Citi is surprised at the timing of the $1.5bn buyback announcement by ANZ Bank, given continuing covid uncertainty, regulatory relief by APRA and an expected rise in deferred loan balances.
The unusual timing suggests to the broker that the bank saw an advantage in moving now and beating the other major banks to the punch. The analyst now incorporates $1.5bn in the second half forecast, for a cumulative $9bn over 3 years.
Citi retains its Neutral rating and $29.50 target price.
Target price is $29.50.Current Price is $27.15. Difference: $2.35 – (brackets indicate current price is over target). If ANZ meets the Citi target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).