The Australia and New Zealand Banking Group (ASX: ANZ) share price has gone up by around 10% since its low last month.
Investors may feel like the bank has seen off the worst price falls and could now be an attractive option.
Today, it was announced that ANZ was dropping its home variable rates by 0.34%, with its simplicity plus home loan now an astonishingly-low rate of 3.65%.
This seems like a brave move considering the current funding constraints affecting all banks. ANZ and other big banks like Westpac Banking Corp (ASX: WBC) & Commonwealth Bank of Australia (ASX: CBA) seem determined to capture market share.
This has been done at a time when most other smaller lenders have increased their rates.
ANZ and its peers have been under scrutiny with the Royal Commission. It has also sold off a number of its Asian bank investments. It's quite a different investment than it was a few years ago.
The bank is focusing more on its home markets of Australia and New Zealand, which may not turn out to be the best move with the way the housing market is continuing to drop as whole. Plus, Asia is on course for long-term growth.
Is ANZ a buy?
The move to decrease its mortgage rate could have a negative effect on the net interest margin (NIM) and therefore profitability. The grossed-up dividend yield of 7.9% is attractive but National Australia Bank Ltd. (ASX: NAB) has a better yield of 10%.
I can understand why retirees are attracted to ANZ, but I'd rather invest in most of the other ASX 200 shares than the big banks at this point in the cycle.
