MELBOURNE, Australia--Australia & New Zealand Banking Group Ltd.'s (ANZ.AU) revenue shrank modestly in the latest quarter but the lender said it reduced costs and its lending margin was stable in a fairly benign credit environment.
The bank, one of Australia's largest, said its underlying earnings rose over the financial third quarter against the first half of the year but revenue fell 0.3% against the average of the first two quarters, in part reflecting a normalization of its markets business after an unusually strong period.
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Expenses for the three months through June were reduced by 1%.
ANZ said its unaudited net profit for the quarter was 1.67 billion Australian dollars (US$1.31 billion). No year-earlier figure was disclosed.
Cash earnings--a measure that strips out revenue hedges, treasury shares and one-time items and is the basis for dividend payouts--were A$1.79 billion for the period, which the bank said was up 5.3% on the average of the first two quarters of the financial year.
The bank in its quarterly update said its net interest margin--a profit measure based on the difference between the rate at which a bank borrows and lends--was stable, or up several basis points if its markets business was excluded. Like its peers, the bank has increased mortgage rates to counter rising funding costs and in response to regulatory demands to cool growth in lending to property speculators.
ANZ said it its residential mortgage lending had outpaced the broader industry, primarily driven by loans to owner-occupiers.
"Although we are in period of lower sector revenue growth, with some parts of the economy experiencing challenges, credit quality has improved," Chief Executive Shayne Elliott said.
He added the operating environment for the bank was "pretty steady," with some signs of improvement in Australia's economy. "Our business is kind of ticking along pretty well," Mr. Elliott said.
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(END) Dow Jones Newswires
August 14, 2017 18:33 ET (22:33 GMT)