ANZ Group Holdings Ltd (ASX: ANZ) shares will be on watch this morning after the big four bank released its full year results.
Let's see how the banking giant performed for the 12 months ended 30 September.
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ANZ shares on watch amid cash profit decline
- Revenue down 2% to $20.55 billion
- Expenses up 4% to $10.55 billion
- Cash profit down 9.3% to $6.73 billion
- Fully franked dividends up 2.5% to 166 cents per share
What happened during FY 2024?
For FY 2024, ANZ reported a statutory profit after tax of $6.535 billion, down 8% on the prior year.
It was a similar story for its cash profit which fell to $6.73 billion or $6.9 billion when excluding $196 million of Suncorp Bank one-off acquisition accounting adjustments.
Management advised that this reflects intense competition for mortgages. ANZ CEO Shayne Elliott said:
This strong performance again demonstrates the benefits of our simplification agenda combined with the targeted investments in our core banking businesses. Competition in the sector has continued to be intense, particularly in home lending and deposits.
Despite competition and inflation impacting profits, we reported our second strongest revenue performance ever and a full-year cash profit of $6.7 billion, helping deliver a total return of 27% for shareholders.
The ANZ board has declared a final dividend of 83 cents per share, which will be 70% franked. This brings its full year dividend to $1.66 per share, which is 2.5% higher year on year.
How does this compare to expectations?
Goldman Sachs was expecting ANZ to report a small year on year decline in operating revenue to $20,762 million.
From this, the broker was forecasting cash earnings of $6,892 million (down 7%) and total dividends of $1.66 per share.
'Pivotal year'
Elliott described FY 2024 as a pivotal year for the bank due to the major acquisition of Suncorp Bank. He also revealed that synergies could be coming quicker than expected, which could be good news for ANZ share today. Elliott said:
This was also a pivotal year for the Group given the successful acquisition of Suncorp Bank, which has contributed two months earnings to this result. Since first announcing the purchase in 2022, Suncorp Bank's solid customer acquisition along with growth in home loans and deposits have been particular highlights. The significant work done to prepare for migration of customers also means we are well placed to deliver synergies faster than originally expected.
Challenging outlook
ANZ's CEO acknowledges that the economic environment is challenging. However, he feels the bank is well-placed to navigate it. He adds:
In what is a challenging period for the global economy, we managed the bank prudently with sound levels of credit provisions, liquidity and funding. Our strong capital position and the successful sale of our AmBank stake enabled us to reduce our share count by 30 million through the buyback.
Higher interest rates are impacting customers and we saw an increase in those requiring hardship support. Our data shows customers, in general, are holding up better than expected. However we know that's not the case for everyone and our team stands ready to help those who are doing it tough with tailored.
ANZ shares are up 24% since this time last year.
