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ANZ Bank says NZ unit 'performing strongly' in 1Q as cash profit falls 0.2%

Australia & New Zealand Banking Group says its New Zealand division performed strongly in the final three months of 2014 as cash profit slipped 0.2 percent, maintaining market share as lenders fought for mortgage customers and reaping gains from the merger of its National Bank and ANZ brands.

Cash profit, which strips out changes in the value of financial instruments, slipped to $415 million in the three months ended Dec. 31 from $416 million a year earlier, as net interest income edged up 4 percent to $717 million. Statutory net profit gained 8 percent to $425 million.

The Melbourne-based bank said its New Zealand unit, the country's biggest lender, expanded its balance sheet in the period, with a 5 percent increase in gross lending and a 7 percent gain in customer deposits. The lender showed continued gains from the 2012 merger of its brands and systems, in a benign credit environment.

"In New Zealand our market position is seeing us benefit from the economic upturn supported by further productivity outcomes," ANZ chief executive Mike Smith said in a statement.

ANZ's local division lifted annual cash profit 17 percent to $1.68 billion in 2014 as it cut down on duplicated costs from the merger programme and benefited from home loan growth.

The Australian bank reported group cash profit of A$1.79 billion in the three months ended Dec. 31, compared to A$1.73 billion a year earlier. Statutory net profit was unchanged at A$1.65 billion.

The New Zealand unit's retail banking sector reported a 2 percent decline in cash profit to $125 million while its commercial division lifted earnings 5 percent to $192 million.

ANZ's New Zealand branch had housing loans worth $62.75 billion as at Dec. 31 and non-housing loans of $40.59 billion. Term deposits were $34.2 billion at the balance date.

The dual-listed shares were unchanged at $37.18 on the NZX.