* H1 cash profit $3.25 bln vs $2.95 bln
* H1 net profit $3.15 billion vs $2.71 bln
* Dividend rises 14 pct
* Net interest margin narrows to 2.15 pct
(Adds detail on cash profit, CEO comment, industry context)
SYDNEY, May 1 Australia and New Zealand Banking
Group Ltd posted an 11 percent rise in cash profit on
Thursday, boosting its dividend as strong growth in its Asia
business helped it beat analysts' expectations.
Cash profit, a measure that excludes one-off items and is
closely watched by industry analysts, was A$3.51 billion ($3.25
billion) for the six months to the end of March, up from A$3.18
billion a year ago.
Analysts had, on average, expected Australia's third-biggest
lender to report cash earnings of A$3.4 billion.
Australia's banks are on track for a sixth year of record
profits, bolstered by low interest rates and shrinking bad debt
provisions. Market leader Commonwealth Bank of Australia
reported a record half-yearly cash profit of A$4.27
billion in February.
ANZ is aiming to set itself apart by pursuing a pan-Asian
strategy and growing the proportion of earnings it gets outside
Australia. It is also targeting a larger share of Australian
"Our international business, particularly Asia, is firing on
all cylinders with revenue and profits again growing strongly,
and a sustained improvement in returns," Chief Executive Mike
Smith said in a statement.
The bank is returning A$2.3 billion to shareholders, thanks
to a 14 percent rise in the dividend to A$0.83 per share.
Net profit grew 15 percent to A$3.38 billion from A$2.93
billion, supported by a 43 percent jump in international and
institutional banking in Asia-Pacific, Europe and the Americas.
Net interest income, the difference between interest earned
and paid out, rose 9 percent.
The quality of ANZ's loan book improved with bad debt at its
lowest since September 2008. It sees bad loan provisions falling
about 10 percent in the year to September 2014.
However, Smith cautioned that competition was putting
pressure on the bank's Australia business and said growth in
some segments remained subdued, without specifying.
ANZ's net interest margin, a key gauge of a bank's
profitability, narrowed 9 basis points to 2.15 percent from a
Since the 2008 global financial crisis, mortgages and
consumer businesses have generated about 35 to 40 percent of
Australian bank earnings, making them the primary driver of
profit growth for the so-called "Big Four" - ANZ, CBA, National
Australia Bank and Westpac Banking Corp.
Record low interest rates, currently at 2.5 percent, have
filtered through to higher house prices and home building while
boosting household wealth and giving consumers the confidence to
start spending again.
ANZ had the highest deposit and loan growth of the Big Four
at 10.7 percent and 9.7 percent respectively, for the last
fiscal year, according to Thomson Reuters Starmine.
($1 = 1.0793 Australian Dollars)
(Reporting by Swati Pandey; Additional reporting by Tripti
Kalro in Bangalore; Editing by Jane Wardell and Stephen Coates)