ANZ profit rises 53%, Senate to conduct banking inquiry: Economy roundup

ANZ has recorded a cash profit of $5.13 billion for the year to 30 September, up from $3.38 billion during the previous corresponding period, the company announced today.

Underlying net profit has risen 33% to $5.02 billion, while statutory profit has grown by 53% to $4.5 billion. The lender said it remains strongly capitalised, and that its Tier 1 capital is at 10.1%.

Chief executive Mike Smith said in a statement the result was pleasing. But he also noted recent comments made by shadow treasurer Joe Hockey regarding bank profits, and said the comments were “a shame”.

“I think it’s a real shame because when you think back over the last 20 years of economic prosperity that Australia has experienced, it’s been the result of a series of governments – the Hawke, Keating, Howard, and even with Rudd, Gillard – ensuring there is continual reform,” he said.

“I think it’s a real shame that the coalition, which had, I think, a very good track record in economic management, has now come down to the comments of Mr Hockey. It’s pure populism and I don’t think it serves anyone’s interests.”

Hockey continued his attack on the big banks last night, saying that the Government should consider removing the bank guarantee for larger lenders.

“There is a strong and compelling argument to have that funding guarantee in place for smaller players, but I’m not necessarily sure that a bank that makes a $4 billion profit, such as NAB did today, necessarily needs to continue to have that guarantee,” Hockey told ABC Television last night.

The comments come as independent senator Nick Xenophon has teamed up with the Coalition to launch an inquiry into competition in the banking sector.

“I think most people feel enough is enough,” he told ABC Radio. “What Australians are paying in ATM fees is a disgrace.”

“We’re reaching a tipping point where we need to have some concrete solutions to bring about reforms.”

The inquiry was announced this morning by the Senate, with Hockey saying the inquiry will examine charges and fees, competition and the ease of moving between banks as a customer.

“We can only get more competition by having real government action by putting in place some of the measures which are outlined in my nine-point plan,” he told reporters.

AMP has recorded a 53% drop in third quarter cash flows, but the company has also said assets under management have increased due to solid market conditions.

“This is in line with trends being seen more broadly across the industry,” AMP said in a statement.

Net cash flows in the three months to 30 September were $48 million, down by 53% from the previous corresponding period’s $103 million. Average AUM was 5% higher than the previous corresponding period, at $96.5 billion, the company said.

Shares higher despite negative Wall Street lead

The Australian share market has opened higher today, despite receiving negative leads from both Wall Street and European markets overnight.

The benchmark S&P/ASX200 index was up 47 points or 1.02% to 4695.6 at 12.10 AEST, while the Australian dollar remained below US97c following yesterday’s inflation data.

ANZ shares rose by 2.7% to $24.69, while Commonwealth Bank shares rose 1.3% to $50.20. NAB shares increased by 1.7% to $25.70, while AMP gained 0.7% to $5.52.

Arafura Resources says the Nolans rare earths project is set to go ahead, with the company having raised $90 million in a share placement.

“There was significant support for a placement, which has enabled sufficient funds to be raised to progress the Nolans Project through to the project financing stage and maintain the plan for first production of rare earth oxides in 2013,” the company said.

Meanwhile, the Tokyo Stock Exchange has said it is concerned that the Singapore/ASX merger will dilute its 5% holding in the Singapore stock exchange.

“To be frank, it is irritating,” TSE chief executive Atsushi Saito said at a briefing. The comments come as the Greens have also said they are concerned about the merger.

Elsewhere, QR National has said it remains confident of its coal haulage and profit forecasts, according to the Australian Financial Review, despite rival Asciano Group saying the rail sector is in trouble.

“The first quarter operating statistics have resulted in management becoming slightly more cautious about the full-year outlook,” Asciano chief executive Mark Rowsthorn said.

However, QR National told the publication operations are going well. “We remain confident of delivering on our profit and tonnage forecasts,” the company said.

Visa profit up 50%

Visa has recorded a 50% increase in quarterly profit, but the company’s shares have fallen 1.8% due to regulatory concerns and disappointment from investors.

“It was maybe not the blowout quarter some investors were expecting,” Signal Hill analyst Mayank Tandon told Reuters. “I think it’s understandable that we’re seeing some profit-taking, given that the results were good but not great.”

The company said it expects net revenue to grow between 11-15% during the 2011 financial year. Chief executive Joseph Saunders said the company plans to keep expanding, despite “a very challenging business environment”.

On Wall Street, the Dow Jones Industrial Average fell 43.18 points or 0.39% to 11,126.28.