Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site.

Is The ANZ (ASX:ANZ) Share Price A Buy?

Is the Australia and New Zealand Banking Group (ASX:ANZ) share price a buy after falling 11.5% over the past year?

Is the Australia and New Zealand Banking Group (ASX: ANZ) share price a buy after falling 11.5% over the past year?

ANZ is a leading Australian and New Zealand banking institution, with a presence throughout the oceanic region. ANZ is one of the Big Four Aussie banks and derives much of its revenue from mortgages, personal loans and credit.

Is the ANZ share price a buy?

One of the most helpful things about the fall in the ANZ share price is that it has boosted the bank’s dividend yield. One of the main considerations about the ANZ share price is its very attractive 6.3% fully franked dividend yield. Assuming ANZ doesn’t cut its dividend payment in the future, this could be an attractive source of income.

ANZ has paid the same annual 160 cents per share dividend over the past three years, so management is likely to want to keep paying that dividend.

However, a key uncertainty for potential ANZ shareholders is the new rules and regulations the bank will have to follow. The banking regulator, APRA, is going to make banks raise billions in Tier II bonds to ensure they are ‘too big to fail’ and that money deposited by Australians is safe. Having to hold more capital could mean lower profits and less dividends.

Aside from the immediate Royal Commission costs of remediation and legal fees, ANZ may also face lower long term profit growth due to the additional lending checks it will need to undertake.

A major source of activity for ANZ loans comes from mortgage brokers, in FY18 around 55% of loans originated from a broker. There is a fear that the Hayne Royal Commission may directly or indirectly alter this part of the loan market.

That’s why I think ANZ decided to take the interesting decision to invest $40 million into online loan business Lendi, according to the Australian Financial Review’s Street Talk. The investment would make ANZ the second largest investor behind Macquarie Group Ltd (ASX: MQG).

Whatever happens in the Royal Commission, Lendi could be well placed to capitalise on any changes to the law. Since Lendi’s creation in 2013 it has settled close to $8 billion of loans.

Is it time to buy bank shares?

If Australia’s house prices keep falling then I’m not going to be interested in the banks because every negative month increases the risk of bad debts and lower profits. At this stage I’d rather go for shares with more reliable profits.

[ls_content_block id=”14945″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content