The ANZ Group Holdings Ltd (ASX: ANZ) share price is under the spotlight after the ASX bank announced its FY24 result.
ANZ FY24 result
ANZ has reported its result for the 12 months to 30 September 2024. Here are some of the main highlights excluding Suncorp Bank (following the acquisition), unless where mentioned:
- Revenue fell 2% to $20.55 billion
- Expenses rose 4% to $10.55 billion
- Cash profit fell 8% to $6.85 billion
- Statutory profit, including Suncorp Bank, dropped 8% to $6.54 billion
- Cash profit/earnings per share (EPS), including Suncorp Bank, declined 9.3% to $2.24
- Final dividend of $0.83 per share
- Annual dividend per share increased 2.5% to $1.66
ANZ said its banking net interest margin (NIM), a measure of a bank’s lending profitability, declined to 2.48% in FY24, down from 2.65% in FY23. However, it was 2.44% in FY22 and 2.38% in FY21, so there has been an improvement.
The ANZ CEO Shayne Elliott said that the competition sector has “continued to be intense”, particularly in home lending and deposits. Despite that competition and inflation impacting profits, ANZ was pleased with its revenue and cash profit performance.
Segment growth
In the Australian retail division, it saw home loan growth of 7%, with customer deposit growth of 7%.
Australian commercial experienced lending growth of 6% and deposit growth of 3%.
The institutional division experienced 5% growth of ‘operational growth’.
In New Zealand, the company experienced moderate growth, with both lending and deposits growing by 3%.
Credit quality
The bank disclosed that its total credit provision was a net charge of $406 million, though $244 million of that related to a $244 million one-off Suncorp Bank acquisition-related accounting adjustment.
ANZ said its overall credit quality has remained “sound”, with “modest deterioration” in some segments.
Management comments
Elliott said:
Looking ahead, we remain focused on delivering good customer outcomes, strengthening risk management and providing consistent financial returns to shareholders.
We will continue to simplify our business to focus on two key platforms, ANZ Plus and Transactive Global, helping us better serve our customers, manage costs and improve productivity. We will also continue to leverage generative AI to increase productivity and deliver better tools to support our people and customers.
We are expediting the work we have underway to improve our non-financial risk practices, and embed a strong understanding of non-financial risk across the bank. This, along with continuing to drive a strong speak-up culture, is a key focus of mine as CEO – as well as across the bank more broadly.
Final thoughts on the ANZ share price
ANZ’s loan book seems to be performing well, but the profit decline was not ideal. A rise in expenses and a decline of the NIM/lending margin is not a good combination.
Time will tell if ANZ’s profit is able to rise in the future and whether it can maintain/grow its market share and margins amid strong competition.
After a rise of more than 20% in 2024 so far, I wouldn’t call the ANZ share price great value. There are other ASX dividend shares I’d rather buy.
