As per the media report, Australia and New Zealand Banking Group Limited (ASX: ANZ) has warned regulators that 7.25% buffer consideration by the banks may turn the potential lenders’ sentiment downside. The reason is attributed to the low wage hikes by the corporates, which resulted in a little to no interest in the property markets by the buyers. Another factor has been the tightening of lending standards following Royal Commission recommendations and higher inflation. Many families have failed in honouring their regular mortgage payments on time, which has started to reflect on the balance sheets of the banks. The Consumer Price Index was up by 1.3% in March 2019 as compared to March 2018 according to Australian Bureau of Statistics. The Wage Price Index increased by 2.3% in December 2018 as compared to December 2017.
Many experts believe that reducing the loan servicing requirements may provide an alternative to the cash rate cut by the RBA, in order to stimulate borrowers interest in the housing market. The weaker inflation last week indicates the expectation for interest rate cut by the Apex Bank in May. Lowering the interest rate would help to boost the sluggish property market.
In another update, ANZ published its H1 FY19 results, where it reported an increase in cash profit by 2% to $3.56 billion. Its return on equity was reported at 12%. Its CET1 capital ratio increased by 45 basis points to 11.5%. The group reported a fully franked interim dividend of 80 cps and its cash earnings per share increased by 5% to 124.8 cps.
ANZ Bank (Australia) posted a decrease in cash profit of 12% to $1.8 billion and reported customer deposits of $203.4 billion. Its expenses decreased by 2% to $1.8 billion, along with the decrease in customer lending of 1% to $336.6 billion. The bank’s revenue decreased by 6% to $4.8 billion.
ANZ Bank (NZ) reported a statutory net profit after taxation (NPAT) of NZ$929 million for the six months to 31 March 2019, down by 4% on the corresponding half in 2018 financial year. Its cash NPAT increased by 18% to NZ$1,114 million, due to one-off transactions, which included the sale of life insurance company OnePath Life (NZ) Limited and a 25% share in Paymark Limited.
ANZ Bank (Institution division) reported an increase in cash profit of 33% to $1 billion. Its risk-adjusted margin increased by 19 bps to 2.36%, along with a decrease of 4% to $1.3 billion in expenses. The bank’s revenue increased by 8% to $2.7 billion.
At the time of writing (on 2nd May 2019, AEST 3:54 PM), the stock of ANZ was trading at A$27.230, down 2.576%, with a market capitalisation of ~A$79.19 billion. Its current PE multiple is at 12.610x, and its last EPS was noted at A$2.216. Its annual dividend yield has been noted at 5.72%. Today, it touched day’s high at A$27.570 and day’s low at A$27.150, with a daily volume of 3,969,430. Its 52 weeks high price stands at A$30.390 and 52 weeks low price at A$22.980, with an average volume of 5,635,046. Its absolute returns for the past one year, six months and three months are 1.34%, 6.00%, and 6.75%, respectively.
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