The ANZ Banking Group will have less believable reason not to pass in full any future overnight cash rate cuts to be made by the Reserve Bank of Australia (RBA) since it reported on Thursday another record-breaking profit.

ANZ posted $5.66 billion full year profit for the year to Sept 30, up 6 per cent from $5.36 billion in the previous year. The bank's cash profit also grew 6 per cent to $6.01 billion from $5.65 billion.

The bulk of the bank's underlying profit growth came from its Australian, New Zealand and international divisions, with revenue from Asia operations now comprising 21 per cent of total revenue.

The bank has been criticised by borrowers for failing to pass in full to customers key lending rate cuts made by the RBA despite logging record-breaking profits. For the October 2012 rate reduction made by the Australian central bank, ANZ pocketed 5 basis points of the 25 basis points rate cut and passed on to borrowers only 20 basis points.

It is not just ANZ, but also Westpac, the Commonwealth Bank of Australia and National Australia Bank - collectively known as the big four - which have been pocketing part of the RBA rate cuts in spite of profitable operations. The big four are expected to register a combined profit of over $25 billion for 2011/12, which would be a third consecutive year of record profits.

However, the banks are expected to cite as justification for retaining some of the RBA rate cuts to slower profit growth which has sunken to a three-year low because of weak loan demand and rising bad debts. ANZ's net interest margin, a key measure of profitability, declined 11 basis points to 2.31 per cent while its return on equity went down 60 basis points to 15.6 per cent.

The banks would also likely point to the weakening global growth prospect as another justification for their action, which ANZ Chief Executive Mike Smith just did.

"With the global economy softening, it's clear that the post-GFC, lower growth business environment will be with us for the foreseeable future, as will the requirement to operate with higher levels of regulatory capital and higher funding and liquidity costs," Mr Smith said in a statement.

"Although the operating environment in 2013 looks more challenging with stronger headwinds in a number of areas, our unique growth strategy and the momentum we have in adapting to the new environment means we are well placed to deliver value and performance to shareholders in 2013," he added.

As a result of the record profit, ANZ declared a final dividend of 79 cents per share which is 4 per cent higher compared to last year's dividend.

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