Medvedev’s sly dig at Bush

Russian President Dimitry Mevedev has seemingly taken a sly dig at former US President George Bush.

南宁桑拿

In an interview with ABC America’s George Stephanopoulos, Medvedev first complimented US President Barack Obama.

But after telling the host that he had met Obama sixteen times, Medvedev said throgh a translator the US President was ‘a thinker’, a trait which ‘distinguishes him from many people.’

When asked who he might be referring to by a chortling Stephanopolous, Medvedev smiled, before claiming that he didn’t want to offend anyone.

‘He’s eager to listen to his partner, which is a pretty good quality for a politician ‘, Medvedev said of Obama.

‘Because any politician is to a certain degree a mentor. They preach something. And the ability to listen to their partner is very important for the politician.’

Bush and Medvedev met while Bush was still in power, with the Texan calling his Russian counterpart a ‘smart guy.’

Bush was widely mocked when he met former President -and current Russian PM – Vladimir Putin, claiming he was ‘ able to get a sense of his soul’, after looking him in the eyes.

Hung parliament confirmed in Tasmania

The final seat in the Tasmanian parliament has gone to Greens candidate Paul O’Halloran of the Braddon electorate, confirming a hung parliament.

南宁桑拿

The result in Braddon means there are ten seats for the ALP, ten for the Liberals, and five for the Greens.

Libs eye power

Earlier on Wednesday, Liberal leader Will Hodgman cocked a trigger to shoot down Labor should Premier David Bartlett or his party renege on a promise to hand over power in the event of an evenly split hung parliament.

Mr Hodgman has set his sights on a no-confidence motion if Mr Bartlett goes back on his pledge to yield power in the event of a tie and if Labor won less votes overall than the Liberals in the March 20 state election – which they did, with the Greens holding the balance of power.

The ALP polled 37 per cent of the state’s vote to the Liberals’ 39 per cent in the state poll.

Mr Bartlett has repeatedly said that should the number of seats be tied, whichever party polled the most votes overall should be first allowed to try to form a minority government.

He did not reiterate that position on Wednesday and will make an announcement on Thursday.

But the Liberal leader on Wednesday said Labor would do or say anything to hang on to power, including going back on the Bartlett promise.

If they did, and Labor tried to continue in government, “then I would consider them to be an illegitimate government”, he told reporters in Hobart.

Mr Hodgman said he believed a no-confidence motion was a serious option and one he expected the Greens would be honour-bound to support.

“I think Tasmanians would consider it very poor form if the Bartlett government, or whoever leads Labor, tries to take office given that strong commitment made by Mr Bartlett on behalf of the Labor Party,” he said.

ALP would need Greens support

As the incumbent government, Labor has the democratic right to first try to govern in minority – but needs the support of the Greens to do so.

Mr Bartlett has refused to consider entering a deal with the Greens, citing his personal distrust of the party’s leader, Nick McKim.

Mr McKim says a deal is the only thing that will deliver stability.

Senior Labor figures are now wondering why they should give away the right to govern, and why not make a deal with Greens.

While Mr Hodgman reminded everyone of his dibs on becoming premier, Labor’s brains trust was meeting nearby.

The Labor Party has been thrashing out the merits of the Bartlett promise.

Party sources say the behind-closed-door talks could result in a change of leadership or the party may argue the governor had asked it to try to form a government, prompting it to abandon the Bartlett promise.

Five electorates in Tasmania each return five candidates under the 100-year-old Hare-Clark system of proportional representation for the 25-member assembly in which 13 MPs make a majority.

Greens eye posts as Bartlett sworn in

Tasmanian Premier David Bartlett and two ministers were sworn in on Tuesday afternoon, but he has told Governor Peter Underwood he won’t release his full cabinet until next week.

南宁桑拿

Mr Bartlett was last week commissioned by Mr Underwood to test his numbers in the state’s lower house, after the March 20 election delivered 10 seats to both the Liberals and Labor, with the Greens picking up the remaining five.

Greens keen on ministries

The ABC reported that Greens Leader Nick McKim announced his party would be keen on accepting ministries in a governing coalition.

“We’d certainly be prepared to accept ministries and that’s because we think it would be in the best interests of stable government and good governance for us to be involved as ministers,” he said.

Both the Greens and Labor were in lengthy party meetings on Monday, with Labor agreeing to be open to the idea of Greens ministers.

But it is still not clear whether Greens MPs will be included in the cabinet, as a formal power sharing arrangement has not been reached.

The Liberals have slammed Bartlett, accusing him of going back on promises to not do deals with the Greens.

Mr Bartlett on Tuesday confirmed he would be sworn in as premier, Michael Aird would be treasurer, while Lara Giddings would be deputy premier, attorney-general and minister for justice.

Labor looks outside of party

“The PLP (Parliamentary Labor Party) is of the view that we should consider – for the first time in Tasmania – Ministers outside the PLP,” Mr Bartlett said.

“I will be holding discussions to this end over the next week and I expect to be able to finalise the full Cabinet before the formal swearing in next week.”

A statement on the governor’s website said it was a constitutional requirement that a premier, treasurer and attorney-general be sworn in no later than seven days after the declaration of the polls – which happened last Wednesday.

“The premier has advised the governor that he will not be able to put forward a complete list of names for ministerial appointments until Wednesday 21 April,” the statement said.

“To ensure that the state is not without a caretaker government between the 14th and 21st April, this afternoon, the governor will swear into office Mr Bartlett as the premier, Ms Giddings as deputy premier, attorney-general and minister for justice and Mr Aird as treasurer.”

Giteau shouldn’t play halfback: Gregan

Former Wallabies captain George Gregan says he wouldn’t consider Matt Giteau as a back-up halfback, leaving the veteran midfielder in a fierce battle for a Rugby World Cup spot.

南宁桑拿

Australia’s most-capped Test player and halfback in the Wallabies’ 1999 World Cup final triumph, Gregan believes coach Michael Cheika needs to take Nick Phipps, Will Genia and Nic White as his three No.9s for this year’s global showpiece in Britain.

Such a scenario would leave Giteau jostling with the likes of Bernard Foley, Kurtley Beale, Quade Cooper, Matt Toomua, Christian Lealiifano and possibly utility James O’Connor for a playmaking role in Australia’s 31-man World Cup squad.

“Personally, I wouldn’t be looking at him as a halfback,” Gregan told AAP on Tuesday.

“He hasn’t played any halfback in his three years at Toulon. So the last time he played halfback was probably in 2007 when I was sitting on the bench.

“That’s a while between throwing passes in that position – and it’s a different position.

“You pick a player where he’s best going to improve the team and he’s a world-class No.12, fantastic at No.12, and he’s also a very good No.10.

“I just don’t think you need to play him at nine.”

If Cheika follows tradition and opts for three halves and three specialist hookers in his World Cup squad, that would leave 10 – or a maximum of 11 – more backline spots up for grabs.

At least five or six of those would be allocated to back-three players, meaning Giteau, Foley, Beale, Cooper, Toomua, Lealiifano and O’Connor couldn’t all be handed tickets to Britain.

But Gregan believes 32-year-old Giteau and his European Cup-winning teammate Drew Mitchell must be seriously considered.

“There’s so much rugby to be played, but right now it’s nice to know that you’ve got two guys who played in a team which has been European champions three years in a row,” Gregan said.

“They’re the biggest games in Europe so they know how to win and they know how to play in a high-pressure situation and they’ve got quite a high number of Test matches between the two of them as well.

“So you know you can back on that experience.”

If Cheika and assistant coaches Stephen Larkham and Nathan Grey decide to activate the ARU’s new policy of picking overseas-based players with 60-plus Test caps and seven years’ national service under their belt, Gregan would like to see Giteau and/or Mitchell have some involvement in the Rugby Championship.

“The season’s about to be finished in a couple of weeks in France and so they’d be available to do that,” he said.

“But then there’s also the whole refreshing and recharging and getting them right physically.

“That could be done in the camp if they chose to do that.

“Getting used to this Wallabies set-up is very, very important because it’s different to what they’ve been doing in their teams overseas.”

Macquarie boss says bank should behave

Macquarie Group chairman Kevin McCann has acknowledged his banking firm needs to do better in the wake of the financial advice scandal.

南宁桑拿

Victims of dodgy financial ideas lost millions of dollars in savings after consulting Macquarie’s private wealth division.

The Commonwealth Bank and National Australia Bank were also implicated in the financial planning drama.

A fortnight after banking executives and financial advice victims fronted a Senate inquiry Mr McCann, who chairs Macquarie Group and Macquarie Bank, said the shortcomings were being addressed.

“We recognise, along with management, that the companies need to do better,” he told an Australian Council of Superannuation Investors conference.

“We need to be seen to be behaving in a way that’s appropriate for our clients, and that we’re working for the benefit of our clients.”

Commonwealth Bank director Jane Hemstritch said corporate leaders needed to listen to their employees’ concerns.

“It is important to pay attention to what you’re being told,” she said.

“So that you can make your own judgment as to the state of the culture and whether anything needs to be addressed.”

But she defended the Commonwealth Bank’s handling of the issue, as evidence of wrongdoing emerged in stages.

“Had we known everything that we know now right from the get go, we might have handled things in a different way – but we didn’t,” she said.

ANZ chairman David Gonski said it was impossible for a bank boss to prevent irresponsible behaviour.

“If you say to me as chairman of a bank `it is my responsibility that no person will act improperly,’ you can’t do that,” he said.

Raiders’ coach makes Austin confident

Blake Austin believes the faith coach Ricky Stuart showed in making him Canberra’s chief playmaker is behind his rapid rise to State of Origin contention.

南宁桑拿

The 24-year-old’s name has been thrown in the NSW selection mix after he scored three tries and saved two in Sunday’s City-Country clash in Wagga Wagga.

His performance caught the eye of Blues great and City coach Brad Fittler, who declared him a potential match-winner and “in the frame” for a coveted halves jumper.

Austin, flattered by the comments, said he enjoyed his first taste of representative football and put his impressive form down to new found confidence as the Raiders’ go-to man.

Having been a utility at the Wests Tigers in seasons past, Austin said the added responsibility had only worked to better his game.

“For me, personally, I definitely need confidence to play well,” he said on Tuesday.

“From the moment I got here, I had confidence put in me.

“Sticky (Stuart) always told me that I was coming here to be a No.6 and that was always going to be good for me.

“I feel like I’m getting better every week.

“I’m only eight weeks in and I think I’ve got a lot of improvement to do.”

Austin said spending the week with Fittler had also helped, given his similar approach to coaching as Stuart.

“He’s not going to give you a 34-page playbook, but he’ll get you to the line ready for a game of footy,” he said.

“It’s something Sticky really prides himself on … and it’s something I got a lot out of last week.”

While he said he’d love to play Origin some day, his focus right now was to maintain the Raiders’ NRL form.

The club has won its past two matches, against the Tigers and South Sydney, but face in-form Gold Coast at GIO Stadium on Saturday.

Prop Paul Vaughan said the team is still riding high from those victories, and the performances of Austin, Jarrod Croker, Jack Wighton and himself in the City-Country match.

“All the boys are really pumped and training pretty hard,” he said.

“We want three wins in a row and we’re pretty keen on getting that.”

Analysis – Fancy fast food shares surge in U.S. as Shake Shack draws shorts

Half a dozen food chains have held piping-hot stock market debuts in the past year to meet a growing appetite for “fast-casual” restaurants catering to younger and more affluent diners willing to pay more for fresher, higher quality fare than they expect to find at traditional fast food places like McDonald’s.

南宁桑拿

Wall Street hopes the new crop of publicly traded eateries will replicate the success of Chipotle Mexican Grill Inc, which has grown to about 1,800 restaurants since its 2006 debut. With consumer spending showing signs of improvement and more diners keen on antibiotic-free meats and other healthy foods, now is a great time for restaurants in that niche, especially ones adept at building grass-roots buzz and loyalty, experts said.

But investors have pushed the shares of some of those restaurants – Shake Shack Inc, Zoe’s Kitchen Inc and Habit Restaurants Inc – to sky-high levels that imply growth expectations that may prove hard for the management to deliver.

Shake Shack – the big outperformer – is up 260 percent since it went public at the end of January. As a group, shares of established restaurant companies have outperformed the broader stock market exponentially, with the Dow Jones U.S. Restaurants & Bars Index (which doesn’t include these newcomers) rising 11 percent this year, compared with the Standard & Poor’s 2 percent increase.

Based on the number of locations open at the end of 2014, Shake Shack’s current stock price values its restaurants at $40 million each, four times the stock market value of a Chipotle restaurant and 15 times the value investors assign to a McDonald’s Corp restaurant.

Brad Lamensdorf, who co-manages the AdvisorShares Ranger Equity Bear ETF, said he would short Shake Shack’s shares, except that his broker has none left after lending his last at a staggering 65 percent annual interest rate. At that rate, short sellers would have to pay out more than 5 percent of their investment every month while waiting for Shake Shack’s stock to fall, which may not happen.

“Just because a stock looks expensive doesn’t make it a great short. It’s way too expensive to borrow,” Lamensdorf said, adding it might become more feasible in July after insiders restricted following Shake Shack’s January IPO are allowed to sell their shares. Almost 40 percent of Shake Shack’s shares are currently short-sold.

Lamensdorf is also shorting Chipotle, betting that the company’s expansion is about to lose steam. Chipotle is down 7 percent so far in 2015. Another fast-casual chain, Buffalo Wild Wings, is down 13 percent, with investors concerned about slowing growth momentum at both chains.

And some may already have lost their luster: Shares of Chicago-based sandwich chain Potbelly Corp more than doubled in their first trading session after its IPO in 2013. But since then, the company’s growth has failed to impress investors and its stock sells now for about a dollar more than the $14 a share it fetched when it first went public.

More fast-casual restaurant IPOs are in the works. Nashville, Tennessee-based J. Alexander’s Holdings Inc and Fogo de Chao, a steakhouse chain offering 20 cuts of meat in Brazilian-style tableside barbecue service, have both filed with U.S. regulators for IPOs.

Habit, which opened in 1969 and is known in California for its charburgers, is up 120 percent since its November IPO. Zoe’s Kitchen, which serves Mediterranean cuisine with Southern hospitality, has doubled since its IPO in April 2014.

High prices for the newly listed stocks reflect a scarcity of high-growth restaurants to invest in as well as Wall Street’s confidence in companies’ management teams, said Piper Jaffray analyst Nicole Miller Regan, who has “overweight” ratings on Zoe’s and Habit and does not cover Shake Shack.

“Look at Chipotle. It’s not a burrito company, it’s an ATM,” Miller Regan said. “I don’t care what cuisine you put through there – it’s a phenomenal return.”

Shake Shack’s PEG ratio (price/earnings over its expected next year’s growth – a measure of a stock’s value that accounts for expected profit growth), is 156 compared to 1.6 for Chipotle. Lower PEGs suggest cheaper stocks. Zoe’s PEG is 2.5 and Habit stands at 4.6. By comparison, Internet giant Twitter Inc has a PEG of just 0.8, suggesting it is well priced for its expected growth.

Habit, Zoe’s and Shake Shack declined to comment on their stock valuations.

  

ENLIGHTENED HOSPITALITY

To justify its recent stock price, Shake Shack would need to establish more than 400 company-run or franchised restaurants within about five years, estimated Georgetown University business professor James Angel.

With a new location in Austin, Texas, Shake Shack now has 68 restaurants in the United States and other countries; it has said it plans to open at least 10 domestic locations annually and expand abroad.

Shake Shack, which says its key to success is a culture of “enlightened hospitality,” is a master of word-of-mouth marketing. It has more than 1,800 Instagram followers for every $1 million spent across its locations, compared with 11 for McDonald’s Corp and 60 for Taco Bell, a fact that Goldman Sachs has cited as helping build loyalty among millennials.

Habit on Thursday posted March-quarter revenue above expectations but its full-year revenue outlook was shy of consensus, according to Thomson Reuters I/B/E/S.

Shake Shack posts its quarterly results on May 13.

“Do they have a unique value proposition with their customers? Yes. Is it hard to replicate? Yes,” said Bob Goldin, Executive Vice President of food services consultancy Technomic. “But is it impossible? Absolutely not.”

(Reporting by Noel Randewich; editing by Linda Stern and John Pickering)

Clark, Stanley may return for Cats in AFL

Mindful of his luckless run with injury dating back a number of years, Geelong are determined to take no risks with Mitch Clark.

南宁桑拿

But coach Chris Scott remains hopeful that Clark and fellow athletic tall Rhys Stanley will push for recalls in Friday night’s big MCG clash with Collingwood.

The Cats will need to make at least one forced change, with triple premiership star James Kelly to miss at least a month after rupturing a testicle against Richmond on Saturday.

Clark (foot soreness) and Stanley (hamstring tightness) both missed the narrow nine-point win over the Tigers.

Clark quit Melbourne and the AFL early last year due to clinical depression and a run of serious injuries, most notably to his right foot, which cruelled much of his 2012 and 2013 campaigns.

When he changed his mind about retirement, the 27-year Clark was snapped up by the Cats in the trade period in October.

The good news this time was that Clark experienced discomfort in his left foot, rather than the right one where he had suffered a Lisfranc joint injury during his time with the Demons.

Scott said Clark – who has been limited to just 101 senior games in more than nine seasons – probably felt he could have played against Richmond, only to be ruled out by the medical staff.

“We want Mitch to be a long-term player for us, not one who just comes in and papers over cracks in the short term,” Scott said on Tuesday.

“Hopefully that decision-making means he’s a better chance to play well this week and if he doesn’t quite come up this week then he plays well the next week.

“We were really clear with Mitch when he came in that our priority was for him to come and be a long-term player for us.

“We were well aware of the problems he had had with his body in the past.”

Kelly will miss at least a month recovering from the ruptured testicle.

Geelong suffered two other serious injuries to experienced players in the VFL last weekend.

Injury-plagued former North Melbourne ruckman Hamish McIntosh faces up to two months on the sidelines after tearing a calf tendon, while utility Billie Smedts will be out of action for a similar period with a broken collarbone.

Lee ranking slip gives Malaysia selection headache

The Malaysians have two spots at the Aug.

南宁桑拿

10-16 tournament but former world number one and twice Olympic silver medallist Lee is only their third-ranked player after serving a backdated eight-month ban which expired on Friday.

World number 31 Chong Wei Feng and 41st-ranked Zulfadli Zulkiffli are in line to take the two spots but talk has already begun about 45th-ranked Lee going at the expense of one of his compatriots.

“We need to take players with medal-winning prospects and if that comes into play, (Lee) Chong Wei will be a sure choice but it is up to BAM to chose Wei Feng or Zulfadli,” national singles coach Tey Seu Bock told local media on Monday.

Seu Bock previously coached Lee but now looks after Chong, who has also slumped after reaching a career high of 12th in 2013.

Promising 21-year-old Zulfadli, who won a number of junior titles, is currently at his career best ranking.

Seu Bock unsurprisingly believed his man deserved the opportunity to compete in Indonesia.

“Wei Feng is under my charge and he is ranked higher, so he shouldn’t give up his spot. He’s been working very hard and has shown a very positive attitude,” he said.

Badminton Association Malaysia (BAM) technical director Morten Frost said the decision over which two players to send would be resolved soon.

“Right now, there is no decision regarding our two representatives. There is still time for us decide and it will probably be done some time next week,” he said.

Malaysian media were hopeful that the Badminton World Federation, who handed Lee the ban last month, would consider giving the 32-year-old a wildcard to compete in Jakarta.

However, it was at last year’s world championships that Lee tested positive for dexamethasone, an anti-inflammatory that does not enhance performance but is on the list of banned substances.

Lee was staying clear of the discussion and just going through final preparations for his tournament return at the team Sudirman Cup in China starting on Sunday.

“The tournament is only days away but I am itching for action and very excited,” he said. “The feeling this time around is different since I have not stayed away from competition for such a long time.”

(Writing by Patrick Johnston in Singapore; Editing by John O’Brien)

Iron ore, coal prices drive trade deficit

Australia recorded a bigger than expected trade deficit in March, largely due to sagging prices for iron ore and coal exports.

南宁桑拿

In seasonally adjusted terms, the balance on goods and services was a deficit of $1.32 billion in March, following a revised deficit in February of $1.61 billion.

The deficit was larger than the $1.0 billion economists had predicted for March.

Exports fell two per cent, while imports were also down two per cent, according to official data out Tuesday.

CBA senior economist John Peters said falling commodity prices were behind the wider than forecast deficit.

“While export volumes of coal and iron ore continue to increase, their price continued to fall over March and that was a key driver of the bigger deficit,” Mr Peters told AAP.

“We’ve seen in 12 months falling commodity prices being a drag on the trade balance, not quite offset by the increase in volumes.”

He said while there were no surprises in the trade data, the larger deficit could put a dent in net export component of first quarter gross domestic product data.

JP Morgan economist Tom Kennedy also pointed to weaker coal and iron ore prices for the larger-than-tipped deficit, but cautioned that the data was volatile.

“Around January, February and March of each year due to the shifting timing of Chinese New Year, obviously we get some trade distortions and trade disruptions that aren’t fully captured in the seasonally adjusted process,” Mr Kennedy said.

He said he was surprised imports of goods and services fell $702 million for the month.

“The surprise for us, and I suspect for the market too, is on the import side,” he said.

Port ruck Ryder finally finds peace

Finally at peace with the Essendon supplements scandal, Port Adelaide’s prized recruit Paddy Ryder feels ready to make a lasting impression on his new AFL club.

南宁桑拿

Ryder was one of 34 players on Essendon’s 2012 list who were cleared by the AFL’s anti-doping tribunal of wrongdoing.

The ruckman left the Bombers because of the controversy and says he’s gradually building momentum in his first season at Port Adelaide.

“Coming here is making my peace with it,” Ryder told reporters at Port’s Alberton base on Tuesday.

“I’m very happy here and just look forward to playing footy now.

“It (the tribunal verdict) has been good for everyone involved and we can just get on with our footy now and not worry about any of the annoying stuff.”

Ryder, prevented from playing any pre-season games while awaiting the March verdict of the anti-doping tribunal, says his form has been building in the premiership season.

“I feel like I can have a lot more impact on the games,” he said.

“I was a bit nervous to start but as you start playing games with the boys … you start fitting in.

“It has been pretty easy to fit in. As long as you do the hard work and really get amongst the boys, they really welcome you.”

Ryder is forming an enviable ruck combination with Port’s leading tap-man Matthew Lobbe but said the duo faced a stiff challenge this Sunday against West Coast’s Nic Naitanui.

“When he’s up and about, which he is at the moment, he’s pretty hard to stop,” Ryder said of the key Eagle.

“Everyone has their weaknesses though so we’ll try and find what that is in Nic Nat and really attack him.

“If he is able to jump at everything that he likes, then he’s going to step on everyone’s heads. So we have got to be smart about what we do and just really attack him in a fair way.”

SA goes from fires to winter in 24 hours

From bushfires and rising temperatures to gale force winds, blackouts and rain – Adelaide and parts of South Australia have copped the lot in less than 24 hours.

南宁桑拿

A blast of wild weather swept across the state early on Tuesday cutting power to more than 16,000 properties and bringing trees down across the Adelaide hills and suburbs.

The conditions were in contrast to those on Monday when five bushfires were sparked across SA, fanned by warm northerly winds and temperatures in the high 20s.

As the storm moved across SA on Tuesday a 70-year-old man was taken to hospital after a tree fell on his car south of Adelaide, while a woman at suburban Ridgehaven had a lucky escape when a falling tree demolished part of her home.

The State Emergency Service (SES) said it had taken more than 200 calls for help since 4am when the worst of the weather hit.

Deputy chief officer Dermot Barry said the level of calls was consistent with the strength of the storm and the SES expected its backlog to be cleared by Tuesday evening.

“We think for the CBD and the Adelaide metropolitan area the worst of it has passed,” he said.

“That will give our crews a chance to get through this backlog and get some rest.”

By mid-afternoon the number of properties without power had also been cut to about 1000.

Mt Crawford, in the Adelaide Hills, recorded the strongest winds on Tuesday with 135km/h while Neptune Island had gusts of 109km/h and Minlaton more than 100km/h.

There was rain in many districts though falls were not significant.

The Country Fire Service said it had responded to more than 20 incidents of falling trees, mostly across the Adelaide Hills.

But it said Tuesday’s bushfires, in the mid-north, on Kangaroo Island and in the Adelaide Hills, were either out or contained.

ANZ impresses with $3.7b profit

ANZ made a better-than-expected $3.

南宁桑拿

7 billion half year profit, but chief executive Mike Smith has warned the subdued economic outlook could hamper the bank’s ability to grow from here.

The first half cash profit result was up five per cent compared to the same period a year ago, beating the four per cent growth analysts had expected.

The bank also kept investors happy by increasing its interim dividend three cents to 86 cents.

Mr Smith warned the outlook for the economy could make it harder for ANZ to grow earnings in the short term, though he remained confident in the longer term performance of the bank’s Australian and Asian operations.

“For the foreseeable future, we will be operating in a lower growth environment in which there will continue to be occasional volatility and shocks,” he said.

“Australia has its own challenges to the economic outlook, which stem from the ageing population, out fiscal position, low productivity growth.

“But on the bright side we are benefiting from Asia’s growth, so overall I’m very positive about Australia and New Zealand.”

He said ANZ would continue to invest in both its Australian and Asian operations and was willing to accept a short-term increase in costs as it looks to boost future returns.

“We are managing expenses carefully, however we have been prepared to accept a slightly higher run rate on costs in the short term where investment can deliver sustainable growth and returns.”

ANZ recorded lending growth of 10 per cent during the half, which helped increase profit from its Australian retail division eight per cent.

Meanwhile, ANZ’s International and Institutional Banking business lifted its profit seven per cent after a strong performance from its much-talked about Asian operations offset a weakness in its home market.

“The weakness, if there was one, was in the institutional business in Australia, where we’ve had very significant margin compression … had we not had the Asian business we would have been in serious trouble,” Mr Smith said.

ANZ’s net interest margin, the profit it makes on loans, dropped 11 basis points during the half to 2.04 per cent due to tough competition among lenders.

Mr Smith said the bank was also looking at ways to increase capital reserves, including through its dividend reinvestment plan or by selling off non-core businesses, as it prepares for a possible move on reserve requirements from the Australian Prudential Regulatory Authority.

“There is no doubt that there will be a growing need for more capital, the regulatory environment is such that more capital is a given, the question is how much and by when.”

ANZ shares gained 88 cents, or 2.65 per cent to $34.12, while its fellow big four banks finished the day in the red following the Reserve Bank’s interest rate cut.

The bank’s performance outshone that of rival Westpac, which on Monday recorded a flat $3.78 billion half year profit, $100 million below analysts’ expectations.

ANZ’S SOLID HALF

* Cash profit of $3.7b, up 5pct from $3.5b in 2013/14

* Net profit of $3.5b, up 3pct from $3.4b

* Interim dividend of 86 cents, up from 83 cents