ANZ Bank’s share price rose 4 percent on Friday. The rally came after CEO Mike Smith unveiled a 16 per cent surge in the company’s underlying earnings for the first quarter of the 2010 financial year.

CLSA banking analyist Brian Johnson said “it was a cracker” of the result. He said it “mirrors the improving trend in the sector that was evidentin the Westpac and Commonwealth Bank profits announced earlier this month.”

ANZ scrip outperformed the rest of the banking sector, climbing to $23.14 (up 89 cents).

Mr Smith said the Australian economy was recovering much faster from the global slowdown than anticipated but refused to comment on whether the bank would proceed with intentions to cut total dividends in 2010 by 25 per cent, saying only that it would be dealt with at the half year result.

The growth in the first four months was underpinned mainly by a 35 per cent fall in provisioning charges which came in at $674 million.

Mr Smith noted that growth in impaired loans slowed during the period, but warned taht provisioning charges for the full year were expected to be modestly higher than the trend implied in the early part of the year.