Australia and New Zealand Banking Group
(ASX:ANZ) says it is on track to match its 2008 profit of $3.3 billion on strong revenue growth.
The bank says underlying profit after tax is tracking slightly above the comparable period in 2008.
In an update to the market the bank says strong income trends have continued driven largely by the performance of the institutional division, but charges for bad loans was weighing on profitability.
ANZ says that there has been a three-fold increase in its bad loans charge over the level recorded in 2008.
Impaired loans and derivatives were up 7 per cent for the June quarter, a slower rate of increase than in the previous two quarters.
The company says that its total provision charge is tracking slightly better than expected, however it expects the second half figure to be around $1.72 billion for the year.
ANZ says the increase in second half provisions has been driven entirely by its New Zealand business.
ANZ CEO Mike Smith says in Australia and in Asia, the economies are showing early positive signs of recovery and although the cycle is still playing out, there are reasons for cautious optimism.
Mr Smith says in New Zealand, economic conditions remain difficult with the recovery likely to be much slower.
ANZ recorded net profit of $3.3 billion in 2008, down from its high of $4.2 billion in 2007.
