ANZ reported net profit of A$3.57 billion for the year to September – a fall of 40 per cent compared with the previous corresponding period. On a cash basis, profit fell 41 per cent to $3.7 billion. The fall in earnings was due to increases in the credit impairment charge and provisions, as well as several notable items including customer remediation, restructuring and impairments of Asian associates. ANZ chief executive Shayne Elliott said operating profit before provisions was “broadly flat”.

Income: Net interest income of $14 billion was down 2 per cent compared with the previous year. Other operating income fell 19 per cent to $3.6 billion. Total operating income of $17.6 billion was down 6 per cent compared with the previous year.

Expenses and cost to income: Operating expenses rose 3 per cent year-on-year to $9.4 billion. The ratio of operating expenses to operating income rose from 50.2 per cent in 2018/19 to 54.5 per cent in the year to September. The bank preferred to focus on expenses from continuing operations and excluding notable items, which rose from $8.5 billion to $8.6 billion.

Impairment charge: The credit impairment charge was $2.7 billion, compared with $794 million the previous year. The charge was $1.7 billion in the March half and $1 billion in the second half. The $2.7 billion charge was made up of $1 billion of individually assessed impairments (up from $777 million the previous year) and $1.7 billion of collectively assessed impairments (up from $17 million the previous year). The charge represents 43 bps of gross loans and acceptances – up from 13 bps.

Credit quality: Gross impaired assets fell from $2.59 billion in the March half to $2.46 billion in the second half – 40 bps of gross loans and acceptances. In the commercial loan book, 90-day delinquencies were flat year-on-year. In the Australian consumer portfolio, home, personal loan and credit card delinquencies were all down year-on-year.

Margin: The bank’s net interest margin fell 12 bps from an average of 1.75 per cent in 2018/19 to 1.63 per cent in the year to September. NIM fell further in the second half – down to 1.57 per cent. The bank said factors driving the margin down included the impact of low rates, changes in business mix (such as a move to fixed rate mortgages) and competition.

Return on equity and assets: ROE plunged from 10 per cent in 2018/19 to 5.9 per cent in the year to June. On a cash basis, ROE fell from 10.9 per cent to 6.1 per cent. ROA also fell heavily – down from 61 bps to 34 bps.

Earnings per share: EPS fell 40 per cent from 210 cents per share to 126 cents per share.

Dividend: ANZ declared a final dividend of 35 cents a share, fully franked, which represents a dividend payout ratio of 49 per cent of second half profit (35 per cent on a cash basis). The total payout for the year is 60 cents a share, compared with $1.60 a share in 2018/19. The dividend