ANZboosted by slowdown in bad debts

AUSTRALIAN and New Zealand Banking Group (ANZ) continued the strong form of Australian lenders yesterday, reporting a rise in profits in the 10 months to the end of the year, as it lent more and saw lower levels of bad debt than expected.<br /><br />The bank said in a trading update that underlying net profit came in &ldquo;slightly above&rdquo; the equivalent period of last year, although it gave no figures.<br /><br />Chief executive Michael Smith, who has raised A$4.7bn (&pound;2.4bn) via a stock sale and dividend cut, said bad debts were reaching a plateau.<br /><br />&ldquo;In Australia and Asia, the economies are showing early positive signs of recovery, and although the cycle is still playing out, there are reasons for cautious optimism,&rdquo; said Smith.<br /><br />But he added that New Zealand, the only region in which the bank saw an increase in the rate of loan loss provisions, was likely to lag behind the rest of the region in its economic recovery.<br /><br />ANZ said that net loans and advances rose by three per cent during the 10-month period and added that provisions were lower than had been expected.<br /><br />But the bank repeated its forecast that charges would be up some 20 per cent from A$1.44bn in the first half of the fiscal year, due largely to its New Zealand operations.