(Reuters) -Australia and New Zealand Banking Group Ltd on Thursday reported a 5% rise in annual cash profit that surpassed market expectations, as its home loans business improved and higher interest rates boosted margins in the second half.

ANZ said its home loan application times were back in line with industry peers, following an overhaul to address processing delays that had kept the lender from cashing in on a COVID-driven housing boom.

“There is uncertainty ahead, however we have the business in good shape to withstand volatility,” Chief Executive Shayne Elliott said in a statement.

The lender also plans to introduce a fully automated digital home loan, Elliott added.

ANZ’s group net interest margin, a key measure of profitability, grew 10 basis points from the first half to 1.68% in the second half of the year.

Runaway inflation has pushed the Australian central bank to pursue its most aggressive tightening cycle in decades, boosting margins for banks that had grappled with record-low interest rates for the past two years.

Cash profit from continuing operations was A$6.52 billion ($4.23 billion) for the financial year, beating a Visible Alpha consensus estimate of A$6.31 billion.

The bank proposed a final dividend of 74 Australian cents per share, compared with last year’s 72 Australian cents.

($1 = 1.5408 Australian dollars)

(Reporting by Harshita Swaminathan and Sameer Manekar in Bengaluru; Editing by Devika Syamnath)