ANZ - ANZ Banking Group

[bigdog]

I hold ANZ shares and the final dividend is paid on the first workday in July each year.

I have changed accountants this year for the preparation of my SMSF accounts

My previous accountant included the ANZ dividend paid on July 1 2013 in my 2013 accounts.
Paid 01/07/2013
Record Date 15/05/2013
Sundry debtor accrued for the dividend amount

My accountant preparing my 2014 accounts has told me that the ANZ dividend paid on July 1 2014 should not be included in 2014 SMSF accounts!

I could not specific internet links for dividend paid in July with prior accounting year record date!

What is the correct treatment and can you please advise links

 

[Sharkman]

I hold ANZ shares and the final dividend is paid on the first workday in July each year.

I have changed accountants this year for the preparation of my SMSF accounts

My previous accountant included the ANZ dividend paid on July 1 2013 in my 2013 accounts.
Paid 01/07/2013
Record Date 15/05/2013
Sundry debtor accrued for the dividend amount

My accountant preparing my 2014 accounts has told me that the ANZ dividend paid on July 1 2014 should not be included in 2014 SMSF accounts!

I could not specific internet links for dividend paid in July with prior accounting year record date!

What is the correct treatment and can you please advise links

i don't know if it's the correct treatment or not, but FWIW - i regularly use dividend stripping tactics on ANZ thru my corporate trust and my accountants have put it as income in the following FY every time for the last few years - ATO has never complained.

 

[rimtas]

I was wondering almost half year what is going on with ANZ, until the most recent development. It was just kept going in threes, until finaly it sported a Running Triangle.

Wave E is still in progress but the most part of it is done it's course. Ideally it shoud bottom closer to 31 mark. What comes next will be a surprise to everyone, because I can't find anyone is seeing a Triangle, which means the pattern has high probability.

What is even more interesting, the same Triangular structures can be seen on WBC and BOQ, NAB doesn't has one but it is also in the late stages of a multimonth sideways correction and should find a bottom soon.
CBA has a wave structure that can be in line with the next move as well.

The only thing is a question what this Triangle is doing here, how it incorporates into the larger picture. And as banks have a heavy weight on All ords index, how these kind of events will impact the XAO structure. But I'll leave those to think about later, because a high probability setup is in the works and need to take a position before anyone realizes it would happen. It is very tradable and has a good and clear entry/stop/ target levels. I like those king o setups, especialy in a timeframe like this.

 

[kushi212]

Hi everyone,
Not even a single share of anz was traded today. It seems that trading was closed in in this share today.
Does anyone know the reason for this ??
I haven't heard of this before. Whole of the market was traded and only one stock not traded.

Thanks

 

[galumay]

Hi everyone,
Not even a single share of anz was traded today. It seems that trading was closed in in this share today.
Does anyone know the reason for this ??
I haven't heard of this before. Whole of the market was traded and only one stock not traded.

Thanks

If you check the announcements for ANZ on the ASX site you will see they have announced a capital raising and hence there is a suspension of trading. Entirely normal.

 

[boofhead]

Go to ASX and get the annoucements. An extract of it is 'ANZ today announced a fully underwritten institutional share placement to raise $2.5 billion. The
Placement will be followed by an offer to ANZ’s eligible Australian and New Zealand shareholders who
will have the opportunity to participate in a Share Purchase Plan (SPP) to raise around $500 million. The
SPP is not underwritten.'

 

[Toyota Lexcen]

wow, you reckon retail investors going to take up the offer? i wonder what price the institutional investors bought in for

is this good for shareholders in long term?

 

[UMike]

wow, you reckon retail investors going to take up the offer? i wonder what price the institutional investors bought in for

is this good for shareholders in long term?

Dunno but I'm really shyty about it.
Seems to have brought all the banks down.

I've taken it as an opportunity to top up on ANZ and WBC.

The institutional Investers have already taken 2.5 Bil so ANZ does not really need the Retail investors take it all up.
If I am right the SP should be around or just above the 30.95 (minus 2%) anyways.
This hit has alot of shock value priced in.

 

[Klogg]

Dunno but I'm really shyty about it.
Seems to have brought all the banks down.

I've taken it as an opportunity to top up on ANZ and WBC.

The institutional Investers have already taken 2.5 Bil so ANZ does not really need the Retail investors take it all up.
If I am right the SP should be around or just above the 30.95 (minus 2%) anyways.
This hit has alot of shock value priced in.

I'm not quite sure why this is shocking. APRA have been informing us about increased capital requirements for investor mortgages (i.e. increased risk weighting for those that have advanced BASEL accreditation) for months now. In fact, NAB raised capital for this reason as well, so I don't understand the surprise.

To fully understand profitability of the big four banks, take a look at the percentage of investor loans made (vs overall credit, and vs housing loans), risk weightings and new APRA requirements. On that basis, it's hard to imagine banks can increase profits just through writing mortgages, which has been their source of profitability to date.

 

[Ves]

I'm not quite sure why this is shocking. APRA have been informing us about increased capital requirements for investor mortgages (i.e. increased risk weighting for those that have advanced BASEL accreditation) for months now. In fact, NAB raised capital for this reason as well, so I don't understand the surprise.

Cash profit for the quarter was also below expectations for some analysts. Too much growth priced in, I suspect.

Most analysts were under the impression that ANZ wouldn't need to raise additional capital because they had flagged assets sales for this specific purpose. There were also comments amongst analysts that the DRP would have gone a long way towards making up any capital shortfall before 1 July 2016.

This pretty much confirms that the asset sales aren't chugged along as planned, surplus capital generation may be weaker than expected.... so they've had to dilute shareholders by about 3-3.5% instead.

Market was definitely aware of the APRA changes, but I suspect the way that they were raised is a surprise.

NAB raised most of the capital in May/June because it was required as part of the demerger of Greater Western (they needed to provide liquidity / emergency funding in case the **** hit the fan).

The next question, aside from which bank is next, is... if the economy keeps slowing down, will they need to raise even more capital?

 

[McLovin]

I'm not quite sure why this is shocking.

Neither am I. And watch out because there's a rumour that CBA might be looking to raise up to $10b. Why wouldn't they, we're in the midst of strong lending, equity is dirt cheap for Aussie banks and who knows what the future holds, although one could take a stab in the dark.

“I only buy in areas I think are undervalued, but will see price growth soon. After the value of my properties grows, I take out the equity to purchase more,” Mr Fleming said.

http://www.dailytelegraph.com.au/re...property-tycoons/story-fni0cly6-1227446517160

If a pizza boy wearing culottes can be a property whiz then we all can! What could possibly go wrong!?!

 

[Klogg]

Ah, I wasn't aware of the asset sales - I should read in more detail next time. Thanks

The next question, aside from which bank is next, is... if the economy keeps slowing down, will they need to raise even more capital?

The other question here for me, is if APRA are enforcing more on the banks that we're not aware of. They seem to have a 10% residential investor loan growth cap as 'guidance'; however, given the reaction of banks to reduce residential investor loans, I get the impression APRA are really laying down the law behind the scenes.

I wonder what else they may force on the banks.

 

[skyQuake]

Neither am I. And watch out because there's a rumour that CBA might be looking to raise up to $10b. Why wouldn't they, we're in the midst of strong lending, equity is dirt cheap for Aussie banks and who knows what the future holds, although one could take a stab in the dark.


http://www.dailytelegraph.com.au/re...property-tycoons/story-fni0cly6-1227446517160

If a pizza boy wearing culottes can be a property whiz then we all can! What could possibly go wrong!?!

“I only buy sectors I think are undervalued, but will see price growth soon. After the value of my shares grows, I take out the equity to purchase more,”

This can only end well

------------------------------------------

Back to ANZ there is now real fear that CBA will raise $$$ and knock the market down another few percent

 

[tinhat]

I bought today for Mum's pension account at $30.44 . 8% gross yield sounds alright to me - even with a flat earnings outlook.

 

[Ves]

Another opinion is that the banks could have easy funded these capital requirements from the swathes of money they will pay out in dividends before July 2016.

Of course if dividends were cut temporarily, that'd be bad for the share price. And when your executive remuneration bonuses are linked to total shareholder return (TSR) that's also bad for the people making the decision.

What is bad for the share price in the short-term in this case is almost certain to be better than diluting existing shareholders in the long-term. Surely?

PS: compare how NAB did their raising to ANZ's method. I wonder which one was better for retail holders? Pretty obvious.

 

[tinhat]

Another opinion is that the banks could have easy funded these capital requirements from the swathes of money they will pay out in dividends before July 2016.

Of course if dividends were cut temporarily, that'd be bad for the share price. And when your executive remuneration bonuses are linked to total shareholder return (TSR) that's also bad for the people making the decision.

What is bad for the share price in the short-term in this case is almost certain to be better than diluting existing shareholders in the long-term. Surely?

PS: compare how NAB did their raising to ANZ's method. I wonder which one was better for retail holders? Pretty obvious.

I don't understand what the problem is. Everyone knew that a capital raising was likely. The $2.5b dilutes shareholders by 3% and the market reacts by dropping the price by 7% (on the basis of flat earnings outlook and increased provision for bad debts). Gross yield after dilution still >8%. A good day to buy in my opinion.

 

[Klogg]

Another opinion is that the banks could have easy funded these capital requirements from the swathes of money they will pay out in dividends before July 2016.

Of course if dividends were cut temporarily, that'd be bad for the share price. And when your executive remuneration bonuses are linked to total shareholder return (TSR) that's also bad for the people making the decision.

What is bad for the share price in the short-term in this case is almost certain to be better than diluting existing shareholders in the long-term. Surely?

PS: compare how NAB did their raising to ANZ's method. I wonder which one was better for retail holders? Pretty obvious.

I agree completely, and I think you've identified the problem - the measurement against TSR. Cut the dividend, and you'll have a huge amount of people exiting.

Bank shares are treated more like bonds than equities; the terms 'yield' and 'bank shares' are pretty much synonymous.

Gross yield after dilution still >8%. A good day to buy in my opinion.

Buying based solely on yield could be the problem. Buying a bank for 1.8*Book at what could be near the top of the short term debt cycle might not pan out well. But then again, I don't know enough about banks.

 

[notting]

Mike Smith pops up in the media as a bit of a rubber neck a little too much for my liking.

It troubles me most on the Asian investment front. If this guy's character is that thin, calling the new NAB ceo a rookie and denying ANZ needed a raising 3 months ago, then doing a pretty big one, 3.5 Billion is big, whilst he says it's small. It's not a good look. Poo Bear has lost the plot.

Probably is a buying opportunity but I'm not sure about this guy any more.

 

[tinhat]

Buying based solely on yield could be the problem. Buying a bank for 1.8*Book at what could be near the top of the short term debt cycle might not pan out well. But then again, I don't know enough about banks.

I don't know much about banks either, except that they seem to make a lot of money. Without reading into the figures, I worked out some averages of the performance of a couple of financial ratios going back to 1989, which is as far back as my data source goes. Using the end of financial year values:

Average Return on Equity: 20%
Average Price-Earnings Ratio: 12
Average Dividend Pay-out Ratio (DPS/EPS): 67%

Current ROE: 19%
Current PE: 12
Current Payout Ratio: 70%

ROE is likely to remain under pressure in the medium term.

Interestingly, yesterday's low placed the price smack onto the 38.2% Fibonacci retracement level of the run-up from August 2011 to April 2015. I will likely buy into any further fall in bank stocks.

As for Mike Smith, I would hope the board would move him on if they were not satisfied with his performance. It's just a job.

While ANZ may not have handled this capital raising to people's liking, I think part of the reaction is due to the current mood of the market. Market's correct. This was the catalyst.

 

[UMike]

I don't know much about banks either, except that they seem to make a lot of money. Without reading into the figures, I worked out some averages of the performance of a couple of financial ratios going back to 1989, which is as far back as my data source goes. Using the end of financial year values:

Average Return on Equity: 20%
Average Price-Earnings Ratio: 12
Average Dividend Pay-out Ratio (DPS/EPS): 67%

Current ROE: 19%
Current PE: 12
Current Payout Ratio: 70%
......

Just bought another fair bit on the 4% dip just under $27.

NOW
P/E Ratio 10.15
Dividend Yield 6.7%

Hold for 14mths get 3 divies. Or 8mths and 2 divies if the re-elected Turnbul Govt is inclined to bring down a tough budget.