In key news on Australian stocks, ANZ Group Holding Limited (AU:ANZ) reported a 7% drop in its cash profits to AU$3.55 billion compared to the same period last year. However, the profits remained largely in line with the estimate of AU$3.54 billion. Additionally, the bank announced an AU$2 billion buyback, highlighting its strong capital position and the benefits resulting from the partial sale of its stake in AmBank. ANZ shares remained stable at a slight gain of 0.070% on Tuesday.
ANZ ranks among the top four banks in Australia, with operations in around 30 markets.
Highlights from ANZ’s First-Half Results
In the first half, ANZ’s statutory profit decreased 4% year-over-year to AU$3.40 billion.
Among the bank’s divisions, Institutional business reported a 12% increase in its cash profit of AU$1.52 billion compared to AU$1.36 billion in the second half of 2023. This marked the division’s strongest first-half performance since FY17. The profit was mainly driven by heightened customer activity and favourable trading conditions. However, it should be noted that the cash profits of the Institutional business fell 4% on a year-over-year basis.
The New Zealand business also demonstrated growth, with its cash profit rising 3% year-over-year to AU$791 million. Within this business, lending increased by 1% while deposits grew by 2%, despite challenging economic conditions.
However, the primary setback to ANZ’s profits stemmed from the Australia Retail division, which experienced a 25% year-over-year decline in its cash profit to AU$794 million.
Along with its results, ANZ proposed an interim dividend of AU$0.83 per share, marking an increase of 2.5% compared to the first half of 2023.
UBS’ Reaction to ANZ’s Results
Following the results, UBS analyst John Storey confirmed a Hold rating on ANZ stock, predicting a modest upside of 4.5%. Storey remains bullish on the bank’s Institutional business, which contributed around 43% of the bank’s total cash profits. He stated that buybacks and the prospect of additional capital returns are additional positive factors.
What is the Price Target for ANZ?
According to TipRanks’ analyst consensus, ANZ stock has received a Hold rating based on four Buy, four Hold, and two Sell recommendations. The ANZ share price target is AU$28.53, which is almost similar to the current trading price.
