ANZ shares edge higher as analysts mixed on ANZ Q3 result
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More News: ANZ shares have opened 0.24% higher this morning at $29.94 after publishing its Q3 update.
Bank analysts noted the only new profit and loss item in ANZ's Pillar 3 credit and capital release was the 3Q24 credit impairment charge of $45 million.
E&P Capital's analyst Azib Khan said the figure was "significantly lower than our 2H24 forecast of $499 million and consensus of $287 million. We continue to believe ANZ’s collective provision (CP) to credit risk weighted assets (CRWA) coverage is light relative to its major bank peers".
E&P said ANZ’s CP/CRWA coverage of 121bps at June 2024 compares with Commonwealth Bank at 146bps, National Australia Bank at 151bps and Westpac at 134bps.
"Closing the gap with CBA on this front would require ANZ to bolster its CP by ~$800 million," Khan said.
Jefferies Matt Wilson looked through the update to reiterate a "buy" on ANZ saying while, against peer trends, impaired assets at ANZ declined quarter on quarter to $1.4 billion, the bank's valuation gap to peers was overdone with "the alleged bond market misconduct already well-discounted".
In its Pillar 3 release, ANZ said customer deposits grew 2% in the June quarter, net loans and advances 3% and risk weighted assets were flat.
Individual provisions for bad debts rose to $18 million from $6 million over the quarter while collective provisions (reflecting concerns around the overall environment) rose to $27 million from $11 million. Total collective provisions were barely changed at $4.05 billion.anz asx
ANZ reports steady Q3
The news: ANZ's third quarter statutory update on credit quality showed some growing stress in borrowers but very benign bad debt charges.
The numbers: In its Pillar 3 release, the bank said customer deposits grew 2% in the June quarter, net loans and advances 3% and risk weighted assets were flat.
While still low by historical standards, individual provisions for bad debts rose to $18 million from $6 million over the quarter while collective provisions (reflecting concerns around the overall environment) rose to $27 million from $11 million. Total collective provisions were barely changed at $4.05 billion.
No profit and loss or margin figures were released, as per ANZ’s practice.
The completion of ANZ’s acquisition of Suncorp Group’s bank saw a decrease of ~1.05 percentage points in the bank’s Common Equity Tier 1 ratio which is now ~12% compared with 13.5% at the March quarter.
Gross impaired assets ticked down again and now represent 0.19% of gross loans and assets however loans 90 days or more past due continue to rise in both Australian and New Zealand home loans.
ANZ delivered steady growth in its home loan portfolio with $320 billion of lending compared with $314 billion at the March quarter as it continues to buy back market share lost during a melt down in its lending business four years ago.
The context: The limited numbers provided painted a similar picture to results from Commonwealth Bank and trading updates from National Australia Bank and Westpac as far as a slight deterioration in credit quality.
The source: ANZ
