Results from the ANZ Bank and Macquarie Group will dominate an otherwise quiet week for Australian corporate news apart from the continuing updates relating to COVID-19.
As well tech giants, Resmed and Atlassian release quarterly updates on Thursday, making that the most important day of the coming week for investors.
Thursday sees both banks release results – ANZ’s interim for the six months to March 31, Macquarie for the year to the same date.
The big issue for investors is the level of dividends both banks declare after the strong advice from the key regulator, APRA, in early April to be very cautious about dividends in the reporting period, as well as any other capital management ideas such as buybacks.
APRA actually wants the banks to run more generous dividend reinvestment plans to allow them to limit cash outflows and issue more scrip. Bank analysts and some big shareholders don’t want to see that, whining about the impact of dilution.
Their moans tell us these people do not care or want the banks to conserve cash for a while the economic and earnings and revenue impacts of the lockdown to fight the spread of COVID-19.
The ANZ paid out an 80 cents a share interim last year, 100% franked, the final was a 70% franked 80 cents a share.
The ANZ becomes the first of the big three March 31 balancing banks to report – the NAB and Westpac in the first 8 days of May.
The NAB ($1.1 billion) and Westpac ($1.43 billion) have already announced some costly house cleaning, but none provided an idea of the financial impact of the COVID-19 shutdown and possible impact on their loan books.
Analysts reckon ANZ will provide a house cleaning report of its own before Thursday’s results release. It has $A200 million of loans extended to failed Singapore-based oil trading group Hin Leong which has more than $A4 billion of debt.
Macquarie releases its full-year figures on Thursday – it wouldn’t surprise if the bank slips out a pre-release update to inform the market of any significant change. Macquarie had been looking for a result less than 2018-19’s $2.9 billion.
Like so many other companies, the results will not tell the story of the bank’s current position, which the collapse in oil prices in April will have provided a rough start to 2020-21. Updates based on Aprils’ experience will be the most awaited part of the release on Thursday.
Macquarie has already paid an interim of $2.50 a share, up from $2.15 a year earlier. It paid a final for 2018-19 of $3.60. Will that be left unchanged or cut with an attractively priced DRP alongside?
As well as these banks, there are a couple of results of note from our two tech giants, Resmed and Atlassian which are due to release their quarterly figures on Thursday in the US.
Both have withstood the slide in sharemarkets this year – Resmed shares are up 4% and Atlassian shares remain more than 26% higher. The wider market as measured by the S&P 500 is down 12% year to date.
Corporate salary packager, Eclipx is also down to release its latest figures midweek.
