Asia push, cost cuts set ANZ on course for $6b THE ANZ chief executive, Mike Smith, says the ambitious push into Asia is paying off for the bank, which is on track to post a profit of more than $6 billion this year despite a "soft" domestic economy. Drawing the curtain on Friday on a series of healthy results for the big four, ANZ recorded annual profit growth of 6.2 per cent in the December quarter, with cash earnings of $1.53 billion. The growth was helped by strong returns from its global markets business, tight control on costs, and a push to sign up more customers for home loans and deposits. In a sign its strategy to obtain a greater share of earnings from Asia may be bearing fruit, it said combined earnings from China, Hong Kong and Taiwan had become the third biggest source of profits, after Australia and New Zealand. Despite growing competition in the region squeezing margins in its overseas businesses, Mr Smith said earnings from Asia were rising. "Together with the major domestic businesses we have in Australia and New Zealand, our strategy is providing a unique connectivity to Asia's growth, and of course it's giving us greater earnings diversification," he told analysts. Although there were concerns China's growth rate slowed early this year, Mr Smith said he was "upbeat" about the state of its economy. Asia aside, ANZ's move to curb expenses also helped the bottom line. Costs fell slightly after the bank cut staff numbers last year. After a run of better-than-expected results from big banks in recent weeks, analysts said ANZ's performance was solid rather than spectacular. An analyst at Deutsche Bank, James Freeman, said ANZ would need to expand its margins to meet the market's expectations for profit growth. Some analysts also said the bank's performance was slightly behind its peers, and it had relied on strong contributions from its relatively volatile global markets division, where income grew by 26 per cent to $544 million. The big banks continue to post solid profit growth despite weak demand for credit and high deposit costs. A strong performance in home lending underpinned a record $3.78 billion half-year profit for Commonwealth Bank. NAB, the laggard among the big four last year, posted better-than-expected quarterly earnings of $1.45 billion. Westpac is not reporting on its performance this earnings season, but is tipped to benefit from improved margins in consumer lending. The growth in earnings is against a backdrop of weak demand for credit. Reserve Bank figures show annual growth in mortgage lending is at its slowest pace on record. But the profit margins in consumer banking have widened because of lower funding costs and the decision by banks to pass on only part of the cash rate cuts to borrowers. ANZ said the recent floods in Australia had not materially affected the bank's provisions for bad debts.