Shares in ANZ hit their highest level in a year yesterday, putting behind the ravages of COVID and the lockdowns after a solid December quarter trading update.
ANZ joined rivals Commonwealth, NAB and Westpac in justifying the big rally in their shares since early November with its update showing a sharp rise in unaudited cash earnings.
ANZ said its unaudited statutory profit after tax for the first quarter of the financial year was $1.6 billion, up from a quarterly average of $773 million the first half of last year.
The quarterly trading update was a first for ANZ since the Global Financial Crisis to keep the market informed during the uncertain environment brought on by the coronavirus pandemic.
That saw the shares touch a day’s high of $26.95, the highest they have been since the same week of February, 2020.
They closed Thursday at $26.55, up 2.8% on the day.
The confident ANZ update and share price rise was matched by Westpac with a rise of nearly 3% on the day, but NAB and CBA shares both dipped (by 0.3% and 0.8% respectively).
The big four have seen 20% plus rises in the value of their shares since late October-early November as investors realised they had been damaged by COVID.
The appearance of successful vaccines also helped switch investor focus to more traditional value stocks and the banks have rewarded that returned attention from the market with solid earnings update – the CBA for the half year to December and the ANZ, NAB and Westpac for their first quarters.
ANZ’s higher cash profit for the December quarter is another sign the big four banks have emerged from the COVID-driven pandemic sell-off in solid shape with little of the feared bad debt concerns.
But they still have to weather the downturn expected after JobKeeper and JobSeeker are ended in around six weeks (or reduced to a more targeted scheme).
Still all banks have seen a material drop in deferred loans -housing especially – and small business deferments have also fallen sharply as business activity improves from the hit administered by COVID-19.
CEO Shayne Elliott said the bank’s performance had been strong during volatile trading conditions, which “again highlights the benefits of disciplined execution of our strategy as well as maintaining a simpler and well-balanced portfolio of businesses”.
“We’re pleased to have achieved these results for shareholders while also helping customers in difficulty and providing the vital lending needed to support the economic recovery,” Mr Elliott said in the update.
Mr Elliott also said all its major business clients had performed well through the quarter, adding ANZ had expanded its market share of Australian and New Zealand home loans.
Meanwhile ME Bank has claimed that it is close to being sold to the underperforming Bank of Queensland (BoQ).
Fairfax media claim ME Bank’s big super fund shareholders were sent an email last week saying a deal with BoQ was on the table and close to being finalised.
The bank’s smaller fund shareholders have also been asked to sell their shares and forced to sign non-disclosure agreements.
Fairfax said the push to sell ME Bank has been brewing for years, as the lender had never paid its shareholders a dividend and failed to achieve the scale needed to compete with its commercial rivals.
