ANZ (ASX:ANZ) margins take a hit

Company News

by Lauren Evans

ANZ Bank (ASX:ANZ) saw a drop in group net interest margin of 8 basis points over the first quarter, or 5 basis points on an underlying basis.

The bank attributed the fall to "a lower exit rate at the full year" and "a continuation of the structural headwinds impacting the sector". Over the second quarter, ANZ expects these headwinds to moderate, specifically the result of rising interest rates in New Zealand and changes in deposit pricing.

The bank is considering upgrading the size of its previously announced $1.5 billion on-market buy-back with a common equity tier one ratio of 11.65 per cent. 

ANZ said they made solid progress in Australia to improve systems and processes for simple home loans with application times now in line with other major lenders. Revenue within ANZ’s markets business for the month of October was softer and will likely impact first half performance, according to the bank. 

Provisioning of $78 million was made against a bad borrower, however with $122 million released ANZ enjoyed a $44 million total provision release during the quarter.

About $140 million of “negative transitional impact” will dent operating income, spread over both the first and second halves of financial 2022, due to changes made to customer banking packages in Australian retail and commercial.

Shares ANZ Bank (ASX:ANZ) are trading 2.1 per cent lower at $26.51. 

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.