Regardless of what some may say, Australia's banking system is held in the highest regard throughout the world as being one of the most profitable and secure. However, from an investing perspective they're not without their risks.
Growth
ANZ (ASX: ANZ) ticks all the boxes for investors and could easily fit into any portfolio. Contrary to Commonwealth Bank (ASX: CBA) and Westpac (ASX: WBC), which have spent the past five years battling over mortgages and buying up subsidiaries to do their bidding, ANZ has extended its overseas presence. Pushing into Asia with its 'Super Regional Strategy', the company hope to tackle the rising needs of the region's businesses and individuals. In 2007, the company drew 12% of earnings from its Asia, Pacific, European and American division and is on track to increase that to between 25%-30% by fiscal year 2017.
Income
Although its peers may offer slightly better dividend yields, ANZ is still a great stock for portfolio's and self-managed super funds (SMSFs). It pays a solid 5% fully franked yield that trumps interest accounts and term deposits. Morningstar predicts the dividends will increase 15% between now and the end of 2014. In addition, the earnings per share (EPS) will increase 13%.
Efficiency
As banks grow, their ability to generate new revenue and profit tightens. They must release new products, cut costs or expand the business model through acquisitions or overseas ventures. ANZ has consistency remained Australia's most efficient lender. In its most recent half-year report it improved on its ROE by a huge 15.5% as a result of a drive in earnings growth and a focus on capital efficiency.
Foolish takeaway
When buying blue chips, it is essential to purchase them at the right price. Unless you intend to hold them for a very long time, their modest growth trends will not be as appealing too short to medium term investors. However, out of the big banks ANZ has the most promising upside, comparable dividends and perhaps even more protection from a domestic slowdown in investment.
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Motley Fool contributor Owen Raszkiewicz owns shares in ANZ.
