ANZ Banking Group (ANZ) SNAPSHOT
Profile: Australia and New Zealand Banking Group (ANZ) is a major banking and financial services company headquartered in Melbourne, VIC. It serves customers across 33 markets through approximately 39,000 full-time equivalent employees. ANZ is one of Australia’s four major banks and New Zealand’s largest bank. The company reported total assets of $981bn as at FY19. ANZ has around 8.7 million customers worldwide.
History: ANZ’s origins began in London with the Bank of Australasia established under Royal charter and the first office opening in Sydney in 1835. Merging with Union Bank in 1951, ANZ was formed.
Earnings composition: The Australia segment generated $3.2bn, or 49%, of FY19 cash earnings. Institutional reported c.$1.8bn (28%) of cash earnings. NZ reported cash earnings of c.$1.4bn (22%) for the year.
Most recent result – FY19: ANZ maintained its final dividend at 80 cents, bringing the full-year dividend to $1.60. However, the 2H19 dividend was only partially franked at 70%. ANZ’s FY19 cash profit from continuing operations was broadly in line with FY18 at $6.5bn. ANZ’s FY19 net interest margin was 1.76%, 11bps lower than 1.87% in FY18. The net interest margin is a bank income measure which is largely the difference in the interest banks receive for loans and the cost of its funds (such as interest on deposits) as a percentage of its loan book. ANZ’s lower margin reflects a 1% reduction in net interest income due to lower interest rates and increased competition. The impact of these headwinds was partially offset by 5% growth in average interest earning assets to $813bn. Other operating income (non-interest income) declined 3% to $4.7bn, primarily due to impacts from recent divestments and decreases in fee and commission income.
Company outlook: ANZ sees signs of improving housing momentum in 1H20, however it highlighted that customers were paying down loans faster in a low rate environment. It also noted that margins will be impacted by lower rates, competitive pressures and a higher portion of lower margin products. ANZ expects to complete the sale of its Onepath P&I and ADGs businesses to IOOF in Q1 CY20 for a consideration of $850m including the $25m already received for ADGs.
Important dates: The ex-dividend date is 11 November 2019 and payment date is 18 December 2019. AGM is 17 December 2019. 1H20 results are scheduled to be announced on 30 April 2020 and the 1H20 ex-dividend date is 11 May 2020.
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