The ANZ Group Holdings Ltd (ASX: ANZ) share price has declined after announcing a painful update for its upcoming FY25 second half report.
Profit hit to FY25 result
ANZ announced that it’s going to be impacted by several significant items with a net after tax charge of $1.11 billion.
The bank also noted that it has finalised the acquisition accounting-related adjustments for the acquisition of Suncorp Bank with an increase to goodwill of $141 million.
Let’s take a look at the various significant items the bank expects to report in its upcoming result.
Impacts to ANZ’s profit
The bank is going to recognise a pre-tax charge of $285 million on PT Bank Pan Indonesia, with an impairment of ANZ’s equity-accounted investment.
Next, ANZ noted the cost of staff redundancies. It has announced changes to “simplify the bank, strengthen focus on its priorities and deliver for its customers” with a FY25 second half pre-tax charge of $585 million (and $414 million after-tax).
Third, the company has entered into a settlement with ASIC to resolve five matters within its Australia markets and Australia retail businesses that were the subject of separate regulatory investigations. ANZ is going to pay total penalties of $240 million, with another $31 million of various costs associated with the matter. This cost will be $264 million after-tax.
Regarding the Suncorp Bank migration, ANZ said it intends to bring forward the integration of the division by June 2027 to accelerate value creation for shareholders, benefit customers and reduce operational complexity. It has recognised a pre-tax charge of $97 million (and $68 million after tax).
Finally, the company is closing Cashrewards. This will result in a pre-tax and post-tax charge of $78 million.
Final thoughts on the ANZ share price
The ANZ share price has risen 28% this year, it’s not cheap last it was at the start of the year. I wouldn’t buy or sell shares based on today’s news, but I wouldn’t describe the bank as an attractive investment right now with its higher earnings multiple.
Instead, there are a lot of other ASX dividend shares I’d rather buy.
