The biggest influence on the ANZ Group Holdings Ltd (ASX: ANZ) share price is usually how much profit it's making and is predicted to generate in the coming years.
While its future net profit is partially up to the ASX bank share to work on, it's heavily influenced by what other competitors do.
In Australia, there are a number of competitors such as Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Bank of Queensland Ltd (ASX: BOQ), Bendigo and Adelaide Bank Ltd (ASX: BEN), Macquarie Group Ltd (ASX: MQG), AMP Ltd (ASX: AMP), and plenty more.
New Zealand is another important profit generator for ANZ and the other ASX bank shares with a presence across the Tasman Sea. But the New Zealand market may be becoming increasingly competitive, and that's a worry for analysts from Macquarie.
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Is Kiwibank a problem for ANZ shares?
Kiwibank is a challenger bank owned by the New Zealand government.
According to Macquarie, since 2019, Kiwibank has grown its mortgage book by 52% (compared to New Zealand overall loan system growth of 36%). Kiwibank has recently been taking between 15% to 20% of new lending growth.
Feedback from mortgage brokers is positive about Kiwibank, according to Macquarie, with Kiwibank being "the one to watch".
Macquarie's analysts noted that the major ASX bank shares are focused on returns, but the continued growth of Kiwibank and its lower return on equity (ROE) suggests "downside risk to NZ returns".
Due to the relative size of their New Zealand earnings, Macquarie sees the greater risks to ANZ shares and NAB shares, with ANZ having the "most risk".
Macquarie notes there is a renewed focus on deposits in New Zealand, particularly 'at-call' savings. The broker said there had been some hope that the term deposit competition might reduce.
Price target
The broker currently has a price target of $27.50 on ANZ shares. A price target is where analysts think the share price will be in 12 months from the time of the investment call.
That implies the bank could see its share price fall by more than 5% from where it is today.
Macquarie is also estimating that in FY25, ANZ could generate $6.8 billion of cash net profit overall (implying an increase of 1.3%) and pay a dividend per share of $1.56 (representing a cut of 6%).
But that dividend implies a partially franked dividend yield of 5.3%, which is a fairly attractive yield.
