ANZ Group Holdings Ltd (ASX: ANZ) has delivered impressive returns for its shareholders over the past 12 months, significantly outperforming the S&P/ASX 200 Index (ASX: XJO). ANZ shares rose by 19% for the year ending June 30, 2024, compared to an index rise of around 8%.
This outperformance is notable, especially considering that ASX bank shares constitute a substantial part of the ASX 200's returns. The bank's financial year runs until September, meaning there's still more to come for ANZ in 2024.
Recent Performance and Earnings Recap
In May, ANZ reported its financial results for the six months ending March 31, 2024. The statutory net profit after tax (NPAT) fell by 4% to AU$3.4 billion compared to the second half of FY23, while cash NPAT declined by 1% to AU$3.55 billion.
Despite the decline in profits, the bank's total provision charge decreased by 38% to AU$70 million, with the individual provision charge dropping by 69% to AU$38 million. This indicates that arrears are performing better than some investors anticipated in the current high-interest-rate environment.
However, the net interest margin (NIM) slightly decreased from 1.65% in the second half of FY23 to 1.63% for the first half of FY24, excluding the impact of 'markets' activities. Further declines in the NIM could pose challenges for ANZ shares.
Cost Savings and Dividend Increase
ANZ achieved significant productivity cost savings across various areas, including technology services (AU$62 million), head office enablement (AU$59 million), customer service and distribution (AU$36 million), product management (AU$29 million), and banking services and transaction processing (AU$15 million).
The bank also announced a 2% increase in the total dividend per share to 83 cents, compared to the FY23 second-half payout, reflecting confidence in its financial health.
CEO's Positive Outlook
ANZ CEO Shayne Elliot highlighted several positives in the bank's performance during HY24. He attributed the strong results to peer-leading diversification and a disciplined focus on productivity and delivery. Elliot emphasized that preparations for integrating Suncorp Bank were well advanced, despite the longer-than-anticipated approval process. He expressed confidence in the benefits that would follow the integration.
Elliot also noted the growth of the bank's flagship digital offering, ANZ Plus, which had grown to almost 690,000 customers and nearly AU$14 billion in deposits by the end of April. He highlighted the introduction of joint accounts and consistently high net promoter scores, which attract an average of 35,000 customers each month, about half of whom are new to the bank.
Suncorp Acquisition Approval
ANZ's long-awaited acquisition of Suncorp Group Ltd's (ASX: SUN) banking operations recently received approval from Federal Treasurer Jim Chalmers. This approval removes one of the main obstacles to the acquisition's progress. A successful integration of Suncorp Bank could enhance ANZ's scale, improve its growth profile, and potentially lead to higher overall profits and larger dividends.
ANZ Share Price Snapshot
Since the beginning of 2024, the ANZ share price has increased by around 9%, compared to a 1% rise for the ASX 200. This performance highlights the bank's resilience and strategic progress, making it an attractive proposition for investors.
In summary, ANZ's strong performance, strategic acquisitions, and positive outlook position it well for continued growth and shareholder returns in the coming months.