Fitch ratings: What’s latest with ANZ (ASX:ANZ) and ANZNZ

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Summary

  • Fitch Ratings revised the rating on long-term issuer Default Rating (IDR) for ANZ and its wholly owned New Zealand subsidiary ANZ Bank New Zealand Ltd (ANZNZ) to stable from negative.
  • The rating agency has affirmed long term IDR at A+ for ANZ and ANZNZ.
  • Fitch attributed improvement in the economy along with increased uncertainty in revising its ratings for ANZ.

Fitch Ratings revised the rating on long-term issuer Default Rating (IDR) for ANZ (ASX:ANZ) and its wholly owned New Zealand subsidiary ANZ Bank New Zealand Ltd (ANZNZ) to stable from negative. The credit ratings agency has affirmed long term IDR at A+ for ANZ and ANZNZ.

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In addition, the ratings on long-term and short-term senior debt issued by both entities and ANZ’s subordinated debt and hybrid Tier 1 capital instruments has been affirmed by the rating agency.

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What Fitch says

Fitch attributed improvement in the economy along with increased uncertainty in revising its ratings for ANZ. The rating agency said that better economic prospects provided its confidence that ANZ's financial profile would remain consistent with its current ratings over the next two years.

Australia's good handling of the health aspects of the coronavirus pandemic had allowed the economy to rebound strongly and Australia’s GDP may expand by 4.7 per cent this year, it noted.

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Fitch observed some downside too until the vaccination programme was completed. However, the same had reduced significantly since early 2020. Fitch regarded ANZNZ as a key and integral part of ANZ, offering products and services to clients in a market the group considers to be core.

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Stock performance

On 12 April 2021, the shares of ANZ closed at A$28.87, up 0.13 points or 0.45 per cent, compared to the previous closing on 9 April 2021. The stock gave a return of 25.03 per cent so far this year.

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Meanwhile, Fitch also raised its rating on other three major big Australian banks to stable from negative on A+ long-term IDRs. These three other major Australian banks have also performed well so far this year. While Westpac Banking Corporation (ASX:WBC) surged by 0.35 per cent,  National Australia Bank (ASX:NAB) rose by 17 per cent so far this year. Commonwealth Bank of Australia (ASX:CBA) was up by 3.54 per cent in the given period.

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