ANZ results for FY22 suggest things are getting better

Nick Sundich, October 27, 2022

ANZ Bank (ASX:ANZ) has reported its FY22 results this morning and it has given its shareholders hope that things are getting better. The ANZ results included a 5% jump in cash profit, a 13 basis point jump in Net Interest Margin and a 4c per share higher dividend. And it is finally getting ANZ Plus on track.

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ANZ has trailed its peers

Despite a record housing boom during COVID and a rise in interest rates now, ANZ results have lagged its peers CBA (ASX:CBA) and NAB (ASX:NAB).

This is because ANZ has owned a far smaller market share in the retail banking and residential mortgage segments, thanks to cutthroat competition and lagging its peers in technology – taking far longer to approve loans than its peers – 2-4 weeks while other Big Four peers would approve a loan in 2 – 4 days.

ANZ results better than FY21

In FY22, ANZ’s results depicted that things just might be turning around. It recorded a statutory profit of $7.1bn (up 16%), a cash profit of $6.5bn (up 5%) and $2.28 in Earnings Per Share (up 6%). It paid a $1.46 per share dividend, yielding 5.6% and made a 10.4% Return on Equity (up 47 basis points).

ANZ claims it has restored momentum in home loans with a 6.9% jump in its loan book. Having finally launched its ANZ Plus app earlier this year, it claims it is delivering results at last. Funds Under Management went from nothing to over $1.2bn and customer acquisitions were almost evenly split across younger and older customers alike.

What lies ahead?

As with any company, ANZ results can give a hint as to what is lying ahead. It has promised further growth as it continues to roll out ANZ Plus and integrates Suncorp’s retail bank, after signing a deal to acquire it back in July.

Theoretically, FY23 should see even better results from ANZ as interest rates continue to rise. Consensus estimates for ANZ results suggest 4.8% EPS growth – to $2.40 a share. But investors should be wary of what will happen when its customers who locked in low-fixed rates, face paying higher interest once their fixed rate terms end.