ANZ share price reaches 2-month high as H1 profit beats forecast

ANZ H1 key figures

Australia’s number 3 lender posted a 2% rise in cash profit, beating analysts’ expectations. The rise in its first-half cash profit was helped by lower operating expenses and credit impairment charges.

Customer remediation charges came in at A$100 million, coming in less than the previous half.

The bank cited its outlook was due to slow expected credit growth, as well as costs associated with the Royal commission.

IG market analyst Kyle Rodda says since the Royal Commission, bank stocks have broadly appreciated, due to easing concerns of an industry overhaul.

ANZ share price

[ANZ shares:ZYAU-AU] rose as much as 3.5% to A$27.64, reaching their highest in two months.
ANZ shares saw were the biggest movers in the benchmark ASX 200 index on Wednesday.

How will ANZ compare to other banks set to report?

ANZ recognised customer remediation charges of A$100 million in the March 2019.

In a Reuters poll, Analysts said they were expecting the “Big Four” banks to show weaker revenue trends and rising costs, caused by billions of dollars in remediation for wronged customers.

ANZ was the first of the Big Four banks to report its half year earnings, with National Australia Bank is scheduled to go second, reporting on Thursday.

Shares of the other "Big Four" banks rose in a range of 1.2% to 2.9% on Wednesday, ahead of their earnings reports.

Mr. Rodda says the fall in Australian property prices has constrained bank shares for several years.

‘Since the peak in the market in early-2017, banks share prices have broadly trended with falls in Australian property – particularly that of the key Sydney and Melbourne markets.

Given this relationship, forecasts coming from ANZ, NAB and Westpac about the outlook for Australian property prices will be closely watched – especially as it relates to the banks’ top-line growth, as well as growth conditions in the broader economy.’