ANZ Group Holdings Ltd (ASX: ANZ) shares have advanced nearly 13% this year to date and are currently swapping hands at $29.24 apiece on Friday.
Following the completion of its $4.9 billion takeover of Suncorp's banking arm, ANZ has gained market share in the mortgage lending market.
It has knocked National Australia Bank Ltd (ASX: NAB) off the mantlepiece for the country's third-largest mortgage lender.
The story has been very different on the charts, however, with NAB pulling away from ANZ shares since June, as seen in the chart below.
Let's take a closer look.
New market share – why does it matter for ANZ shares?
ANZ now holds the third position among Australia's largest mortgage lenders, having recently surpassed its rival NAB.
This achievement comes as growth in NAB's mortgage book has lagged the overall market, according to The Australian Financial Review. This brings NAB's market share to nearly 14.5%, its lowest since 2021.
In contrast, ANZ's acquisition of Suncorp's banking operations boosted its combined market share to 15.96%, the AFR reports.
The acquisition of Suncorp Bank could allow ANZ to scale its retail and commercial lending businesses. CEO Shayne Elliott said it will grow the bank's footprint in QLD, meaning ANZ will compete "more effectively across the Australian market."
But the question is, why does this all matter for ANZ shares in the first place? It boils back to company fundamentals.
ANZ's acquisition of Suncorp has captured market share from competitors, meaning it will likely book higher revenues going forward.
All else being equal, higher revenues translate to higher earnings, which in turn can translate to higher stock prices. Brokers are already onto this.
Goldman Sachs adjusted its earnings estimates for ANZ to reflect the acquisition, noting that the integration costs will be phased in over five years.
It increased its FY24 and FY25 earnings per share (EPS) estimates by around 1% and 5.8%, respectively, calling for $2.24 and $2.25 per share.
The broker reiterated its buy rating with a price target of $29.10 per share, citing ANZ's productivity benefits and "returns due to accretive mix shifts in the Institutional business towards higher ROE payments and cash management business".
NAB's headwinds
ASX banks reportedly lent $15 billion to Australian savers and investors during the four weeks of June, the strongest monthly number since 2022. Despite this, NAB's market share declined.
NAB CEO Andrew Irvine indicated that the bank is prioritising more profitable areas of the business. Per the AFR:
The returns [on mortgages] and some of the product lines are not where we would want them to be, and as good stewards of our shareholders' capital, we've pulled back from some of the less profitable areas.
The results don't show on the chart either. NAB shares are up more than 20% this year to date, whereas ANZ shares have advanced just over 10% at the time of writing.
Will we see a change from here?
Foolish takeaway
ANZ's strategic acquisition of Suncorp Bank and NAB's continued struggles highlight ongoing shifts in the Australian mortgage market.
As always, remember to conduct your own due diligence before making any investment decisions.
