ANZ share price falls on Q1 update

ANZ had a decent quarter operationally but that hasn't been enough to stop its shares from falling today…

The ANZ Group Holdings Ltd (ASX: ANZ) share price has started the day in a subdued fashion.

At the time of writing, the banking giant's shares are down slightly to $25.70.

A woman looks questioning as she puts a coin into a piggy bank.

Image source: Getty Images

Why is the ANZ share price falling?

Investors have been selling down the ANZ share price today following broad weakness in the banking sector which appears to have overshadowed the release of the bank's first quarter update.

Although ANZ hasn't provided any earnings with its update, it has given the market an idea of how it is performing in FY 2023.

According to the release, during the three months ended 31 December, ANZ reported a $7 billion increase in Australian home net loans and advances (NLAs), an $11 billion lift in institutional NLAs, and broadly flat commercial and New Zealand NLAs.

Another positive was that all divisions reported increases in customer deposits, including increased flows into term deposits.

But an even bigger positive is that ANZ's credit quality has improved despite the cost of living crisis.

Gross impaired assets reduced 22% to $1.1 billion and 90+ days past due loans as a percentage of total portfolio balances have continued to reduce in aggregate. Levels also continue to remain extremely low relative to 2020 peaks.

ANZ's provisions were positive during the quarter, with the bank recording a $83 million total provision release. This reflects writebacks and recoveries exceeding new and increased individual provision charges.

All in all, this led to ANZ ending the period with a CET1 ratio of 12.2%.

Today's small decline won't be too disappointing for shareholders. The ANZ share price is still up almost 9% in 2023 despite today's softness.

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 Scott Phillips.

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