ANZ pulling in profits but shedding advisers

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ANZ has released its half year results yesterday, boasting a statutory profit after tax of $2.9 billion up 7% compared to the previous half.

The bank announced that the number of financial planners grew 9% over the half, but the report showed numbers of aligned advisers at 1,911 – down 9% from 2,109 in the September half. When Wealth Professional asked about the numbers, ANZ CEO Mike Smith said they were part of an intentional decision.

“There has been a move to be more branch-based... that’s something that is a very conscious decision and that’s something that will continue.”

It could be working to their advantage, with advisers bringing in an increase in risk sales, up 21% per adviser. Nine seems to be the lucky number, with Wealth solutions held by ANZ customers also growing 9% PCP. ANZ Smart Choice Super is seeing new account openings at the rate of more than 800 per week.

IG market strategist Evan Lucas said the dividend growth shown in the results will impress investors. “Expectations had been for an interim dividend of 68 cents; ANZ returned with 73 cents fully-franked dividend, an 11% jump on the previous period. The beat here will impress as ANZ had been expected to be moderate at best versus its peers, and this might just see it legging up on NAB and WBC.

“ANZ is currently lagging in last place in the current bank rally, which started back in July 2012. What might moderate the pick-up is the fact that ANZ is looking to even out the difference across the halves to be more ‘even’.”

Return on equity (ROE) also beat expectations, said Lucas, up 80 bps to 15.5%, as earnings growth from efficiencies kicked in and some initial benefits from the cost reductions hit the books. The only major blemish was earnings per share at 117 cents, up 7% on the period, but this is below expectations of 118 cents.

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