Should you buy ANZ shares because of its strong home lending growth?

ANZ is outperforming its peers. Is this a sign to buy?

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ANZ Group Holdings Ltd (ASX: ANZ) shares are rising on Wednesday.

In early afternoon trade, the banking giant's shares are up 0.5% to $24.82.

This follows the release of some positive data that points to ANZ outperforming its peers in home lending.

Home lending leader

This week, APRA has released data for the banking sector which revealed some very interesting trends.

The first was Commonwealth Bank of Australia (ASX: CBA) posting its third month-on-month decline in its mortgage book. This is the first time this has happened in the 21 years that this data has been collected. Goldman Sachs notes:

This is the first time we have seen CBA's mortgage book shrink mom for three months in a row since monthly market share data was first available in 2002.

CBA's loss appears to be ANZ's gain, with the bank delivering three-month annualised growth of 2.3 times the industry average. As a comparison, CBA was -0.9x the industry average.

Another positive that could be boosting ANZ's shares is that it also leads on business deposit growth on a three-month annualised basis as well.

The big question is whether ANZ is achieving this by discounting, which could weigh on its margins. We won't have long to wait to find out if that is the case. ANZ will be releasing its full-year results on 13 November.

Should you buy ANZ shares?

Goldman Sachs currently has a buy rating and a $27.38 price target on ANZ's shares.

This implies a potential upside of 10.3% for investors over the next 12 months. In addition, the broker expects $1.62 per share fully franked dividends each year through to at least FY 2025, which represents a very attractive 6.5% dividend yield.

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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