On Wednesday the Australia and New Zealand Banking Group (ASX: ANZ) share price will be on watch when it releases its highly anticipated half year results.
Ahead of the release I thought I would take a quick look at what the market is expecting from the banking giant.
What is expected from ANZ?
According to a note out of Goldman Sachs, its analysts have forecast cash earnings from continued operations (pre one-offs) of $3,445 million. This will mean a decline of approximately 1.4% on the prior corresponding period.
The broker expects the bank to maintain its interim dividend at 80 cents per share, compared to the Bloomberg consensus of a slight increase to 81 cents per share.
Goldman suspects that the bank's soft housing momentum in the second half of FY 2018 will have continued during the first half and be tracking well below system growth levels. This is likely to have been caused by the bank "being overly conservative in its implementation of some policy and process changes on the lending front, which is driving the soft growth trends."
Partly because of this, the broker has pencilled in revenue of $9,439 million during the half, down 3.7% on the prior corresponding period.
But thanks to its cost cutting, the impact on its earnings is not expected to be as great. Goldman has forecast a 5.2% reduction in half year operating costs to $4,180 million.
Other metrics to watch out for are its net interest margin (NIM), cash earnings per share, return on equity, bad and doubtful debts to gross loans (BDD/GLA), and CET1 ratio.
Goldman expects a NIM of 1.84%, cash earnings per share of 120.9 cents, a return on equity of 11.4%, BDD/GLA of 12 basis points, and a CET1 ratio of 11.4%.
Should you invest?
Whilst I'm a big fan of ANZ and think it is the best bank share to buy ahead of National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC), I'm not a fan of buying shares before results.
In light of this, I would suggest investors wait for the release on Wednesday and if it meets expectations consider hitting the buy button.
