Adds dividend details, background
Oct 29 (Reuters) - Australia and New Zealand Banking Group Ltd ANZ.AX reported a 42% drop in full-year cash profit and said on Thursday it would pay a lower final dividend, as loan losses escalated due to economic challenges triggered by the COVID-19 pandemic.
Australia's fourth-largest bank declared a final dividend of 35 Australian cents per share, down from last year's payout of 80 Australian cents per share, and in line with a directive by regulators, insisting that payouts be less than half the profit for the rest of the year.
With the Australian economy in its first recession in three decades and wage growth crawling at its weakest pace on record, banks' growth prospects and margins are under pressure amid record-low interest rates and more debt likely going bad.
Cash profit from continuing operations was A$3.76 billion ($2.68 billion) for the year ended Sept. 30, compared with A$6.47 billion a year earlier. It beat an estimate of A$3.51 billion, according to a Reuters poll of eight analysts.
This week, ANZ warned of an after-tax hit of A$376.4 million to its cash profit in the second-half, largely due to remediation costs.
($1 = 1.4027 Australian dollars)
(Reporting by Nikhil Kurian Nainan and Shriya Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta)
((NikhilKurian.Nainan@thomsonreuters.com; Twitter: @NikhilKurianN; +91 806 182 2724))
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