Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Monday, 25 May 2015

ANZ half year results

ANZ half year results

ANZ reported its half year results to March 2015 earlier in the month (where does that time go, eh?).

Operating income was up 7 per cent for the half to $10,230 million.

Statutory profit attributable to shareholders was up by 3 per cent to $3,506 million, while the preferred cash profit measure was up by 5 per cent to $3,676 million.

The reconciliation of 1H14 to 1H15 cash profit by division revealed solid growth in both Australia - where profits were up by 8 per cent - and New Zealand.


ANZ declared a fully franked dividend of 86 cents per share. 

We may well be entering a period of "slower growth", particularly for banks, yet reported return on equity (ROE) still came in at a tub-thumping 14.7 per cent.

Credit quality and provisioning

Provisions charges were down 3 per cent or $510 million for the half.

Overall asset quality was reported as having improved compared to the March 2014 half, with gross impaired assets down $912 million or a material 25 per cent to $2,708 million as at Q1 2015. 

Total credit impairment provisions were $4,028 million as at Q1 2015, with a reported decrease of $285 million (7 per cent) compared to the prior comparative period.

This reduction was driven primarily by individual provisions from an improvement in portfolio credit quality. 

The total credit impairment charge of $510 million decreased by $18 million or 3 per cent compared to the March 2014 half.

Slower growth environment

ANZ acknowledges a likely outlook of slower growth ahead, but expects low interest rates to support a benign credit quality environment, despite the possibility of external shocks.

With curbs on lending expected and increased capital requirements, ROE looks likely to slow, and we might expect to see the market pricing in lower growth rates in due course.

Indeed, this has already been happening in the sector to some extent.
 

The bank has a market cap of around $89 billion at these prices.