In an ASX listing on Monday, ANZ said "structural headwinds", including the impact of rising rates in New Zealand and recent deposit pricing changes, had influenced an 8 basis points drop in the net interest margin in the three months through December.
In Australia, ANZ's balance sheet grew slightly in the first quarter FY22, but the bank cited high levels of refinancing activity in the sector as a key area of focus moving forward.
The bank confirmed that despite all headwinds, its credit quality environment has remained benign with a total provision release of $44 million during the quarter.
"This comprised a collective provision release of $122 million and an individually assessed provision of $78 million," the bank said.
ANZ also reported soft trading conditions within its markets business for the month of October would likely impact first half performance, despite stronger performance in the following months.
Moreover, it noted changes it is making to packages offered within its Australian retail and commercial business from March 2022 would provide customers with simpler and lower fee options.
"While better aligned to positive customer outcomes, the changes will have a negative transitional impact on other operating income in FY22 of around $140 million, spread evenly across the two halves," it flagged.
ANZ confirmed its capital position continues to provide flexibility to return further surplus capital to shareholders and flagged a possible increase in the size of the current on-market buy-back.
"Any decision will balance the importance of capital efficiency against maintaining an appropriately strong balance sheet and continued monitoring of the economic situation."
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
