Is the Australia and New Zealand Banking Group (ASX:ANZ) share price a buy?

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.

This top ASX share could be a much better choice than ANZ, it is growing strongly and would do even better if a recession were to happen.

Breaking news: ASX companies set to raise dividends!

It's been a nail-biter of a reporting season here in the first half of 2018.

But the real action, in my opinion, is what companies are doing with dividends.

What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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