ANZ shares are at their lowest level in a year as competition for home loans squeezes margins.

ANZ did not disclose profit for the quarter and said the group’s net interest margin had shrunk by 8 basis points, but added that rising interest rates in New Zealand would relieve pressure on the second trimester.

Australian lenders are battling narrowing margins in the face of fierce competition in mortgage lending, boosted by record low interest rates in Australia by the COVID-19 pandemic. Westpac issued a margin warning last week.

ANZ said “weaker” income from its market business in October would affect first-half results, although the unit’s performance in subsequent months was in line with trends seen in financial year 2021.

Although it reversed A$44 million ($31.2 million) of bad debt provisions during the quarter, changes to provide Australian retail and commercial customers with lower fee options would reduce its profit. annual operation of around A$140 million, she added.

“Given the uncertain impacts of reduced activity on asset quality going forward, we believe the bad debt benefit will likely be reviewed and investors will focus on lower than expected revenue,” Citi analysts said in a note.

ANZ shares fell 5% to A$25.73, their lowest level since February 17, 2021, while the broader market was down 0.7%.

In home loans in Australia, ANZ said it had made “solid progress” in improving its systems, with application times for simple loans now in line with other major lenders.

The bank, which has steadily lost share of the Australian home loan market since 2019, said in October that it aimed to grow its home loan portfolio in line with its larger peers by the end of the financial year in Classes.

ANZ also said it would consider extending its A$1.5 billion takeover, as it reported a common equity tier 1 (CET1) ratio of 11.6% as of December 31.

($1 = 1.4136 Australian dollars)

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