ANZ Group reports higher late mortgage payments in stiff market By Reuters

(Reuters) – ANZ Group Holdings said on Thursday late mortgage repayments past 90 days edged higher in the June quarter but were still below historic levels while logging higher customer deposits in a stiff market.

The country’s fourth-largest bank is still dealing with rising financial stress among mortgage customers as higher cash interest rates put pressure on its margins.

While banks have benefited in a high interest rate environment, the sector is now facing headwinds as an unprecedented surge in borrowing costs and inflationary pressures were pushing up debt arrears.

“Liability portfolio mix continued a shift towards higher interest rate, lower margin, savings accounts and term deposits,” ANZ said in a statement.

The company said net loans and advances for its Australian retail and commercial segment grew 2% in the third quarter, while it logged a rise in customer deposits across all divisions.

ANZ recorded a continued growth in retail and institutional customer deposits while flagging a marginal rise in its gross impaired assets.

ANZ also posted a 3% drop in its quarterly exposure at default (EAD), a metric which predicts the amount of loss a lender may incur if the loan is not repaid.

The company’s shareholders in December had voted to establish a new holding company to segregate its banking and non-banking operations, a method several global banks have adopted.

The bank, which is facing regulatory headwinds in its acquisition of insurer Suncorp’s banking arm, said its common equity tier 1 ratio, a closely watched measure of spare cash, was 13.5% as at June-end, down from 13.2% as at March-end.

($1 = 1.5569 Australian dollars)