Australian bank ANZ reports 6-month profit
Australian bank ANZ is planning a US$1.32bn share buyback. The main reason for this was the bank’s six-month results. The bank’s profit fell by 7% to around AU$3.6bn, lower than analysts had previously forecast.
CEO Shane Elliott highlighted the challenges facing ANZ. He said negative global and domestic factors made the bank’s business much more difficult. Among them:
– slow growth in the Australian and New Zealand economies;
– electoral uncertainty;
– geopolitical tensions;
– the introduction of new global market rules for the commercial and industrial sectors.
The ANZ’s share price fell by 2.3% following the release of the results. At the same time, the bank intends to follow its peers with a buyback strategy. National Australia Bank, for example, plans to buy back AU$1 billion worth of its securities. The bank’s half-year profit fell by 13%. Westpac Banking has also initiated an AU$1 billion buyback following a 16% drop in profits.
Business outlook
ANZ also completed the sale of its stake in Malaysia’s AmBank. This raised AU$668 billion for the financial institution.
The ANZ’s primary focus is its institutional division. This is the core business for the bank’s investment activities. It also generates about 43% of the company’s total revenue.
UBS analysts say ANZ is showing positive signs of development. These include the buyback and integration into Suncorp’s structure.
As far as the Australian market is concerned, almost all banks reported declining profits in 2023. This is due to increased competition in mortgage lending. Despite the difficult situation, Shane Elliot emphasises the stable position of the business. This is due to the diversity of the bank’s businesses and services.
Analysts see the acquisition of Suncorp as one of ANZ’s biggest recent successes. The deal took some time to close, but the conditions were right for the company. The bank has also shown its determination in Asia by significantly expanding its market presence. This is particularly true in India, where ANZ continues to perform well.
According to Citigroup analysts, the Australian bank has posted good results. However, the general market situation and the risk of rising investment costs must be taken into account. ANZ may change its policy soon. The bank will focus more on the retail sector, which could stabilise costs.
