(Reuters) – Australia’s No. 3 lender, Australia and New Zealand Banking Group Ltd (ANZ.AX), on Thursday posted an 18 percent jump in annual cash profit on cost-cutting efforts, following the partial sale of its wealth management arm earlier this month.

FILE PHOTO: The logo of Australia and New Zealand Banking Group Ltd (ANZ) is pictured on a local branch in Sydney in this April 30, 2014 file photo. REUTERS/David Gray/File Photo

Cash profit, which excludes various one-off items, was A$6.94 billion ($5.34 billion) for the year ended Sept. 30, compared with A$5.89 billion in the prior year. The bank’s statutory net profit of A$6.41 billion, an increase of 12 percent, came in slightly below the A$6.87 billion average estimate of nine analysts surveyed by Thomson Reuters I/B/E/S.

In the prior-year period, the bank recorded its weakest profit in five years as a result of A$1.1 billion in restructuring charges and a spike in bad debts.

”ANZ is becoming a simpler, more focused bank with the capacity to quickly adapt to the changing environment and invest in the significant organic growth opportunities that exist in our core businesses, ANZ Chief Executive Officer Shayne Elliott said in a statement.

ANZ said last week it had sold its stake in Philippines-based Metrobank Card Corporation to Metrobank, and had split its wealth management business to sell the pension unit to IOOF Holdings (IFL.AX) for A$975 million.

Those moves came amid a broader trend of Australian banks quitting non-core and scandal-hit divisions to boost capital.

ANZ’s common equity Tier-1 capital ratio at September end rose to 10.6 percent from 9.6 percent a year ago, marginally above the Australian Prudential Regulation Authority’s target of at least 10.5 percent.

The net interest margin, or the difference between what a bank pays to borrow money and what it charges customers for loans, slipped by eight percentage points, weighed by a new mortgage tax.

($1 = 1.2994 Australian dollars)

Reporting by Shashwat Pradhan in Bengaluru; editing by Stephen Coates, Byron Kaye and G Crosse

Our Standards:The Thomson Reuters Trust Principles.

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