ANZ says home loan applications fall 12%, records A$1.9 billion quarterly profit

Australian lender ANZ Group reported a 12% decline in home loan applications since the Labor government removed property investment tax concessions. The bank announced a A$1.9 billion (US$1.3 billion) cash profit for the third quarter, aided by a 1 basis point increase in its net interest margin to 1.54%. The improved profitability measure, combined with a 3% reduction in costs to A$2.75 billion, led ANZ's shares to rise by up to 3.4% on Thursday, outperforming the S&P/ASX200's 0.4% decline.

Analysts welcomed the better cost performance, while Citigroup's Thomas Strong expected the market to appreciate the performance. Despite three interest rate hikes this year, ANZ's bad-debt charge for the quarter was A$102 million, lower than forecasted A$205 million. Stable non-performing loans and a lack of growth in these loans, even as property prices fell about 2% over four months, contributed to the bank's strong bottom line.