ANZ - ANZ Banking Group

[tinhat]

I wish I had held of buying.

 

[tinhat]

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.

With the ability to get full franking credits and it going ex div this week, I've rebalanced the SMSF portfolio and sold down some TLS, said good-bye to RCG (What a ride from 60c to 142c) and bought up ANZ and NAB today and yesterday. 9.8% grossed up dividend yield but with 3 div entitlements in the next 53 weeks. For years I have been saying I don't care about earnings growth at that rate of return and yet the banks keep on growing earnings albeit at lower ROE and higher payout ratios. I've made this decision on the basis that the dividends for the major banks are stable and will be maintained into the medium term.

 

[shouldaindex]

I think ANZ has good value for the short-term, purely guessing. It's not going to get much cheaper than 9 PE at any stage.

But the expectation is that earnings are going to weather some hits as they are always cyclical. If they can manage to keep that hit (whenever it comes, and it will sometime this decade) to say, -10% to flat EPS that'll be a very good outcome to then start the next cycle.

So my view is good for short-term at $25, but significant risk ahead in the next couple of years that you need to be out before (no matter how good the dividend, as we have seen what can happen with the -30% SP in 6 months)

 

[Wysiwyg]

Bit of a reaction to ANZ announcing big credit issues. An American market downturn now could accelerate the sell off and see a new low.

 

[ggkfc]

Bit of a reaction to ANZ announcing big credit issues. An American market downturn now could accelerate the sell off and see a new low.

Sitting at 23.93 atm

Still waiting for a bit more a dip around 22 before buying any

 

[ggkfc]

anz getting hammered today!

 

[Cashflows]

I'm sure this may sound naïve, but is the increase in provisions of $100 million write off worth the $6,000,000 in the fall of the share price? I mean sure there is the fear of future write downs, but is that a proportionate fall? or is it an emotional estimate of future risks?

ps I don't own anz, and I couldn't understand last year's craze for large - cap dividends as if there was no risk.

 

[ggkfc]

might be more under the surface

maybe somebody knows something more

 

[oldblue]

might be more under the surface

maybe somebody knows something more

Maybe - or maybe they're oversold - over-shorted, more likely. The $100m further provisioning announced last week amounts to less than 4cps!

 

[Klogg]

Maybe - or maybe they're oversold - over-shorted, more likely. The $100m further provisioning announced last week amounts to less than 4cps!

Or maybe it's the canary in the coal mine so to speak.

With NIM pressures now coming to play and additional capital requirements from APRA (A risk weighting of 25% instead of 16% for mortgages is not a small change), one would imagine loan growth would slow substantially and dividend payout ratios would drop.

 

[Toyota Lexcen]

the APRA attack on banks is just amazing,

correct me if I am wrong, at no point is it costing bank "XYZ pty ltd" one cent, so far it has cost shareholders and bank customers,

yet APRA will tell you they are acting to protect depositors, superannuation accounts etc

 

[Klogg]

the APRA attack on banks is just amazing,

correct me if I am wrong, at no point is it costing bank "XYZ pty ltd" one cent, so far it has cost shareholders and bank customers,

yet APRA will tell you they are acting to protect depositors, superannuation accounts etc

Well, actually it costs them because they need to attract more funds in the form of Tier 1 capital to ensure their capital ratios are met. This means higher costs for those funds (e.g. interest on deposits, interest on tier 1 notes, etc.)

Yes, the banks should pass this on to consumers and they are to a degree, but not all of it. This is partly why their Net Interest Margins have been under pressure, and are still falling. Of course, what costs the bank money will cost shareholders, so this makes sense.

As for APRA, they are acting to protect any form of deposits. If banks have any problems, it is the amount of tier 1 capital that matters. So by raising the required amount of capital, APRA is ensuring the bank can hand back someone's deposit even if credit impairments double.


IMO, the Basel IRB model is far too free/open. It effectively allows banks (before recent changes) to hold 10% Tier 1 capital against a loan that had a risk weighting of 15%. Multiplying that out, they are holding 1.5c for every dollar of mortgage that they're written. It's a scary thought, but I'm quite conservative when it comes to such matters.

 

[ggkfc]

but that be ok, property prices double every 7 years dont they!

 

[Toyota Lexcen]

Exactly.the end result of Apra's actions so far has been that shareholders and bank customers are paying for the protection

I think Mike Smith(anz) made the comment a while ago that shareholders have paid enough for the regulation, so hopefully next moves are up for bank customers if apra try's anymore regulatory actions

Doesn't APRa oversee the superannuation industry also?

 

[ggkfc]

its always the shareholders that pay for it..
just like capital raising dilution

 

[prawn_86]

Im a little confused. People in this thread are acting like the shareholders are separate to the bank.

The shareholders ARE the bank, so of course anything that has a negative effect on the bank will hit the share price. Its not like the shareholders are 'paying for it' they own the company and the company is paying for it

 

[AussieStockDawg]

Down 0.5% today at close to $23.15

5,3 EMA Stoch is sitting around 5 .... and on BB, price is edging toward lower 20d 2.5std.


keeping an eye open for an entry

 

[ggkfc]

Down 0.5% today at close to $23.15

5,3 EMA Stoch is sitting around 5 .... and on BB, price is edging toward lower 20d 2.5std.


keeping an eye open for an entry

just wait for a bit.. some poor housing market data!

 

[shouldaindex]

Have a look at any ANZ investor presentation from the past year, you can see ANZs bad debt ratio requires about a 100% increase (so double) just to return to historical averages.

So if the market is scared of 10%, they might be in for a shock when the next major even hits (before the end of this decade IMO)

 

[UMike]

ANZ is releasing an Investor Discussion Pack?????
Relating to the banks review of its retail and wealth business in Asia.