By Jane Wardell
SYDNEY, April 30 (Reuters) - Australia and New ZealandBanking Group Ltd, the country's fourth-largest bank,on Tuesday reported a 10 percent rise in first-half cashearnings to A$3.18 billion ($3.29 billion) and announced aforecast-busting dividend.
The result was slightly ahead of analysts' expectations of aA$3.14 billion profit, according to Thomson Reuters StarMinedata, as the bank booked solid earnings in international andinstitutional banking, and its Australian retail banking unit.
ANZ reinforced expectations of peak profits across theindustry this earnings season. It also boosted its dividend by11 percent to A$0.73, above the $0.67-$0.72 consensus averageforecast range.
Dividends at Australia's "Big Four" banks - ANZ, NationalAustralia Bank Ltd, Commonwealth Bank of Australia and Westpac Banking Corp - are in focus amidstrong investor appetite for what are seen as safe andhigh-yielding shares.
"The beat here will impress as ANZ had been expected to bemoderate at best versus its peers, and this might just see itlegging up on NAB and Westpac," IG Markets market strategistChris Evans said in a note.
ANZ shares were 4.2 percent higher at A$31.35 in early tradeon Tuesday, a five-and-a-half-year high.
ANZ, which is trying to emulate HSBC Holdings Plc by becoming a pan-Asian lender, said it intended to maintain afull year dividend payout in the range of 65 percent to 70percent of cash earnings.
The "Big Four" banks are expected to post combined recordcash profits of more than A$13 billion for the first half.
CBA, which reports on a different cycle to its peers, posteda record first-half cash profit of A$3.58 billion in February,when it also gave an upbeat outlook for the year.
Westpac is expected to report cash profit of A$3.4 billionon Friday and NAB is forecast to report cash profit of A$3.1billion on May 9, according to Thomson Reuters StarMine data.
SUPER-REGIONAL
ANZ Chief Executive Mike Smith said the bank's"super-regional" strategy, under which it wants to bring inbetween 25 and 30 percent of its total revenue from outsideAustralia and New Zealand by 2017. Its international armcurrently contributes around 20 percent of revenue.
The strategy was dealt a blow a month ago when Alex Thursby,the executive in charge of the push into Asia, quit to join theNational Bank of Abu Dhabi.
But Smith said the strategy had helped the bank reduce itscost-to-income ratio to 44 percent.
Profit in the company's international and institutionalbanking division rose 26 percent, while Australian retail andcommercial segments grew 6 percent and 8 percent respectively.
Provisions for bad and doubtful debts dropped 13 percent toA$599 million.
Smith said many of 2012's key trends had continued into thefirst half of 2013, including subdued credit growth, lowvolatility, low interest rates and deposit margin pressureacross all the bank's major markets.
Net interest margins, a key measure of core bank profits,were 2.25 percent, a 10 basis point decline on the correspondingperiod last year.
The results were first time ANZ has focused on cashearnings, which excludes one-offs and non-cash accounting items,for the half-year.
HSBC Holdings (HSBA)
