ANZ chief executive Shayne Elliott says the lender is watching its mortgage book "like a hawk" for signs of stress as households rack up record debt to meet rising house prices.
The bank on Thursday posted an 18 per cent rise in annual profit to $6.94 billion after a year in which it and its rivals hiked interest-only mortgage rates in response to regulatory intervention to limit risky lending.
The quality of ANZ's assets looks to be in good shape after the lender said its credit impairment charge fell 39 per cent in the 12 months to September 30 to $1.199 billion but Mr Elliott said the bank would not be complacent over its mortgage book.
"It's a big exposure for any bank so we watch it like a hawk," Mr Elliott said.
"It's something we look at the data literally on a daily basis to try and understand - you know, it's in our interest to make sure that our customers borrow responsibly."
Concerned by a build-up of risk in the housing market, the Australian Prudential Regulation Authority in March told major lenders to limit interest-only loans to 30 per cent of new mortgages.
That came on top of an annual 10 per cent growth limit in lending to investors.
Mr Elliott acknowledged that levels of household debt in Australia and New Zealand were high by international standards.
"There's some good reasons why that's okay but we don't want to be complacent about it," Mr Elliott said.
"I think we get paid to be cautious and to be prudent."
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