What’s Going on With the ANZ Share Price?

What’s Going on With the ANZ Share Price?

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What happened to the ANZ share price?

Go back to mid-July last year, and ANZ Banking Group [ASX:ANZ] was struggling to stay above $23. Since then, though, shareholders have been enjoying its steady rise. After releasing its quarterly update today — an impressive 31% increase in profit — ANZ shares are trading at $30.70. That’s a 35% jump in just over six months.

Why have ANZ shares exploded higher?

In April 2015, ANZ was trading at all-time highs. However, ANZ and the other banks were hit on two fronts. First, the need to raise capital to meet regulatory requirements by APRA. And second, an increase in bad debts and pressure on their margins.

As interest rates fall, the banks’ net interest margins — the difference between the rates a bank borrows and lends at — contract, putting pressure on their profits. But as the easing cycle appears to have come to an end, and bad debts have reduced, ANZ’s profit is on the rise.

What now for ANZ Banking Group?

While today’s result is impressive, attention now turns back to the economy. As the primary driver of banks’ profits, all eyes will be watching to see if the housing market can continue its run.

The other factors to watch are wages growth, and the unemployment rate. Without any meaningful growth in wages, it becomes harder for the housing market to maintain its momentum. In the meantime, though, ANZ shareholders will be enjoying their fully franked, 5.3% yield.

By Matt Hibbard

Matt Hibbard

Matt Hibbard

Editor at Total Income

Matt Hibbard is Money Morning’s income specialist. While most investors focus on making money in the short term, Matt takes a different view. He’s focussed on how you can invest today to grow wealthy in 10 or 15 years’ time. In Money Morning, Matt shares his insights on how you can make the financial markets PAY YOU an income that could greatly increase your wealth in later life…and let you focus on more important things than money.
Matt Hibbard is Money Morning’s income specialist.While most investors focus on making money in the short term, Matt takes a different view.

He’s focussed on how you can invest today to grow wealthy in 10 or 15 years’ time.

Matt researches income investments. You can find more of Matt’s work over at Total Income where he’s hunting down the next generation of companies that could pay you more each year than you initially invest.

Having worked both for himself and with global firms for almost three decades, Matt’s traded nearly every asset in existence.

But now he’s on a very different mission — generating income from the market over the long term. Not just years, but decades.

And getting companies to pay you a steady, stable income with minimal stress and the least risk possible.

Matt doesn’t believe you have the luxury of being a bull or a bear in the market right now.

Because you have to earn an income from it, regardless of whether stocks are going up or down.

In Money Morning, Matt shares his insights on how you can make the financial markets PAY YOU an income that could greatly increase your wealth in later life…and let you focus on more important things than money.

If you’re interested in more than just hot stocks or global finance talk that doesn’t actually help you with your own investing, check out Matt’s articles below.

You can also have his regular investment insights delivered direct to your inbox. Just take out a free subscription to Money Morning here.

And if you’d like to learn about the specific investments Matt is recommending, take a 30-day trial of his income investing service Total Income here.

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