ANZ lifts earnings to A$2.35bn

McFarlane called the ANZ result reasonable in a difficult environment. Story Tools

SYDNEY, Australia -- Australia's ANZ Bank has lifted net profit 8 percent to Aust.$2.348 billion ($1.64 billion) for the year to the end of September.

CEO John McFarlane said Friday the result for the country's fourth-largest bank was "reasonable", given the difficult environment for banks around the world.

McFarlane said the rising Australian dollar and softness in the international economy made for significant challenges, along with margin pressure stemming from low interest rates.

The Australian dollar is trading at 69.88 U.S. cents late on Friday, close to a six-year high touched earlier in the week.

McFarlane said the Australian and New Zealand economies were in sound shape. Even so, the year ahead would be at least as challenging as 2003, with fewer opportunities to lift earnings growth.

ANZ Bank simultaneously announced on Friday its long-expected purchase of National Bank of New Zealand for A$4.915 billion ($3.47 billion).

The deal is one of the largest in New Zealand corporate history. National Bank of New Zealand is a unit of British banking giant Lloyds TSB and is New Zealand's biggest bank.

ANZ said the purchase price excludes a dividend to Lloyds TSB of NZ$575 million from the National Bank's retained earnings prior to completion of the deal.

The merger will make ANZ the largest trading bank in New Zealand, with a 36 percent market share.

ANZ said it would maintain the National brand alongside the ANZ brand "for the foreseeable" future.

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