All the financial entities, including the Commonwealth Bank, Westpac, ANZ and NAB, which are Australia's biggest business lender, have cut commercial lending rates so that small businesses do not collapse due to fast spread of coronavirus. The banks have decided that they will offer repayment relief of aggregate $100 billion, which is projected to stem up the economy due to increase in unemployment. Further, 11 lenders have decided to provide coordinated relief to the employers by offering them a six-month holiday on their mortgage repayments, according to the Australian Banking Association. Smaller financial lenders, like AMP Bank, Bank Australia, Bendigo and Adelaide Bank Limited, Bank of Queensland, Macquarie Bank, HSBC, and Suncorp are also offering six-month holidays for repayment to small business employers that have taken total debt less than $3 million. Meanwhile, $90 billion is to be given by the RBA (Reserve Bank of Australia) to the banks so as loans can be offered at a cheap rates to small and medium-sized businesses.
Additionally, the federal government has delayed the budget by five months and will now be taken on October 6 as per the announcement by Treasurer Josh Frydenberg. The budget generally is announced in May each year.
Commonwealth Bank of Australia (ASX:CBA)
Commonwealth Bank of Australia is Australia’s leading bank, that also operates across Asia, New Zealand, the United Kingdom and the United States. The bank is provider of wide range of financial services for all types of businesses, comprising of retail banking, institutional banking, funds management, investment, broking services etc.
CBA stock fell by 1.71% on March 20th, 2020 after the company raised AUD 280 million ($166.24 million) through the issue of 3.00 percent subordinated notes. These subordinated notes will be due in 2035 and are issued according to the bank’s U.S.$70,000,000,000 Medium Term Note Programme.
The Company declared of AUD 2 per share fully franked having a record date of February 20th, 2020 and the payment date as March 31st, 2020.
Meanwhile CBA stock has fallen 26.26% in last three months as on March 20th, 2020 and is trading at a P/E of 10.46x. The company has dividend yield of 7.19%.
Australia and New Zealand Banking Group (ASX: ANZ)
Australia and New Zealand Banking Group is among the top four banks in Australia that offers all financial services in its portfolio. ANZ stock rose 6.80% on March 20th, 2020 after the bank announced support package of worth AUD 6 billion for small business and home loan lenders to tide over COVID-19 crisis. The package updates about the cut in some fixed rates by 0.80% pa on new loans taken for small business and cut of 0.49% pa to home loan borrowers. The bank has also slashed variable small business rates by 0.25%pa and variable home loan rates by 0.15%pa.
In middle of such uncertainty, the Company declared a distribution of AUD 1.5382 per share 70% franked having a record date of August 24, 2020 and payment date of September 1, 2020.
Meanwhile ANZ stock has fallen 35.40% in three months as on March 20th, 2020 and is trading at a low P/E of 7.63x. The company has high dividend yield of 9.99%, has paid 80 cents on December 18, 2019.
WAM Capital Limited (ASX: WAM)
Average return per annum of 16.3% since inception:
WAM Capital Limited, is one of the leading listed investment companies (LICs) that is operated by Wilson Asset Management. WAM invests in undervalued stocks that have the potential to grow in Australian market. WAM stock rose 0.56% on March 20th, 2020 after the company gave solid performance since its inception in August 1999 and gave an average return per annum of 16.3% during the period from its portfolio before fees, expenses and taxes.
WAM released investment details till February 2020: Company has gross assets of $1,284.8 million and posted net tangible assets before tax of $176.68 cents for February 2020 compared to $193.01 cents for January 2020. The Company during this period has the three largest holding - 24.6% in Financials, 17.8% in Consumer Discretionary, & 9.6% of industrials. Additionally, the market experienced sell-off in late February. Despite it, the FY 20 interim results of the companies in which WAM had invested has performed better than projected.
Meanwhile WAM stock has fallen 24.47% (source:ASX) in one month as on March 20th, 2020 and is trading at a low P/E of 7.09x. The company has good dividend yield of 8.66%, will pay 7.75 cents on April 28th, 2020.
Top 20 holdings (in alphabetical order) (source: Company Reports)
The Company has paid 238.50 cents per share in dividend since its inspection whereas it declared to distribute 7.75 cents recently, fully franked having an ex-date of April 20th, 2020 and payment date as April 28th, 2020.
National Australia Bank Ltd. (ASX: NAB)
Announced more than $10 billion support package:
National Australia Bank Ltd. is one of the largest banks of Australia for businesses that has operations in other countries like New Zealand, Europe, Asia and the United States. The bank offers various banking services, credit card facilities, leasing, loans for housing and general, international and investment banking, wealth management, funds management, life insurance etc.
NAB stock rose 7.48% on March 20th, 2020 after the bank announced more than $10 billion support package for business and personal customers that will be provided over the period of six months, which means package of $380 million a week. This will comprise of cut of 200 bps on new loans rate, cut of variable rates on small business loans, cut up to 60 bps on fixed rate home loans etc.
The Company declared $0.7005 per share unfranked dividend for the quarter holding a payment date as June 21st, 2020 and record date as June 12th, 2020.
Meanwhile NAB stock has fallen 42.85% in one month as on March 23rd, 2020 and is trading at a low P/E of 9.29x. The company has high dividend yield of 10.6%, has paid 83 cents on December 12, 2019.
Westpac Banking Corp (ASX: WBC)
Announced a $10 billion support package:
Westpac Banking Corp, one of the biggest banks that also operates in New Zealand apart from Australia. WBC stock rose 8.53% on March 20th, 2020 after the bank announced a $10 billion support package to home lending, savings and small business customers through the reduction of loan rates & increase in the deposit rates.
The Company declared a fully franked interim dividend of $1.6 per share as on 20 March 2020. The distribution has a record date as March 25th 2020 and payment date around April 17th, 2020.
Meanwhile WBC stock has fallen 34.97% in three months and is trading at a P/E of 8.03x. The company has high dividend yield of 11.03%, has paid 80 cents on December 20, 2019.