WBC, ANZ: Banking stocks grab attention as rate hike talks intensify

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WBC, ANZ: Banking stocks grab attention as rate hike talks intensify

 WBC, ANZ: Banking stocks grab attention as rate hike talks intensify
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Highlights

  • Westpac economists are predicting the forecast OCR peak of 3.5% by the end of 2021.
  • Westpac released its 4th and 5th independent reviewer reports on 17 May.
  • ANZ will pay an interim dividend of 72cps on 1 July 2022 with attached imputation credits of 9cps.

NZ is facing increased inflation amid accommodative monetary policy measures with underlying growth struggling due to volatility. Various bank economists are expecting further hikes in the OCR by the RBNZ to contain inflation.

Westpac economists have predicted that the RBNZ will raise the OCR by 50 bps in the next 3 monetary policy meetings and are predicting a forecast OCR peak of 3.5% by the end of 2021.

Michael Gordon, Acting Chief Economist of Westpac NZ and his team, expect the RBNZ to raise the OCR by another 50 bps in the May review on top of a 50bps increase in April’s monetary policy meeting. They also expect a 50bps hike in July and August meetings and 2 further increases of 25bps each, taking the OCR to 3.5% by the end of the year.

ANZ expect the OCR to peak at 3.5% in early 2023 and ASB anticipates the OCR to peak at 3.25% at the same time. Kiwibank expects a 50% hike in the OCR in May and a peak of 3% in November.

Amid this background, let’s see how these 2 NZX stocks are doing.

Source: Copyright © 2021 Kalkine Media

Westpac Banking Corporation (NZX:WBCASX:WBC)

Westpac has a market cap of NZ$95.37 billion and has given a return of 26.6% YTD.

Westpac released its fourth and fifth independent reviewer reports on 17 May for the December 2021 and the March 2022 quarter. The reports summarised the progress of its integrated plan to enhance risk control.

ALSO READ: WBC: ANZ: How did 2 banking stocks perform in their half-year results?

WBC’s CORE program has 19 workstreams and 82 deliverables with 343 activities. Westpac has completed a year in the program and has submitted 194 activities with 157 being assessed.

Shares of Westpac gained 1.19% in trading on Tuesday to close at $27.24.

Australia and New Zealand Banking Group Limited (NZX:ANZASX:ANZ)

ANZ has a market cap of NZ$79.35 billion and has given a return of -4.8% YTD.

ALSO READ: WBC, ANZ, SPK, MEL- 4 NZX dividend-paying blue-chip stocks

ANZ registered an 18% rise on pcp in its statutory NPAT to $1096 million for H2 FY22. The Group’s robust results showed strength in the NZ housing market despite headwinds. ANZ paid a total of 142cps as dividend in FY21. ANZ will pay an interim dividend of 72cps on 1 July 2022. The dividend has attached imputation credits of 9cps.

WBC, ANZ, HGH: 3 banking stocks in news as RBNZ may avoid big rate hikes

Shares of ANZ gained 0.42% in trading on Tuesday to close at $28.4.

Bottom Line

The RBNZ plans to balance the risk of halting the economy against the danger of rising inflation expectations.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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