ANZ share price: what's the latest ahead of full-year results?

When will ANZ report their results?

The Australia and New Zealand Banking Group (ASX: ANZ) is set to release their 2019 full-year results to the market, next week, on October 31.

When will ANZ pay its next dividend?

ANZ is expected to pay its Final Dividend on December 18. The ex-dividend for ANZ's Final Dividend is set as November 12.

According to the ASX, ANZ’s current dividend yields stands at an enviable 5.74%. Though impressive at current levels, as we previously covered, Morgan Stanley expects that the blue-chip bank will cut its dividend in FY20.

Specifically, as we previously wrote, the investment bank ‘expects a 10% cut to ANZ's dividend in the 2020 fiscal year, which would bring the bank’s payout ratio closer to historical levels.’

Morgan Stanley also believes that ANZ will not initiate any share buy-backs in the near-term.

ANZ share price: latest developments

Though the finer details of ANZ’s FY19 results remain unknown, one of the most topical figures – remediation costs – was recently released to the market.

Indeed, as we previously noted, ANZ recently flagged total after tax remediation costs of A$559 million.

The majority of these costs – a cool after-tax figure of A$405 million – is 'largely related to product reviews in Australia Retail & Commercial for fee and interest calculation related matters,’ says ANZ.

These costs are set to be recognised in H2FY19.

Mind you, ANZ’s costs pale in comparison to the likes of NAB – which just recently flagged A$1.2 billion in customer remediation and software capitalisation costs.

Hayne’s image appears long-lasting indeed.

The new outlook

The future – as always – remains deeply uncertain. For banks specifically however: weak credit growth, historically low interest rates, intense competition and even more intense regulatory scrutiny has seen concerns over this uncertainty exacerbated.

This was essentially the view espoused during ANZ’s half-year results, at least.

Centrally, Shayne Elliott – ANZ’s esteemed Chief Executive Officer – commented that, ‘retail banking in Australia will remain under pressure for the foreseeable future with subdued credit growth, intense competition and increased compliance costs impacting earnings.’

Yet Shayne Elliott highlighted a further concern — noting that while ANZ’s New Zealand arm is ‘performing well’, is it beginning to exhibit ‘similar characteristics with the Australian market due to strong competition and a slowing Auckland housing market.’

Mr Elliott continued by stating ‘the major concern in New Zealand remains the impact of the proposed capital changes on the broader economy.’

For reference, the Reserve Bank of New Zealand (RBNZ) looks to be targeting a minimum CET1 ratio of 14.5% — a steep comparison to APRA’s ‘unquestionably strong’ CET1 requirement of 10.5% in Australia.

Indeed, besides Morgan Stanley flagging the potential of a moderate dividend cut in FY20, concerns over changes to New Zealand’s capital requirements also came into focus. Here and as we previously wrote, the investment bank also ‘suggested that ANZ may have to cede market share in New Zealand as a means of lowering its CET1 capital requirements.’

Morgan Stanley have an underweight rating and a A$26.00 per share price target on ANZ.

With all this considered, investors will likely be keen to see further commentary on ANZ’s plans as they relate to New Zealand operations when the bank releases its FY19 results next week.

How analysts will respond (positively or negatively) will be just as interesting. Indeed, in the last month alone the analyst consensus on ANZ has titled upwards, from a ‘hold’ one month ago, to ‘overweight’ this month, according to the Wall Street Journal.

On the analyst view as a whole, ANZ’s share price currently has four buy ratings, one overweight rating, seven hold ratings and one sell rating, according to the Wall Street Journal.

ANZ’s share price rose moderately today, touching A$27.92 per share before noon. Overall, the ANZ share price has been a modest performer YTD – rising 16% since January – though trailing the ASX 200 bench-mark.

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