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Australian Investment Blog

ASX:ANZ 30/10/2020

ANZ First bank off the rank, misses full year

ANZ Bank (ANZ) -2.4% The first bank to release FY20 results today and it was okay. Cash profit of $3,758m and EPS of 132.7cps were down 42% on FY19, however pretty much in line with market expectations. The final dividend is 35cps which comes on top of the 25cps in the 1H taking the full year distribution to 60cps, a shade weaker than the 63cps expected but nothing material. Capital was strong and net interest margins were 1.63% vs prior period 1.76% which is a concern. H1 net interest margin was 1.69%, H2 margin was 1.59%. This is the reason we favour ANZ least among the majors as it has a large institutional business where it has no pricing power hence the margin contraction. Interestingly, they said that loan deferrals were down from 95,000 to 40,000. All in all, an okay result however we prefer ANZ least amongst the big four banks predominantly due to the lack of pricing power and the business mix, both of which showed up in the result this morning. MM’s preference 1. CBA, 2, NAB, 3, WBC, 4 ANZ ANZ Bank (ANZ) Chart ANZ Daily Chart

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