Australia and New Zealand Banking Group, Australia's third-biggest bank, said Thursday its first-half net profit rose 16% to A$2.10 billion (US$1.752 billion) in the six months ended March 31 from A$1.81 billion a year earlier helped by the sale of the bank's vehicle leasing arm, Fleetpartners.
Cash earnings, which exclude one-off items and non-cash accounting items, rose 11.8% to A$1.936 billion. Nine analysts on average had forecast cash profit to be A$1.929 billion.
Australian banks have benefited from 15 straight years of economic growth and three-decade low unemployment. A four-year bull run in stock market and strong flows into pension market have also improved their wealth management businesses.
ANZ reiterated its previous forecast of 7% - 10% revenue growth and 5% - 7% cost growth for fiscal 2007.
"Conditions remain supportive of good growth," ANZ Chief Executive Officer John McFarlane said in a statement. "Looking ahead, the growth we are now seeing from Asia will become more material to the Group."
McFarlane said that the 21% growth in profit at ANZ's retail banking operations was a highlight, but said such growth levels may not be sustainable. "Personal should continue to do well, but may find it difficult to sustain such unusually high levels of growth."
ANZ market value of A$57.56 billion, has revived a push into Asia after reducing exposure to the region following the late 1990s Asian crisis. It has spent about A$1.18 billion buying largely minority stakes in banks from Indonesia to China.
In an interview with CNBC's "Asia Squawk Box", MacFarlene said, "our Asia Pacific business had a very strong performance. It was up 22.7%, which is pretty substantive". McFarlene added that ANZ was growing its institutional business as well as expanding its participate high-growth domestic markets in Asia.
Shares in ANZ -- which earlier this week secured control of online stockbroker E*Trade Australia -- have added 10.6% so far in 2007, outpacing 9.1% rise in the benchmark S&P/ASX 200 Index in the same period.
Australia's top four lenders, including the biggest bank National Australia Bank and Commonwealth Bank of Australia, dominate the industry, cornering about 80% of the banking assets.