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APAC

ANZ to take $376.4 million hit to second-half cash profit

FILE PHOTO: Office buildings and the ANZ logo are seen amidst the easing of the coronavirus disease (COVID-19) restrictions in the Central Business District of Sydney, Australia, June 3, 2020. REUTERS/Loren Elliott

(Reuters) - Australia and New Zealand Banking Group ANZ.AX said on Tuesday it expects to take an after-tax hit of A$528 million ($376.41 million) to its cash profit in the second half, primarily due to remediation costs.

The announcement from Australia’s fourth-largest bank, just two days before its full-year results are due, reflects continued pressure on bank margins amid record-low interest rates and credit losses due to the pandemic.

The A$528 million hit to cash profit also includes charges related to changes to the application of its software amortization policy and a write-down of goodwill in ANZ’s Pacific business, the bank said.

In aggregate, these items would have a 5 basis point impact on its common equity tier-one capital ratio.

Westpac Banking Corp WBC.AX has said it would take an $870 million hit to cash earnings in the second half, while National Australia Bank NAB.AX also warned of an $188 million charge for the same period last week.

ANZ will report full-year results on Oct. 29.

Reporting by Shriya Ramakrishnan in Bengaluru, Editing by Sherry Jacob-Phillips

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