ANZ's bottom line drops, but interest income up

The new branch was registered on January 5 to get around lending restrictions imposed by the Australian regulator, Australian Prudential Regulation Authority.

Its general disclosure statement (GDS) shows the main reasons for the drop was its $288 million in charges against profit for credit impairment, up from $93 million in the same period a year earlier, as well as its $166 million estimate of the cost of a proposed settlement with investors in two failed structured credit funds.

ANZ's net interest income actually rose 16.5% to $1.19 billion for the six months although other operating income fell 12% to $431 million. The latter is after the $166 million ANZ estimates will be its share of a proposed settlement with investors in the failed ING Diversified Yield Fund and ING Regular Income Fund.

Nevertheless, ANZ now values its 49% stake in ING New Zealand at $242 million, up from $201 million in March last year and $212 million in September last year. ANZ says it obtained an independent valuation of ING NZ at March 31.