Is the Australia and New Zealand Banking Group (ASX: ANZ) share price a buy?

ANZ is a leading Australian and New Zealand banking institution, with a presence throughout the oceanic region. ANZ is one of the Big Four Aussie banks and derives much of its revenue from mortgages, personal loans and credit.

Is The ANZ Share Price A Buy?

ANZ has released its ‘Pillar 3’ disclosure statement to the ASX for the quarter ending 30 June 2019 showing its credit quality and other aspects.

The big four bank reported that its total provision charge of $209 million for the June quarter, which was broadly flat compared to the first half quarterly average, while the individual provision increased $68 million to $258 million.

ANZ revealed that the total loss rate was 0.13%, which was the same rate as the first half of FY19. However, the residential mortgages that are more than 90 days overdue continues to rise. The total for the group is now up to 0.79%, up from 0.70% at March 2019.

In terms of the Common Equity Tier 1 (CET1) ratio, it rose by 30 basis points (0.30%) to 11.8% at June 2019. But on a pro-forma calculated basis including the announced divestments and recently announced capital changes the CET1 ratio was 11.5%.

Home loan volumes were lower in the June quarter, as ANZ warned it would be. Compared to the March 2019 quarter, owner occupier loans were down 0.2% and investor loans were down 1.8%. However, home loan applications improved in July 2019 after actions taken to clarify credit policy and reduce approval turnaround times.

Is ANZ A Buy?

I can’t see anything that can suddenly improve ANZ’s growth rate with how Australia’s economic growth is slowing and the housing market is going to be flat at best for a while.

The only reason I would want to buy ANZ shares is for the fully franked dividend yield of 6%, but it can be a risky game of putting capital at risk just for income. I’d rather find shares that can offer earnings growth and decent income, like the ones in the FREE report below.


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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.