Why these brokers love ANZ shares right now

This is the bank to buy according to a couple of leading brokers.

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ANZ Group Holdings Ltd (ASX: ANZ) shares could be a great option for investors right now.

That's the view of analysts at Bell Potter and Goldman Sachs, which have been saying very positive things about the bank.

ANZ shares given the thumbs-up

Bell Potter has named ANZ on its favoured picks list again this month. It has been pleased with the bank's performance in a difficult environment. Its analysts commented:

While we note there are challenges from continued mortgage competition and tight wholesale funding market, ANZ is exhibiting strong trends in lending growth and asset quality.

The broker also highlights that deposit repricing and its exposure to institutional banking leave it well-positioned to pay big dividends in the next couple of years. It adds:

Furthermore, with the RBA's tightening cycle, ANZ's margins are benefiting from deposits repricing and gains in replicating portfolio. We forecast fully franked dividend yields of ~7% through to at least FY25. ANZ remains our top pick in the sector, and we expect the lending momentum, particularly in institutional, to continue to differentiate versus its peers.

Bell Potter has a buy rating and a $27 price target on its shares.

Over at Goldman Sachs, its analysts have the bank on the broker's conviction list. Once again, this is partly due to its exposure to institutional banking. They commented:

We reiterate our Buy (on CL) on ANZ, given: i) we see further upside risk to ANZ Group returns from mix shifts in its Institutional division, ii) we still see current market competitive dynamics as a relative tailwind for Institutional NIMs, ii) our assessment of the profitability of this division concludes that these return improvements are largely sustainable.

Goldman has a buy rating and a $27.25 price target on ANZ's shares. It is also forecasting 6.3% fully franked dividend yields each year through to FY 2025.

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 positions in and has recommended Goldman Sachs Group. 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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