Stock Review

ANZ Bank


  • Company: ANZ Bank (ANZ)
  • Recommendation: Avoid
  • Price at Review: $27.89
  • Current Price: $30.13
  • Fundamental risk: 2
  • Share price risk: 3

ANZ has announced its first quarter update for 31 December 2012 (ANZ has a 30 September year end), with cash profit increasing 6.2% to $1.53bn. The result can’t be judged without the detail released with the half-year results, but the company cited volume growth in Asia and good cost control for the result. The net interest margin remained flat, although it fell slightly if you exclude the more volatile results from the Global Markets division. This is consistent with Commonwealth Bank’s recent interim result where an improved global economic outlook helped stabilise financial markets.

Holding back some of the Reserve Bank’s interest rate cuts is helping offset the cost of attracting deposits and bad debts aren’t currently a problem, though the tailwind from lower bad debts and provision releases has largely drawn to a close. The share price has increased 10% since ANZ, Asia and accounting shenanigans 29 Oct 12 (Avoid – $25.25) and we’re sticking with AVOID.

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