The ANZ Group Holdings Ltd (ASX: ANZ) dividend that investors are going to receive for the first half of FY23 has just been announced with the HY23 report. The ANZ share price dropped around 2% in early reaction but picked up afterwards, rising 0.5% at $23.58.
ANZ's half-year result is for the period ending 31 March 2023.
The ASX bank share saw profit growth as it benefited from the higher interest rate environment. ANZ reported that cash profit increased 12% to $3.8 billion.
ANZ dividend
ANZ reported that, compared to the second half of FY22, cash earnings per share (EPS) went up 7% to 127.6 cents. Statutory net profit after tax (NPAT) dropped by 1% to $3.55 billion.
This enabled the ANZ board to deliver an increase of the dividend by 9.5% to 81 cents.
The ex-dividend date for the dividend is 15 May 2023, so investors need to own shares before this date to be entitled to the dividend. The payment date is 3 July 2023.
ANZ said that its dividend payout ratio was 68.6%.
The board said that it considered the 81 cents per share payout "appropriate" for the current operating conditions.
The ASX bank share noted that its common equity tier 1 (CET1) ratio was 13.2% for the period, an increase of 89 basis points (0.89%) since September 2022. But, on a 'pro forma basis', including the proposed acquisition of the banking division of Suncorp Group Ltd (ASX: SUN) and adjusted for the surplus capital in the non-operating holding company, ANZ's capital ratio was 12.1%.
What's the outlook?
ANZ's boss Shayne Elliot made a number of comments about the outlook. Keep in mind that ANZ's earnings and trajectory could have a major influence on the ANZ dividend in future periods. Elliot said:
The next six months will be more difficult than the last. Competition in retail banking is as intense as it has ever been, both in Australia and New Zealand. We understand that sustained higher inflation and interest rates create further challenges for some households and businesses across the economy. While the number of ANZ customers in difficulty remains low, we stand ready to help in these potentially challenging times.
We enter the next half with a business structure that brings the benefits of geographic and product diversification. We have a robust capital position, credit loss provisions higher than any other time pre-COVID, a strong and diverse deposit base and a track-record of execution. We are seeing continued momentum and high employee engagement across all four divisions, each with a clear strategy and a funded roadmap for growth.
As the world is changing rapidly, ANZ is well placed to deploy our people and capital to help those facing challenges, but also support those looking for opportunities.
What is the ANZ dividend yield?
Based on the last two announced dividends of 81 cents per share and 74 cents per share, that's a total of $1.55 per share. That's a fully franked dividend yield of 6.75% and a 9.6% grossed-up dividend yield.
But, if the next ANZ dividend is increased with the result in six months then the dividend yield will be even bigger for the next 12 months.
