Hunting for passive income? Here's everything you need to know about the boosted ANZ dividend

ANZ just reported its half-year results and increased its interim dividend.

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The interim Australia and New Zealand Banking Group Ltd (ASX: ANZ) dividend was revealed this morning.

The S&P/ASX 200 Index (ASX: XJO) bank stock reported its half-year results for the six months ending 31 March before market open.

In good news for passive income investors, management opted to increase the ANZ dividend despite a dip in the company's half-year cash profits.

In early afternoon trade today, the ANZ share price is down 0.8% following the results, with shares trading for $28.53 apiece. That's trailing the 0.4% gains posted by the ASX 200 at this same time.

Here's what's happening on the passive income front.

The boosted ANZ dividend

With ongoing mortgage competition in the banking sector, ANZ saw its net interest margin (NIM) shrink by 0.02% over the six months to 1.63%.

That didn't help its cash profit, which dipped 1.0% year on year to $3.55 billion.

Still, management rewarded shareholders with an interim ANZ dividend of 83 cents per share, franked at 65%. That's up 2.5% from last year's interim dividend of 81 cents per share, though that one came with 100% franking credits.

And it came in ahead of the consensus estimates of 81 cents per share.

At the current ANZ share price of $28.53, this equates to an instant partly franked yield of 2.9% from the interim dividend alone.

If you're hoping to bank this passive income, you'll need to own shares at market close this Friday 10 May. ANZ shares trade ex-dividend on Monday 13 May.

You can then expect to see that payout land in your bank account on 1 July.

That is, unless you'd prefer to reinvest that cash and put it to work for you via the magic of compounding.

In that case, ANZ's Dividend Reinvestment Plan (DRP) is in effect for this payout. Management said the big four bank intends to provide shares under the DRP through an on-market purchase.

If we add in the final dividend of 94 cents per share, paid on 22 December, ANZ shares trade on a partially franked yield (partly trailing, partly pending) of 6.2%.

What did management say?

Commenting on the bank's performance and the ANZ dividend, CEO Shayne Elliot said:

We've driven a lot of productivity gains, and we take those gains by getting more efficient and some of those go back to our shareholders in the form of dividends and others, a lot of it, gets reinvested into the business and that's really what we're able to do again this year.

Atop the boosted interim dividend, ANZ announced plans to buy back up to $2 billion of shares on-market as part of its capital management plan.

Motley Fool contributor Bernd Struben 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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