Key facts
- ANZ Group's third-quarter cash profit rose 1% to A$1.90 billion.
- Higher lending volumes and improved net interest margins supported earnings.
- Mortgage application values fell 5% excluding a government buyer scheme.
- Tax changes for property investors are impacting housing demand.
- Rivals Commonwealth Bank and Westpac have also seen declines in mortgage applications.
ANZ Group reported a slight increase in its third-quarter cash profit, reaching A$1.90 billion, driven by higher lending volumes and improved margins. However, the bank indicated a slowdown in mortgage demand following recent Australian tax changes that have impacted property investors.
Mortgage application values remained broadly unchanged from the previous quarter, partly due to participation in an Australian government scheme that allows buyers to purchase property with a deposit as low as 5%. Excluding the impact of this scheme, which was introduced in late March, mortgage application values decreased by 5% from the second quarter and were down 12% between the federal budget announcement and the end of July. This points to a weaker housing demand environment.
The decline in housing activity aligns with signals from competitors. Commonwealth Bank of Australia, the country's largest lender, reported a 15% drop in mortgage applications since property tax changes in May. Westpac, the third-largest bank, noted a 20% fall in mortgage applications and anticipates investor housing credit growth to halve next year. Australia's four major banks collectively control over 70% of the national mortgage market.
ANZ's earnings were also supported by a 2% rise in net interest income, excluding markets, from the first-half quarterly average. The bank's common equity tier 1 (CET1) ratio stood at 12.51% as of June 30, up from 12.4% at the end of March. Its group net interest margin improved by 1 basis point to 1.54% during the quarter.