asia by 2017 as growth in Australia slows, reported underlying second-half profit of A$3.04 billion, compared with A$2.83 billion a year ago and A$2.95 billion expected by analysts.

Full-year underlying profit, which excludes one-offs, non-cash accounting items and investment gains or losses, was a record A$6.01 billion.

Australian banks are expected to post a combined profit of more than $25 billion in 2011/12, marking a third straight year of record profits. But profit growth has slipped to a three-year low due to weak loan demand, while bad debts are set to rise as the economy cools. (Reporting by Narayanan Somasundaram; Editing by John Mair; Editing by Richard Pullin)