ANZ Holds Payout On Flat Result

By Glenn Dyer | More Articles by Glenn Dyer

The ANZ bank is maintaining final dividend at 80 cents a share after a weak full-year profit.

The bank Thursday morning revealed a Statutory Profit after tax for the year to September 30 of $5.95 billion, down 7% from 2017-18.

Cash Profit for continuing operations was $6.47 billion, flat with the prior comparable period.

ANZ said its Common Equity Tier Capital Ratio was stable at 11.4% and around $3.5 billion above the Australian Prudential Regulation Authority’s (APRA) ‘unquestionably strong’ measure.

Return on Equity eased by 10 basis points to 10.9%.

The 80 cents a share final will be partially franked at 70%. That makes an unchanged $1.60 a share payout for the full year.

In a statement with the results, CEO Shayne Elliott said: “This has been a challenging year of slow economic growth, increased competition, regulatory change and global uncertainty.

“Despite the challenges, we maintained focus on improving customer experience, balance sheet strength and improving our culture and capability. In doing this, we significantly reduced the cost and risk of operating the bank even though strong headwinds impacted the sector. Investment was at record levels and we are a far stronger bank as a result of the progress made this year.

“Retail & Commercial in Australia had a difficult year. Along with increased remediation charges, intense competition and record low interest rates have had a significant impact on earnings. While yet to flow through to the balance sheet, management actions and operational improvements have seen a steady recovery in home loan applications in recent months. This momentum is expected to be maintained into 2020.

Looking to the future, Mr. Elliott said: “The Australian housing market is slowly recovering, however we expect challenging trading conditions to continue for the foreseeable future.

“We expect the operational improvements made to our Australian home loans business to help restore market share in our targeted segments. Record low interest rates and intense competition will continue to impact profitability.

“Geopolitical tensions will also place pressure on earnings given our exposure to global trade, although this can be managed through the diversification of our business. Increased compliance and remediation costs will also need to be closely managed over the foreseeable future.

“Capital efficiency will remain a focus, particularly as we manage the proposed changes impacting our business in New Zealand. While these changes are not final, we are starting from a strong capital position with solid organic generation capability.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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