ANZ Share Price Up on Half Year Results Release

At time of writing, the share price of Australia and New Zealand Banking Group Limited [ASX:ANZ] is up 2.9%, trading at $27.99.

The ANZ share price has seen a strong recovery since the start of the year following the battering it received during the Banking Royal Commission:

ANZ Share Price

Source: tradingview.com

ANZ released its half year results this morning, which reveal that the company has taken a hit in its profit — an outcome that can be attributed to a slowing housing market.

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Housing market weighs on ANZ’s profits, but investors don’t seem to mind

In an indication that the results were better than expected, the ANZ share price rose quickly upon the commencement of trading today.

The cash profit is a measure that ignores one-off gains and losses. And the 2% increase came in ahead of analyst expectations.

ANZ CEO Shayne Elliott noted the impact of the housing market on revenue, but also highlighted the company’s recent efforts to reward shareholders:

Home loan demand in Australia has slowed significantly and this continued during the half. While our decision to step back from certain segments compounded this impact, being more risk averse in the current environment is prudent. However, we do accept we could have done a better job implementing our new risk settings and are taking steps to improve processes.

Continuing/;

The completion of our $3 billion buy-back resulted in a 3.7% reduction in shares, helping drive a strong increase in earnings per share. We also plan to neutralise the dividend reinvestment plan (DRP) for the fifth consecutive half and remain the only major Australian bank to have reduced shares on issue.

He however cautioned that, ‘The tough retail banking environment will be a reality for the foreseeable future.

What’s the outlook for the ANZ share price?

In a previous look at banking stocks, I warned that due to a variety of factors, the Big Four banks may need to shave their dividends.

While this has not come to pass for ANZ, as the company announced that the interim dividend would remain at 80 cents per share, it may not be the same for the other Big Four.

And eventually certain downside risks may take their toll.

The primary risk is a slowdown in the global economy and possible flow on effects to the Australian economy.

For now though, it appears that the global economy still has some juice left in it — something I discussed in relation to the Amazon share price and the US property market.

As a result, it is entirely possible that the ANZ share price will continue its general upwards trend through to the end of the year, albeit at more subdued pace than recently.

FYI, if you are interested in cycles and trends (which play a big role in the fate of blue chip stocks like ANZ), make sure to examine the publications listed at the end of this article.

The publications are presented by Phil Anderson, an expert on the grand-arc of markets.

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Regards,

Lachlann Tierney

For Money Morning

 


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With an MSc from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently, he has been working with Phil Anderson and Terence Duffy. They have three publications:

Phil Anderson’s Time Trader
Cycles, Trends & Forecasts
Money Morning Trader


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