What to expect from the ANZ (ASX:ANZ) Q1 update next month

ANZ’s Q1 update is coming soon…

| More on:
A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements

Image source: Getty Images

Next month the Australia and New Zealand Banking Group Limited (ASX: ANZ) share price will be in focus when it releases its first quarter update.

To get readers ready for the release, I’ve looked to see what a leading broker is expecting from the bank’s update.

What Is expected from ANZ during the first quarter?

According to a note out of Bell Potter, its analysts are expecting a first quarter cash profit of $1.59 billion. This will be down 12.2% from $1.81 billion in the prior corresponding period.

The broker commented: “We look at numbers on a continuing basis again following the renewed impact of COVID19 on community health and the economy. In terms of 1Q22, we estimate cash profit of around $1.59bn and cash EPS of around 56¢.”

“We were hoping for a quick end to support packages this time around but this was not to be given onset of the Omicron and other variants (and bearing in mind that support for home and business loans is still in excess of 90%). Nevertheless, we still expect the bank to revert back to credit impairment expenses in 1Q22 but not as much as before,” it added.

What else should you look out for?

Bell Potter expects ANZ to report a net interest margin (NIM) of 1.62% for the quarter, down from 1.64% in FY 2021. This reflects lower volumes in both Australia Retail and Commercial and Institutional.

Another metric investors might want to look out for is the bank’s costs. Largely due to one-offs in the fourth quarter, Bell Potter expects a decent reduction in the bank’s expenses. It explained: “We have opted for operating expenses of around $2.00bn in 1Q22, a fair drop from $2.28bn in 4Q21 of around 12% but mainly due to the removal of large/notable items.”

Finally, the broker is forecasting a CET1 ratio of 11.8%, which is notably higher than APRA’s unquestionably strong benchmark of 10.5%.

Is the ANZ share price in the buy zone?

The broker sees a lot of value in the ANZ share price at the current level and has retained its buy rating and lifted its price target to $31.00.

Based on the current ANZ share price of $26.62, this implies potential upside of 16% over the next 12 months.

And with Bell Potter forecasting a $1.44 per share fully franked dividend in FY 2022, the total return stretches to over 21%.

Should you invest $1,000 in ANZ right now?

Before you consider ANZ, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and ANZ wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

A man raises his reading glasses in a look of surprise.
Bank Shares

Could Bank of Queensland shares deliver 46% upside AND a 4.5% dividend yield in 2022?

One broker is predicting a bright future for this bank stock.

Read more »

a man with a wry smile is behind ascending piles of coins as he places another coin on top of the tallest stack.
Share Market News

Can ASX 200 banks really see a 15% profit jump if the cash rate hits 1%?

These analysts are predicting big returns for banks in the rising interest rate environment.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

Why I think NAB shares could be the smartest big four ASX bank to buy

NAB looks like a solid bank to own in my opinion.

Read more »

A woman sits at her computer in deep contemplation with her hand to her chin and seriously considering information she is receiving from the screen of her laptop regarding the Xero share price
Bank Shares

Can the Macquarie share price reach $200 again in 2022?

Macquarie shares have had a tough run so far this year.

Read more »

A mle runner is in an awkward pose as the approaches an unever part of a running track through a forest with tall trees and sunlight shining through them.
Bank Shares

Latest Westpac review notes progress but flags ‘bank’s difficulty in staying the course’

The bank released independent reports on its risk governance progress.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

CBA share price higher on customer experience update

CBA is building new and innovative customer experiences...

Read more »

A middle-aged woman sits in contemplation over a tablet device considering information about ASX shares and deep in thought.
Bank Shares

Is the NAB share price cheap with its recent pullback?

Here's the verdict according to analysts.

Read more »

An ASX shares broker analysing a chart tracking the A2 Milk share price
Bank Shares

Here’s why the CBA share price could soon be in for some pain

Is it buy or sell for CBA shares today?

Read more »