Australia And New Zealand Banking Group Limited (ASX: ANZ) has reported a cash profit for its continuing operations of $3.56 billion for the first half of FY19 (1H FY19), up 2% on the previous corresponding period (pcp). Further, the company also reported a statutory profit after tax of 3.17 billion for 1H FY19, down 5% on pcp.
ANZ’s shares were trading up by 3.272% during the intraday trade as on 1 May 2019 (AEST 1:49 PM).
ANZ is having Common Equity Tier 1 Capital Ratio (CET1) of 11.5%, up 45 basis points (bps), mainly driven by cash profit generation, net reduction in underlying RWA growth and benefits from asset sales. Partially offsetting these were the impact from payment of the 2018 final dividend and on-market share buyback during the half.
The Board has declared an interim dividend of 80 cents per share, fully franked which will be paid on 1 July 2019.
During the half year period, the group introduced single home loan origination system for all channels in Australia and increased the number of dedicated home loan assessors in Australia to assist with enhanced verification.
During the period, the group retained its number 1 position for overall relationship quality in Asia for the second consecutive year and maintained its digital wallet leadership with more than 88 million transactions in the last 12 months, with total customer spend up 114% in that same period.
The total provision charge for the half was $393 million and the Group Loss rate was 13bps. During the half year period, the new impaired assets declined to $890 million, down by 8% on pcp.
During the half year period, the group completed a $3 billion buy-back which resulted in a 3.7% reduction in shares.
ANZ Bank New Zealand has reported a statutory net profit after taxation (NPAT) of NZ$929 million and Cash NPAT of NZ$1,114 million. The statutory net profit was down by 4% on pcp, however, its Cash profit was up by 18% at NZ$1,114 million including the impact of one-off items.
While Commenting on the outlook, ANZ Chief Executive Officer Shayne Elliott told that Retail banking in Australia is going to remain under pressure for the foreseeable future. The retail banking will witness subdued credit growth, intense competition and increased compliance costs impacting earnings.
ANZ’s Institutional banking has reported positive performance, Mr. Elliott believes that this business will provide positive earnings diversification, which is going to partially offset the headwinds that the group is facing in its other parts.
At the time of writing, i.e., on 1 May 2019 AEST 1:49 PM, the stock of the company was trading at a price of A$28.090, up 3.272% during the day’s trade with a market capitalisation of ~A$77.06 Bn. The stock is trading at a PE multiple of 12.270 and it has a dividend yield of 5.88%. In the past six months, the stock price has increased by 6%.
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