The ANZ Group Holdings Ltd (ASX: ANZ) share price dropped 2.5% to $28.48 shortly after the market open on Tuesday.
The weak start for ANZ shares came amid the S&P/ASX 200 Index (ASX: XJO) soaring by 0.97% to an intraday high of 8,314 points.
The broader market is ripping today on news of a US-China tariff deal.
The US has agreed to reduce its tariff on China from 145% to 30% for 90 days.
China has agreed to reduce the 125% retaliatory tariff imposed on the US to 10% for 90 days.
The agreement benefits Australia because China is our biggest trading partner, and the 145% tariff would have hurt it economically.
Any sort of economic downturn in China impacts us through lower demand for our biggest commodity, iron ore.
So, why is the ANZ share price down?
ANZ share price bucks the trend today
ANZ shares are down simply because today is ex-dividend day.
That means the ASX 200 bank share is now trading without the next dividend entitlement attached.
ANZ announced its 1H FY25 results and a dividend of 83 cents per share with 70% franking last week.
This is the same as last year's interim dividend.
ANZ will pay the dividend on 1 July.
Shareholders who would prefer to receive more shares instead of a cash payment have until 5pm AEST on Thursday to lodge their dividend reinvestment plan (DRP) elections.
The DRP share price will be based on the arithmetic average of the daily volume-weighted average price of all ANZ shares sold on the ASX and Cboe from 19 May to 30 May.
A recap on ANZ's 1H FY25 report
For the six months ended 31 March, ANZ reported a 5% increase in revenue to $10,995 million compared to 2H FY24.
That was the strongest half-year revenue on record.
The revenue included the first full half of earnings from the Suncorp Bank business, which ANZ acquired last July.
There was a 12% increase in cash profit to $3,568 million, and a 16% rise in statutory profit to $3,642 million.
Earnings per share (EPS) for 1H FY25 was 120.1 cents per share, up 13% on 2H FY24.
ANZ CEO, Shayne Elliott, said:
Our strong performance has again been driven by our continued momentum across each of our divisions, demonstrating the benefits of a stable, consistent strategy combined with sensible, targeted investment.
This highlights both the strength of our franchise and the step change in our earnings from the inclusion of the first full half of Suncorp Bank's earnings.
Should you buy ANZ shares?
Macquarie has a neutral rating on ANZ shares with a 12-month price target of $27.50.
The ANZ share price has recovered a little from its initial fall this morning. It is now trading at $28.68, down 1.83%.
This means Macquarie's forecast implies a potential 4% fall for the ANZ share price over the next year.
Macquarie said ANZ's record revenue was about 2% lower than it had expected due to weaker margins and volume.
The broker said:
ANZ trades at ~13x forward P/E, representing an 18-19% discount to NAB and WBC.
Despite trading at a substantial relative discount to peers, we expect the market to remain cautious about the outlook, and this result is unlikely to provide a catalyst for re-rating. Maintain Neutral.
