ANZ has announced a record full year profit of $7.3 billion, up 15 per cent on a year ago.

The bank’s preferred measure, the cash profit, is in line with analysts’ expectations, rising 10 per cent to $7.1 billion.

ANZ’s profit was boosted by a reduction in its cost-to-income ratio, but also by a 17 per cent cut to its provisions for bad and doubtful debts to $989 million.

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The bank says its profit before the reduction in provisions was up a more modest 7 per cent.

The result comes after rival NAB recorded a decline its full year profit yesterday.

ANZ says income from its operations outside Australia and New Zealand now account for almost a quarter of its profits.

That was borne out by its geographical breakdown of cash profit, which showed 20 per cent growth in earnings in Asia-Pacific, Europe and America, while New Zealand grew 31 per cent over the year.

Meanwhile, the annual profit growth in Australia was just 1 per cent.

However, those fortunes were reversed in the second half of the financial year, where Australian earnings grew strongly, but ANZ’s overseas operations went backwards compared with the first half.

“This provides ANZ with meaningful and differentiated growth options without the need to take on more risk,” noted ANZ chief executive Mike Smith in the report.

“With the phase of high investment in Asia largely complete, we are seeing a greater share of Asia-led revenue growth translate to profit.”

However, Mr Smith is still focused on the company’s core Australian operations, which still generate well over half its profit.

In particular, the bank boss is concerned about the prospect for increased regulation as a result of David Murray’s Financial System Inquiry.

“It is perhaps not widely understood that Australia’s financial system has been strengthened significantly since the GFC and our major banks are now stronger and safer than ever,” Mr Smith asserted.

“While everyone benefits from a well-capitalised, well managed banking system – consumers, shareholders and taxpayers – there is a real cost to the economy of ever more restrictive regulation and policy settings.”

The bank noted that it is currently funding its new loans from deposits, with savings balances up 9.5 per cent while net loans were up 8 per cent.

ANZ is paying a final dividend of 95 cents per share, up from an 83 cent interim dividend, taking the full-year payout to shareholders to $1.78, up 9 per cent on last year.